The Mortgage Works (UK) Plc · DRN-6145508

The complaint Mr and Mrs D complain that The Mortgage Works (UK) Plc (‘TMW’) caused confusion and delays during their application for a further advance. What happened Mr and Mrs D had an existing buy to let mortgage with TMW. They contacted TMW as they wanted to apply for a further advance to purchase another investment property. As their mortgage only had a short term remaining, TMW said they would first need to apply to extend it. The minimum outstanding term, in line with TMW’s policy, needed to be five years or more. So, Mr and Mrs D made a term extension application in September 2024. Following underwriting and a valuation of the property, TMW approved the term extension at the end of November 2024. During phone calls in December 2024, Mr and Mrs D enquired about the further advance they wanted to complete. They called TMW again at the start of January 2025 to make a further advance application. Mr D said he had spoken with TMW before Christmas and was told based on the property’s rental income that the maximum they could borrow would be £68,000. Mr and Mrs D increased the rent on the mortgaged property from January 2025 onwards to £1,000 per month. They wanted to borrow a further £100,000. After considering the application, TMW sent Mr and Mrs D a mortgage offer for additional borrowing of just under £100,000 on 31 January. Mr and Mrs D emailed TMW on 19 February and said they’d sent the funds release form on 6 February but hadn’t heard anything. The adviser sent a copy of the form to Mr and Mrs D and said if they completed it that they would get it sorted for them. TMW called Mr D a few days later and said it couldn’t release the funds as the bank details on the form were different to the direct debit account Mr and Mrs D paid the existing mortgage from. Another form was sent to Mr and Mrs D which they completed the same day. TMW released the further advance funds the next day on 26 February 2025. Mr D called TMW because he needed to return the further advance funds. The property purchase had, unfortunately, fallen through. The funds were returned and Mr and Mrs D went on to redeem their buy to let mortgage just over a month later. Mr and Mrs D complained. TMW accepted that there were some issues with incorrect and misleading information during the term extension process, which had caused some confusion. It offered to pay them £250 compensation to say sorry for this. TMW said there weren’t any delays in it processing the further advance. It said it was Mr and Mrs D’s decision to wait until January to apply for the further advance, once they had increased the rent on the mortgaged property. It didn’t agree that it caused the loss of the property purchase or that it should cover Mr and Mrs D’s solicitor’s fees, or any loss incurred due to the purchase falling through. Mr and Mrs D referred their complaint to the Financial Ombudsman Service. Our Investigator didn’t think TMW should refund the solicitor’s costs Mr and Mrs D had referred to. But she

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felt TMW should pay Mr and Mrs D a total of £400 to compensate them for the distress and inconvenience caused by delays with the term extension and incorrect and unclear information being provided. Neither party agreed. TMW maintained that its offer of £250 compensation was fair. Mr and Mrs D feel TMW should pay them losses of £10,000, plus solicitor costs and the £340 they paid for a valuation. They said they had missed out on the property purchase by 12 working days as the seller decided to sell to someone else. As a resolution couldn’t be reached the case has come to me for a decision. 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. It isn’t in dispute that there were some delays and incorrect or misleading information given by TMW during the term extension application. Having reviewed the available evidence, I agree with this. The extent of the impact caused by those issues is, however, in dispute. Mr and Mrs D feel these issues along with issues during the further advance application have led to them losing out on their property purchase. So, I’ve thought further about that. The purpose of Mr and Mrs D contacting TMW was to borrow additional funds on an existing buy to let mortgage so they could purchase another investment property. TMW explained to them from the outset that they’d be unable to do that until the term of their mortgage had been extended, because the term had less than five years remaining – the minimum term TMW will allow for a further advance is five years. TMW’s process is to consider a term extension application first and this needed to be agreed before considering an application for a further advance. I consider TMW made this clear to Mr and Mrs D during its conversations with them. There were, as above, some delays in the term extension process. But I’m not persuaded delays with the term extension application had any impact on the further advance. This is because Mr and Mrs D would not be able to borrow the amount they needed based on the rental income they were receiving on the mortgaged property prior to January 2025. They had a choice of either applying to borrow the estimated maximum amount of £68,000, or to increase the rent on the mortgaged property to support an application to borrow around £100,000. Mr and Mrs D chose the second option, to increase the rent, which they did from January 2025. And, once they’d done that, they started their further advance application. Mr and Mrs D argue that TMW told them they needed to increase the rent on their property or it couldn’t offer the amount they wanted. I have no reason to dispute that was the case, but this doesn’t change the fact that it was still Mr and Mrs D’s decision to do that and to wait until they’d done so before proceeding with their further advance application. The term extension application had completed in November 2024, over a month before they decided to proceed with a further advance – they couldn’t do that until they’d increased the rent on the property if they wanted to borrow the amount they needed. Rental income is something buy to let lenders will take into account in deciding whether, and how much, to lend, and that’s not unreasonable. I can’t, therefore, fairly conclude that delays with the term extension application had any impact on the time it took to complete the further advance. Even if it had completed sooner, it would not have impacted the point at which Mr and Mrs D could continue with the further advance based on the amount of borrowing they wanted. Looking at the further advance application itself, I’m not persuaded there were any avoidable

