Hundreds of thousands of homeowners will face higher mortgage rates after the vote to turn the Bradford & Bingley into a bank.

And they were the ones who voted in droves against the move by Irish carpetbagger Stephen Major, who successfully forced the conversion vote.

B&B chairman Lindsay Mackinlay said higher mortgage interest rates would be one of the results of the overwhelming call by 62 per cent of the 1.5 million members who voted to convert the building society into a plc, offering windfall payments and shares.

But chief executive Christopher Rodrigues said the rate changes would not be announced until firmer plans had been drawn up and the B&B's conversion document had been prepared - which could take more than a year.

Now the millions of pounds the B&B spends on keeping mortgage interest rates low and savers' interest rates high will be used to pay out windfalls of up to £1,500 and share dividends when the building society becomes a bank.

Clive Miers, of Shipley firm Miers Mortgage and Insurance, said: "This is a battle between the savers and the borrowers. The savers have voted for extra cash in their bank accounts and the mortgage-holders, the ones who are most loyal, have voted to keep the mutual status."

This view was echoed in the voting figures at yesterday's B&B annual meeting. Of the 1.5 million members who voted, 170,000 were borrowers and 60 per cent of them voted against. A total of 1.35 million savers voted and 62 per cent of them voted for the resolution.

But Mr Major also saw which way the voting lines had been drawn.

He said: "This is a victory for common sense. The only way that Bradford & Bingley members can benefit is through conversion. They will now be entitled to shares worth up to £1,500 and a twice yearly dividend income. Savers just did not benefit from mutuality."

The reaction from the packed annual meeting at the company headquarters in Crossflatts, near Bingley, was largely hostile to the news of the vote. There was a strong feeling of defiance at the meeting, and a sense that the 62 per cent vote in favour of conversion would not automatically mean the end of the Society's mutual status.

"The B&B is still determined to stay an independent organisation and is not encouraging banks to take us over," said Chris Holland, the firm's corporate communications manager.

Bradford South Labour MP Gerry Sutcliffe said: "We are now concerned about the effect to jobs in the area."

B&B member Geoffrey Drake, 79, of Baildon, was disappointed. "I wanted the B&B to remain mutual which is in the best interests of the society and its members."

But Paul Dolan, from Hawswick, near Grassington, said: "I am very much in favour of it becoming a plc because the windfall money and share dividends will help stimulate the economy."

Peter Whitwham, of Bingley, commented: "My fear is that if the B&B convert, the Nationwide will follow and then there will be a domino effect. There is still a place for a mutual society.''

T&A Opinion

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