Buy-to-let borrowers face hike in payments

West Bromwich Building Society is hiking rates on some of its tracker loans, affecting 6,700 customers, in a change which will increase monthly repayments on a £200,000 loan by an estimated £330.

The move adds to costs for private landlords and has led to concerns that other lenders may follow suit after a similar move by the Bank of Ireland earlier this year.

Tracker mortgages are generally advertised as being linked to the Bank of England rate – but this has not changed for four years, remaining at an historic low of 0.5 per cent which the Bank has indicated will not change until 2016.

The West Bromwich said in a statement: “These changes, which are permitted under the terms and conditions of the accounts, are a reflection of market conditions and the need for us to carry out our business prudently, efficiently and competitively.”

Borrowing costs have risen despite the Bank of England’s low-interest pledge amid doubts about the timescale of the policy.