Barclays and Lloyds are facing a group legal action brought by hundreds of mortgage borrowers after the High Court granted an order allowing them to sue on a group, rather than an individual, basis.

More than 300 homeowners who took out shared appreciation mortgages in the late 1990s are now set to sue the two banks as part of a group litigation arguing that these products were unfair. Barclays and Bank of Scotland, which is now part of Lloyds, sold the mortgages.

The home loans allowed older borrowers to release cash from the equity in their property while deferring interest or loan payments until the property was sold. Borrowers would typically repay the bank up to 75% of any rise in the value of their home.

Financial Times