Barclays Bank UK PLC · DRN-6155169

The complaint Mr B complains that Barclays Bank UK PLC didn’t provide appropriate mortgage advice and didn’t accept a transfer of equity application. What happened Mr B had a joint mortgage with Barclays for a shared ownership property. In 2024, he took a new fixed interest rate until 2026. In 2025, Mr B wanted to remove the joint party from the mortgage. Barclays advised him to complete a transfer of equity (TOE) application and remortgage internally to a mortgage in his sole name. It advised him to port the existing interest rate product to avoid paying an Early Repayment Charge (ERC). As part of the remortgage application, a new valuation of the property was carried out. The property was valued at less than when the mortgage was originally taken out. Barclays wouldn’t accept Mr B’s application as it was. It said the Loan to Value (LTV) was now higher than its threshold for a shared ownership property. Mr B needed to make an additional payment to the mortgage to bring the LTV under the threshold for shared ownership properties. Barclays then offered Mr B the mortgage in his sole name. Mr B was unhappy that he wasn’t advised of the LTV threshold before his application. He thought declining the application on that basis was unfair when the interest rate product he was porting had a higher LTV threshold. The complaint was referred to our Service and our Investigator thought Barclays had acted reasonably. Mr B remained unhappy, and thought Barclays should have foreseen that the application would be declined because of the LTV and advised him of this before he incurred costs. The complaint has now been passed 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. Mr B has raised numerous FCA rules and principles that he believes Barclays has acted in breach of during the course of these events. My role here is to determine more broadly what I find fair and reasonable in all the circumstances of the case. In doing so, I’ve taken account of the relevant rules, guidance and best practice at the time, including Consumer Duty obligations which Mr B has referred to.

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The starting point is that Mr B thinks Barclays shouldn’t have treated this as new lending. Mr B has said there is no additional risk to Barclays as it already held the mortgage and there was no additional lending. So, he thinks there was no need for the changes to mean the mortgage had to undergo policy and affordability assessments. I understand why Mr B might think that on the face of it. But I don’t agree. The mortgage was a joint mortgage previously. Both parties were jointly and severally responsible for repaying the lending. The risk to Barclays is changed significantly when only Mr B would be responsible for repaying the mortgage going forward. Mr B is essentially taking out a new mortgage in his sole name, to repay the previous joint mortgage. Barclays has a duty to lend responsibly. So, it’s right that it ensures the sole mortgage is affordable to Mr B in his own right with up-to-date information, as well as ensuring it still meets its policy criteria to lend. So, I don’t consider Barclays acted unreasonably by assessing the application in this way. As part of the application, I’m satisfied it was reasonable for Barclays to undertake a new valuation of the property to ensure it was still suitable security and met its lending criteria. Barclays instructed suitably qualified surveyors to carry out a valuation of the property. It was fair and reasonable for Barclays to rely on the surveyor’s expert opinion on the value of the property. Unfortunately, the property was valued at less than the original purchase price as it was not supported by comparable sales in the area. Moving to Mr B’s concerns that Barclays didn’t accept his application due to the increased LTV. It’s important to set out that Barclays is entitled to set its own lending policies depending on its commercial decisions and appetite to risk. It’s not unreasonable for Barclays to set different LTV thresholds for shared ownership properties, given the different risk factors associated with a shared ownership property. Barclays has provided its policy for lending on shared ownership mortgages which includes a 90% LTV threshold. The same threshold exists for remortgages of a shared ownership property. So, I’m satisfied that Barclays has applied this policy consistently here given the updated valuation, and it hasn’t treated Mr B differently to any other applications of the same nature. I’d still expect Barclays to give consideration as to whether the policy needed to be applied in the individual circumstances of Mr B’s application. I can see Barclays referred the decision to its senior underwriters, and from the notes I’m satisfied it gave fair consideration as to whether an exception could be made. I don’t think it was unreasonable for Barclays to decide that its policy applied here, and the LTV needed to remain under 90%, as it was when the mortgage was originally taken out. I appreciate that Mr B thinks it is unfair for Barclays to apply the 90% LTV threshold for shared ownership mortgages, when the mortgage product he was porting had a 115% LTV threshold. And he said his LTV would have been higher than 90% when he fixed the product in 2024. Barclays will have different LTV thresholds for different products that it offers. That is reasonable and standard industry practice. Mr B took out an interest rate product available for residential mortgages with LTVs of over 85% and up to 115%. However, Mr B’s underlying mortgage is still for a shared ownership property, and the lending criteria LTV threshold for that remains 90%, regardless of what the individual product

