Partially upheld: failure to properly action Consent to Let application; failure to explain mortgage rate options; failure to apply correct interest rate complaint against Santander UK Plc

Decision detail

Summary

Mr C complained that Santander failed to apply a new mortgage interest rate he believed he had secured in June 2023 for his rented property. Mr C claimed he was told Consent to Let had been granted but the residential rate was never applied, leaving him on the higher standard variable rate for approximately two years. Santander argued Mr C never completed the Consent to Let application and was ineligible for a residential rate while renting out the property. The ombudsman found Santander made a mistake by not properly actioning the Consent to Let process and failing to explain that Mr C would need to choose a Buy To Let rate. The ombudsman ordered Santander to retrospectively apply the BTL rate of 5.74% from 1 July 2023 to 2 October 2025 and refund the overpaid interest (£15,005.08 after deducting the £1,499 booking fee), while waiving the £295 Consent to Let fee if Mr C applies now.

The Ombudsman's reasoning

The ombudsman found that Santander made a mistake in 2023 by not properly actioning Mr C's Consent to Let application and not explaining that he would need to choose a Buy To Let rate instead of a residential rate. While call recordings were unavailable and notes were brief, the timing of calls and available evidence suggested Mr C was told on 30 June 2023 that Consent to Let had been granted, but this was not properly implemented. The ombudsman determined that if Santander had properly guided Mr C through the process, he would likely have chosen the BTL rate of 5.74% with a £1,499 fee, which would have been more advantageous than the SVR he subsequently paid. The ombudsman rejected Mr C's claim for a residential rate because he was never eligible for one once renting out the property. Santander's failure to contact Mr C at his new address (which it knew) rather than the property address contributed to the lack of clarity, but Mr C also bore some responsibility for not querying the significantly higher payments over two years.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website