Not upheld: Mortgage administration / arrears handling complaint against Skipton Building Society

Decision detail

Summary

Mr and Mrs P complained that Skipton Building Society undervalued their BTL property when setting the LTV for mortgage renewal offers in 2023 and 2025, using HPI and AVM valuations that they believed were inaccurate. Mr P claimed the 2025 AVM valuation of £1,077,500 was essentially the same as the 2018 valuation despite seven years of market movement and property improvements, and that this cost them approximately £5,000 per year in higher interest rates. When Mr P complained and requested a physical valuation, Skipton arranged one at its own cost, which valued the property at £1,300,000, qualifying them for lower interest rates. The ombudsman found that Skipton acted fairly by using nationally available HPI data, clearly communicating valuations and their source, and offering customers the opportunity to request physical valuations, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman concluded that Skipton acted fairly by using nationally available HPI data to assess property value, as lenders are entitled to do. Skipton clearly communicated the valuations and their source to customers in both 2023 and 2025, and explicitly offered the opportunity to request physical valuations if dissatisfied. In 2025, when Mr P complained, Skipton went further by arranging and paying for a physical valuation, which resulted in a higher figure that Skipton then used. The ombudsman found no evidence that an AVM was used in 2023 (only HPI), so recent concerns about the AVM system do not call into question the 2023 valuation. The ombudsman determined that Skipton had no obligation to provide historical AVM inputs or alternative interest rate products for 2023.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website