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may allow, that does not mean the shared ownership LTV threshold is no longer applicable to Mr B. Mr B has provided an exert of the mortgage offer from the product switch in 2024, and I can understand why this has caused confusion. The offer says, “the maximum available loan amount relative to the value of the property is 115%”. It doesn’t explain that the underlying mortgage may have its own LTV criteria. I don’t consider this wording was clear, fair and not misleading. Barclays could have done more here to make this wording clearer. And again, when Mr B first raised his concerns, it could have done more to explain the differences between the product LTV range and the lending criteria specific to shared ownership mortgage LTV threshold. I don’t think this would have prevented the distress Mr B has been caused by this situation, or alleviated his cause for complaint, however. Ultimately, Mr B is unhappy he needed to reduce the LTV to take the lending. And this would still have been the case had Barclays provided a clearer explanation. So, while I agree that Barclays hasn’t been as clear as it should have been – I won’t be directing it to do anything differently here. I appreciate that it was recorded that the property value had decreased in the 2024 product switch application. This impacted the LTV, which went above 90%, and in turn impacted which interest rate products were available to Mr B. But I don’t think it would have been fair for Barclays to not continue with the lending because of this. Property values fluctuate, and while it is fair for Barclays to assess the LTV at initial lending or remortgaging, I don’t think it would be reasonable to constantly reevaluate this where there is no material change to the mortgage. I understand Mr B thinks that as Barclays was already lending above the 90% LTV it should continue to do so, but for the reasons explained I don’t agree. Furthermore, the product allowed an LTV of up to 115%, as I’ve already set out. Mr B says Barclays should have foreseen his application would be over the LTV threshold as a lower property value was recorded on his product switch application in 2024. He says as a result of Barclays not making him aware of this at the start, he incurred solicitors’ fees and took time off work for the valuation before finding out. I appreciate why Mr B says Barclays knew there was a reduction in value of the property given the 2024 application and discussions with the adviser. But as this was an indicative value and a valuation hadn’t yet been carried out, I don’t agree Barclays reasonably could have known the value of the property until a valuation by a qualified surveyor confirmed it. I don’t think it would have been fair for Barclays to make assumptions on the value and advise Mr B accordingly until a valuation was completed. Even if Barclays had made Mr B aware of LTV threshold before his application – I don’t think this would have changed things for Mr B. Given Mr B had a fixed rate until March 2026, and he was conscious of incurring an ERC, I think it is more likely than not that Mr B would have still proceeded with the sole application with Barclays rather than incurring an ERC to remortgage with another lender. I say this because within the recommendation given by Barclays it is noted Mr B’s preference was to port his current rate rather than incur fees. Given the choice of making an additional payment into the mortgage of around £1,500 or incurring a charge of around £550 to remortgage elsewhere, where he may have faced similar obstacles, on balance I think it’s more likely Mr B would still have reduced the mortgage balance. Regardless, solicitors’ costs and time taken for the valuation would have been required whichever way Mr B proceeded with a remortgage. So, I’m not persuaded that Mr B has

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been put in a worse position by Barclays not telling him from the outset about the LTV threshold. And I don’t think it acted unfairly in not doing so until the valuation was completed. I understand Mr B feels strongly about these matters and it has been a difficult time for him personally – so, I’m sorry to disappoint him. But I don’t agree Barclays has treated him unfairly or unreasonably and I won’t be upholding this complaint. My final decision I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr B to accept or reject my decision before 2 April 2026. Emma Taskas Ombudsman

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