Partially upheld: mortgage application decline; early repayment charge; failure to promptly consider alternative options complaint against Barclays Bank UK PLC

Decision detail

Summary

Mr C and Miss E applied to port their existing Barclays mortgage to purchase a new property but Barclays declined due to the property requiring a complete electrical rewire. They proposed three alternatives to avoid or reduce the £3,657 ERC, but Barclays took over a month to respond, by which time they had already purchased with another lender. The ombudsman upheld the complaint in part, finding Barclays' decision to decline was fair and the ERC was correctly charged, but Barclays should have responded more promptly to their proposals. Compensation of £300 was awarded for the distress and inconvenience caused by the delayed response.

The Ombudsman's reasoning

Barclays was entitled to decline the mortgage application based on its own risk appetite and lending criteria, and the ERC was correctly charged in accordance with the mortgage contract. However, Barclays failed to promptly consider and respond to Mr C and Miss E's alternative proposals, causing unnecessary distress during a time-sensitive property transaction. Even if Barclays had responded sooner, there was no guarantee the application would have been approved, as the property would have required revaluation and other factors could have prevented completion. The delay in responding was the only unfair aspect of Barclays' conduct.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website