Partially upheld: Mortgage administration / arrears handling complaint against The Mortgage Works (UK) Plc

Decision detail

Summary

Mr S applied to extend his Buy To Let mortgage term with TMW. After his first application was rejected due to damp issues, he completed repairs and reapplied in summer 2024. TMW requested a damp report but provided unclear instructions without specifying the type of report needed or which property areas should be covered. Mr S commissioned an unsuitable report from an architect which TMW rejected, requiring him to commission a second report from a damp specialist. This delay meant the term extension was not approved until January 2025, forcing Mr S onto a variable rate and preventing him from securing a better fixed rate available in October 2024. The ombudsman upheld the complaint, finding TMW responsible for the unclear instructions and ordering it to apply the October 2024 rate retrospectively and pay £250 compensation.

The Ombudsman's reasoning

While the first valuation and request for a new valuation were reasonable, TMW failed to provide clear instructions about the damp report requirements. TMW should have specified what type of report was needed, which areas of the property should be covered, and what expertise was required before asking Mr S to commission it. This failure caused Mr S to commission an unsuitable report from an architect, resulting in unnecessary costs and delays. Had clear instructions been provided, the term extension would have been approved in mid-October 2024, allowing Mr S to fix a mortgage rate at 4.94% rather than accepting 5.14% in January 2025.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website