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Close to home: mortgages and the Ombudsman

  • Contact: Katie Wise
  • Tel: 0207 520 5904
  • Created date: 17 December 2015

A guest blog by the Financial Ombudsman Service.

Wouldn’t it be great if we could buy our dream home without the aid of a mortgage? Of course, very few people are lucky enough to do this.

Taking out a mortgage will almost certainly be the biggest financial commitment we undertake. We borrow large sums of money over many years. And the first mortgage we take is unlikely to be the last. Most people want or need to move on from their first home for many different reasons. In an uncertain world, we never really know how or when we’ll need to change our mortgage. Will we always be able to afford the repayments? What if we lose our jobs or fall ill? And what happens when we want to move to a larger house and borrow more money?

For many, house prices just seem to be spiralling upwards. It means most people need to borrow more money over longer periods – sometimes beyond their planned retirement age.

Of all the money owed to house mortgage lenders in the UK, about 20% has been lent by building societies. The ombudsman sees relatively few complaints about them. Last year the service received over 12,200 new complaints about mortgages – an increase of 6% over the previous year. 9% of these were about building societies. And although we felt the societies had dealt with the complaints fairly in over 80% of the cases we saw, we also know many of them were about difficult, challenging and sometimes emotional circumstances.

Last month, we held a forum for complaints managers from building societies to talk about the challenges they face and share our insight, knowledge and approach from the disputes we’ve seen. We share a common goal that consumer complaints should be dealt with quickly and fairly to help people move on.

So, what did we discuss?

  • We talked about applications for new mortgages and lending decisions
  • We covered a variety of scenarios when existing borrowers wish to change their mortgage arrangements – perhaps to move house, borrow more, extend the term of their loan or find a new deal.
  • And together we explored many different circumstances where consumers experience difficulties in keeping up their mortgage repayments – something they may feel anxious and vulnerable about.

and what were the outcomes of the discussions?

Well, firstly, everyone recognised how important it is to notice when consumers are running into financial problems and offer to discuss their situations, as individuals. By listening carefully, thinking about what customers are saying and cooperating to identify sensible, pragmatic solutions – most problems can be overcome.

It was also recognised that whilst building societies and other mortgage lenders have various rules to follow, these generally allow flexibility so customers’ specific individual circumstances can be treated fairly and proportionately. And everyone took away the fact that good, clear communication is key. What this means will vary from consumer to consumer and recognising individual needs is crucial.
And, one final message to anyone who’s experiencing problems with their mortgage – talk about your concerns with your lender as early as possible.


If you’re a building society or other type of financial business and want to chat informally to the ombudsman service, you can contact our technical advice desk to talk about complaints you’re trying to resolve.

And if you have a mortgage or you’re a customer and have a problem, first talk to your lender to see if they can sort things out for you. If not, you can contact the ombudsman and we may be able to help.  

Posted by Katie Wise on 17 December 2015