Barclays Bank UK PLC · DRN-6245653

The complaint Mr S complains that Barclays Bank UK PLC unreasonably delayed completion of a mortgage application he made. What happened Mr S had a mortgage with another lender. As he was coming to the end of his existing fixed interest rate, he decided to apply to move his mortgage to Barclays. Mr S’s property is a freehold property on a new build estate subject to rentcharges, and he bought the property with the assistance of the Help to Buy scheme, meaning he also has a shared equity mortgage secured over his property by way of a second charge. Mr S submitted his application to Barclays in June 2024 and it issued a mortgage offer. Also in June the solicitors wrote to Barclays to tell it that the property was subject to a rentcharge and asking whether Barclays was willing to proceed. Barclays responded asking for further information about ground rent. The solicitors responded in July saying again that it was a rentcharge. Barclays replied referring the solicitors to its policy on leasehold ground rent. There was then delay, it seems while Mr S and the solicitors were dealing with issues around getting consent and a deed of postponement in relation to the help to buy loan. The mortgage offer expired and Barclays issued a new offer in December 2024. In March 2025, when the other issues were resolved and things were ready for completion, the solicitors wrote to Barclays again. They pointed out that this was not a leasehold ground rent case, it was an estate rentcharge case, and again asked for Barclays’ instructions. On 20 March, Barclays wrote to the solicitors explaining it was unable to go ahead with the mortgage unless the developer would agree to amendments to the rentcharge to include a mortgage protection clause. Barclays said it had done nothing wrong. It said it was for the solicitors to explain the situation clearly and the solicitors had failed to correct its misunderstanding that this was a ground rent case. But it paid £400 compensation for poor customer service and for giving misleading information in its first complaint response. Our investigator thought that was a fair offer. Mr S didn’t agree and asked for his complaint to be reviewed by an ombudsman. I took a different view of the case, so I issued a provisional decision setting out my thoughts. My provisional decision I said: “I think this complaint should be upheld. I’m satisfied that Barclays did make a mistake here. The solicitors clearly told Barclays that this was a rentcharge case in June and July

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2024, and asked for Barclays’ instructions. I don’t agree that the solicitors failed to communicate this properly. Their letters are clear. It was Barclays that misunderstood things. Despite what the solicitors’ letters clearly said, it kept replying as if this was a leasehold ground rent case, when it clearly wasn’t. I’d expect Barclays to know the difference between leasehold and freehold, and between ground rent and rentcharge, and respond accordingly. Barclays did respond in March 2025, when the solicitors followed up after the other issues had been resolved. It then said it couldn’t go ahead with the lending. This was a reasonable decision. Estate rentcharges, especially where there is no mortgage protection clause, do present a risk to lenders and not all lenders will agree to lend in such cases. It wasn’t unreasonable for Barclays to decide it didn’t want to lend after all in the circumstances. But what was unreasonable was that Barclays only said that in March 2025. It had all the information it needed to have made that decision in June and July 2024. It could have told Mr S that it wouldn’t be able to lend at that point, and Mr S could then have gone elsewhere sooner. I don’t think Barclays is responsible for the whole period of the delay. There seem to have been other issues, related to the help to buy, preventing the re-mortgage going ahead between July 2024 and March 2025. That would likely have happened with a new lender too. But had Barclays made the position clear sooner, as it ought fairly to have done, Mr S could have looked for alternative lending sooner too. At the moment, I don’t have enough evidence to decide on appropriate redress. Mr S has told us that he ended up paying additional interest of £262 per month for ten months. But we don’t have any evidence of that loss. I would therefore like Mr S to provide evidence of loss in response to this provisional decision. I’ll consider what he says. I’ll then let the parties know my proposed redress and give them a chance for further comment before I make a final decision. At a minimum, I will need Mr S to provide his old mortgage offer (from the lender he was re-mortgaging from), as well as the mortgage offer for the mortgage he ended up taking and confirmation of the date his new mortgage ended up completing. He should also provide a mortgage statement covering the period he was on the old lender’s standard rate waiting for the new mortgage to complete. If there is any other financial loss, such as increased legal fees or duplicate help to buy fees, I will need evidence of that as well. Subject to that evidence, I’m minded to say that Barclays should refund the additional interest Mr S had to pay from 10 March 2025 (when things were ready to proceed apart from the rentcharge issue) until his new mortgage completed, based on the difference between the old lender’s variable rate and the new lender’s rate – on the basis that had Barclays made clear it wasn’t able to lend when it should have done, Mr S could have applied for an alternative mortgage sooner and been ready to complete in March 2025 when the help to buy issues were resolved. I’m currently minded to say that Barclays’ offer of £400 compensation for non- financial loss is fair. I say that based on the specific problems that Barclays caused. I realise this whole process was long-drawn out and stressful for Mr S, but I can’t fairly

