Not upheld: Mortgage advice complaints complaint against HL Partnership Limited

Decision detail

Summary

Mr P and Miss S complained that HLP provided unsuitable mortgage advice in 2022 when recommending they remortgage and consolidate debt. They claimed losses of approximately £276,918, arguing the property was overvalued at £490,000 and they were now trapped with a high loan-to-value ratio preventing remortgage. HLP accepted the debt consolidation advice was unsuitable and offered £4,595.25 compensation plus £500 for distress. The ombudsman upheld HLP's offer, finding that the property valuation was conducted independently by the new lender's surveyor over which HLP had no influence, and that the net additional costs calculation of £4,595.25 was correct after accounting for interest savings on repaid debts.

The Ombudsman's reasoning

The ombudsman found that HLP did not value the property at £490,000; this was the new lender's independent valuation conducted by an unconnected surveyor over which HLP had no influence. The £390,000 HTB valuation actually worked in Mr P and Miss S's favour by reducing the HTB redemption figure. The ombudsman accepted HLP's calculation that costs of £24,773.25 were offset by savings of £20,138.00 in interest on repaid debts, resulting in net additional costs of £4,595.25. The ombudsman rejected the claim for £276,918 as it was based on keeping the mortgage for 40 years and failed to account for the savings made. The ombudsman noted that if Mr P and Miss S believe the lender's valuation was wrong, they should raise this with the lender, not HLP. The £500 distress and inconvenience payment was deemed fair and proportionate.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website