Not upheld: lending decision / refusal of additional borrowing based on property valuation complaint against National Westminster Bank Public Limited Company (NatWest)

Decision detail

Summary

Mr B complained that NatWest refused to increase his mortgage borrowing after a valuation deemed his property unsuitable security due to proximity to commercial premises, despite two previous valuations having raised no such concerns. Mr B argued he had relied on the earlier valuations when purchasing and improving the property, and that NatWest's inconsistent treatment was unfair. The ombudsman upheld NatWest's decision, finding that the bank was entitled to rely on expert valuation advice, that Mr B should not have relied on valuations that explicitly warned against such reliance, and that NatWest's concern about saleability in a worst-case scenario was a reasonable lending consideration. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that NatWest was entitled to rely on expert valuation advice from a suitably qualified third party and was not responsible for the act of valuation itself. The ombudsman noted that the valuation reports from 2018 and 2020 contained clear warnings that Mr B should not rely on them for purchase value decisions and should seek his own independent report. The ombudsman accepted that NatWest's concern about saleability in a worst-case possession scenario was a reasonable lending consideration, and that the presence of adjacent commercial premises affecting demand was a legitimate basis for refusing additional lending. The ombudsman rejected the argument that inconsistency with previous valuations meant NatWest had done something wrong, as there may have been previous errors or market changes. NatWest's review of Mr B's objections, though not required, demonstrated reasonable consideration.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website