Not upheld: withdrawal of mortgage offer; failure to conduct physical valuation prior to offer; failure to notify borrower of valuation complaint against Barclays Bank PLC

Decision detail

Summary

Miss W applied for a mortgage via a broker to purchase a property with an age restriction. Barclays made a mortgage offer based on a desktop valuation without conducting a physical valuation due to the low loan-to-value ratio. When Miss W's solicitors later informed Barclays of the age restriction, Barclays commissioned a physical valuation which concluded the property was unsuitable security and withdrew the offer. Miss W subsequently sold her existing property and complained that Barclays should have discovered the age restriction earlier and should have notified her of the physical valuation. The ombudsman found that the broker, as an industry professional, was responsible for disclosing the age restriction in the application form but failed to do so, and that Barclays was entitled to withdraw the offer based on the new information. The complaint was not upheld, and Barclays' offer of £200 compensation was deemed appropriate.

The Ombudsman's reasoning

The ombudsman found that Barclays was entitled to withdraw the mortgage offer because new information about the age restriction came to light after the offer was made, which would have caused Barclays to reject the application had it been known beforehand. Although Barclays did not complete a physical valuation due to the low loan-to-value ratio, the ombudsman concluded this was a reasonable approach. The responsibility to disclose material information about the property lay with the mortgage broker as an industry professional, not with Barclays. The broker had the opportunity to disclose the age restriction in the application form's additional details section but failed to do so. Barclays was not required to inform Miss W directly about the physical valuation as it was appropriate to liaise through the broker and solicitors.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website