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require Barclays to compensate him for anything it isn’t responsible for – such as the time taken to progress the help to buy application.” The responses to my provisional decision Barclays reiterated what it had said already, but didn’t provide any new evidence or information. Mr S said he was pleased I intended to uphold the complaint, but he didn’t think my proposed redress went far enough. He said: • Had Barclays communicated properly, he would have been in a position to decide what to do in June 2024. In particular, it ought to have told him that a deed of variation of the rentcharge would be required. Had he known that, he would likely have decided to stay with his existing lender – especially as he was planning to move house in a year or so anyway. That would not have required a deed of variation of the rentcharge, or a deed of postponement for his help to buy loan, at all. • A fair redress period would be interest charged between November 2024 and March 2025 – the period from when he reverted to his existing lender’s SVR to when it was made clear a deed of variation would be required. • £400 compensation didn’t fairly reflect the impact on him. An award in the band above would be fairer. Although Barclays isn’t responsible for the conduct of other parties, had it not made the initial mistake he would never have been in this situation at all. It had had a serious impact on his mental health and wellbeing, with knock-on effects in other areas, such as his performance at work and relationships with family, due to the stress and worry. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Having done so, I still think the complaint should be upheld. I took into account everything Barclays said in reaching my provisional decision and I haven’t changed my mind that it ought to have understood from the start that this was a rentcharge case which would impact its decision to lend. Putting things right I have thought carefully about the further points Mr S has made. But I also haven’t changed my mind about fair redress. He’s provided evidence of discussion with his broker, which shows he was considering several lenders including Barclays before making an application, but not at that stage considering staying with his existing lender. I agree that Barclays ought to have told his solicitors about its rentcharge policy in June 2024. But if it had done that, I’m not persuaded he would have stayed with his existing lender at that point, rather than applying to one of the other lenders discussed with his broker instead. I think it’s more likely that had Barclays made this clear from the outset he would have applied to another lender instead. Each lender has their own approach to rentcharges, so it doesn’t necessarily mean that another lender would have refused to lend as Barclays did. Equally, another lender might have taken the same view as Barclays. If another lender had then issued a mortgage offer, the other delays in arranging the help to

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buy would still have happened, and Mr S would still not have been in a position to complete until mid-March 2025. In the end, he did decide to stay with his existing lender. But his new interest rate only completed in mid-May 2025. By the time Barclays made the position clear, it was likely too late to re-apply to another lender and wait for their decision. That would likely mean the help to buy valuation would expire, requiring Mr S to obtain another one – with further costs and further time on the SVR. By this time, in practice Mr S lost the chance to move to another lender. But I don’t think remaining with his existing lender would have been his plan had he understood Barclays wouldn’t lend in June 2024. For that reason I don’t think it would be fair to require Barclays to reimburse the help to buy fees – because it’s most likely Mr S would still have incurred them as a necessary part of moving to another lender. I’ve also re-visited the compensation for distress and inconvenience. I still think £400 is fair compensation for learning in March 2025 that Barclays wouldn’t lend after all, and having to find an alternative option which was implemented in early May. No doubt this was very upsetting and stressful, but it was something Mr S was able to resolve within weeks. And I can’t hold Barclays responsible for the impact of other delays, for example with the help to buy loan. Mr S has provided evidence of his mortgage payments. It shows that he took a new tracker rate with his existing lender on 8 May 2025. Before then the interest rate at the SVR was 7.49%, and after that it reduced to 4.80% (Bank of England base rate plus 0.3%). Therefore, fair redress is the difference in interest at those two rates between 10 March and 7 May 2025 inclusive. That is what Barclays should refund. Mr S didn’t ask me to consider any other consequential financial loss, so I make no award beyond that. My final decision My final decision is that Barclays Bank UK PLC should pay Mr S the difference between interest on his mortgage at the lender’s SVR and at the tracker rate between 10 March 2025 and 7 May 2025 inclusive. It should add simple annual interest of 8% running from the payment dates of 28 March, 28 April and 28 May in respect of the interest for each of those periods, until the date of refund. Barclays may deduct income tax from the 8% interest element of my award, as required by HMRC, but should give Mr S a tax deduction certificate so he can reclaim the tax if he is entitled to do so. The above award is in addition to the £400 compensation Barclays has already paid. I don’t require it to increase the offer of £400 for distress and inconvenience. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr S to accept or reject my decision before 27 April 2026. Simon Pugh Ombudsman

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