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delays during that process. I’m not persuaded TMW told Mr and Mrs D that a further advance application would take a maximum of four weeks, either. What TMW told them is that it can take three to four weeks to completion, on average. TMW is entitled to assess and underwrite an application for further borrowing, as any lender would, and I’m satisfied that’s the extent of what it did here. It took four weeks from Mr and Mrs D’s initial call with TMW on 3 January 2025 for TMW to make a mortgage offer. I don’t consider that is an unfair timescale in which to process a further advance application. Mr and Mrs D told TMW that they’d sent the funds release form on 6 February 2025. However, I haven’t seen anything that shows TMW received this. And I can’t fairly hold TMW liable for any issues with, for example, a third-party postal service. The form was resent on 19 February but as the account details were different to the direct debit account the existing mortgage was paid from, TMW wouldn’t release the funds. Mr and Mrs D completed another form with the correct details, and the funds were released on 26 February 2025. Like the Investigator, I do think TMW ought to have made it clear to Mr and Mrs D that they would either need to have the funds released to the direct debit account, or that they would need to change those details, before funds could be released. I think this is particularly the case considering the urgent nature of the transaction which TMW was aware of. Had TMW done that, I think it could have avoided some of the distress and inconvenience Mr and Mrs D experienced by having to resend the form. However, this would not, in my view, have made a difference to the property purchase falling through. Mr and Mrs D have said they missed out on purchasing the property by 12 working days, which would have been somewhere around 14 February 2025. TMW hadn’t received the funds release form by that point and so, it would not have been able to send the funds to Mr and Mrs D, regardless of which bank details they provided. There is also no guarantee that even if that had happened in enough time, that the property purchase would have completed. I appreciate Mr and Mrs D may argue otherwise, but it seems likely to me that the seller was already in the process of looking at other potential buyers before the further advance application completed. I think this is supported by the fact that it takes time to complete a sale, even the initial stages, and this had already happened – in line with Mr and Mrs D’s testimony – by the second week of February. They have also indicated on several occasions that the seller was losing patience in waiting for them. Mr and Mrs D are running a property rental business, and this proposed investment was part of that. It was their choice to commit to purchasing a property and to instruct solicitors before they had spoken with TMW. It was also Mr and Mrs D’s choice to raise funds by applying for a further advance with TMW, instead of other options – they had several months to change their mind if they felt the term extension and further advance was taking too long. TMW may have told Mr and Mrs D that they’d need to increase the rent on the mortgaged property to achieve the borrowing amount they needed. But it was Mr and Mrs D’s decision to go ahead with that which they knew would take more time, instead of taking other options – which they have suggested they could have done. It was not for TMW to tell them that other options might be quicker or more beneficial to them. I’m sorry that Mr and Mrs D missed out on what they considered to be a good investment opportunity. But in all the circumstances and for the reasons I’ve explained above, I don’t consider I can fairly uphold this part of the complaint. I’m not persuaded TMW caused any delays during the further advance application. Putting things right I’ve thought carefully about what’s happened and I agree with the Investigator that there are

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several occasions where TMW caused confusion, by providing incorrect or misleading information. It also caused some delays with the term extension application and ought to have, in my view, provided clearer and more helpful information about where funds could be released to. I think that, in all the circumstances, the collective mistakes and delays have caused considerable stress and worry to Mr and Mrs D. It took additional calls and effort from them to sort out, something which could have been avoided. And I consider the impact lasted over many weeks, if not months, during a time when Mr and Mrs D were urgently trying to complete a property purchase. I’ve considered our published guidance1 on awards for distress and inconvenience, and I consider a compensation payment of £400 to recognise the impact of what’s happened is fair in this case. I don’t consider it would be fair to require TMW to compensate Mr and Mrs D for the solicitor’s costs they incurred. It was their decision to instruct a solicitor and to begin incurring costs before they had the required funds in place to complete the purchase. At the point they instructed their solicitor, they hadn’t started an application with TMW. And, like the Investigator has said, it appears the costs were, in any case, relating to an earlier transaction in which another lender was involved. I find that I can’t fairly hold TMW responsible for Mr and Mrs D’s loss of investment opportunity either. Because I’m not persuaded, even without the mistakes TMW made, that this would have changed the overall course of events. My final decision My final decision is that TMW should pay Mr and Mrs D £400 compensation (this amount is inclusive of the £250 it has already offered) – if Mr and Mrs D accept my decision. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr D and Mrs D to accept or reject my decision before 2 April 2026. Keith Barnes Ombudsman 1 See: https://www.financial-ombudsman.org.uk/consumers/expect/compensation-for-distress-or- inconvenience

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