Not upheld: mortgage lending decision and alleged misleading statements regarding mortgage approval complaint against Bank of Scotland plc trading as Halifax

Decision detail

Summary

Mr and Mrs B complained that Halifax unfairly declined to port their mortgage to a new property (property B) and that they were misled into incurring costs including an early repayment charge of £3,000 and expenses for rent, travel, and removal. Halifax had initially issued a mortgage offer for a different property (property A) but Mr and Mrs B did not proceed with that purchase. When they found property B and proposed a rental arrangement with the vendor, the mortgage adviser indicated this might be acceptable but said she needed to check with compliance. Mr and Mrs B signed a tenancy agreement and moved in before receiving confirmation from Halifax. Halifax subsequently declined the application on 30 April 2025, stating the rental arrangement had unacceptable legal implications. The ombudsman found that Halifax did not mislead Mr and Mrs B that it would lend, as no mortgage offer was issued and Mr and Mrs B were aware of uncertainty when they made their decisions. The ombudsman concluded that Mr and Mrs B's costs resulted from their own choices rather than Halifax's error, and therefore did not uphold the complaint.

The Ombudsman's reasoning

The ombudsman found that while the mortgage adviser may have indicated the arrangement 'might be OK', she did not tell Mr and Mrs B before they signed the tenancy agreement that it would definitely be acceptable. The evidence, particularly Mrs B's 23 April message asking for reassurance, suggested Mr and Mrs B were aware of uncertainty. Critically, no mortgage offer was issued for property B, and there is no certainty a lender will lend until an offer is issued. Mr and Mrs B made the decision to sign the tenancy agreement and move in before receiving clear confirmation from Halifax. It was their choice to proceed with the vendor arrangement before securing mortgage approval. Halifax's subsequent decision to decline based on legal implications was within its discretion as a lender.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website