Not upheld: Mortgage advice complaints complaint against Equifinance Limited

Decision detail

Summary

Mr and Mrs S complained that Equifinance irresponsibly lent them £25,000 on a second charge mortgage because the property valuation of £299,000 was inflated. They believed the property was worth approximately £250,000 in 2019 and provided evidence of comparable sales at lower prices. They also objected to Equifinance's refusal to provide a copy of the valuation. The ombudsman found the desktop valuation was reasonable given the property had been purchased for £300,000 only months earlier, and that lenders are entitled to rely on specialist valuations without requiring physical surveys. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman reasoned that mortgage lenders are not property experts and reasonably rely on valuations from specialist providers. A desktop valuation was an appropriate and reasonable choice given the property had been valued and purchased only months earlier for nearly the same amount. The 10% margin of error cited by Mr and Mrs S applies in both directions and does not mean the valuation should be assumed 10% higher. No valuation can guarantee accuracy as property value depends on what someone is willing to pay. Equifinance had no cause to question the valuation it received, and Mr and Mrs S did not raise concerns about overvaluation when they applied or through their broker.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website