OneSavings Bank (trading as Kent Reliance) · DRN-6253331

The complaint Mr and Mrs E complain that OneSavings Bank trading as Kent Reliance (“KR”) didn’t handle their application for a mortgage fairly and reasonably. What happened Mr and Mrs E wanted a shared ownership mortgage and approached a broker to help them find a suitable mortgage product/lender. Due to Mr and Mrs E’s specific requirements and the fact that Mr E was in a probationary period of his employment, the broker said only one lender offered a suitable product – that was KR. Mr and Mrs E say they were provided with a decision in principle (DIP) which the broker obtained from KR, so proceeded to make a full application. They paid £145 for an admin fee and £585 for the valuation (both to KR). KR were concerned about affordability for a number of reasons but particularly when the memorandum of sale showed that the rental payment Mr and Mrs E would need to make under the shared ownership scheme would be £1,247.81 per month, rather than the £950.00 they’d stated on the application form. There was much correspondence between KR and the broker and the broker and Mr and Mrs E in the weeks that followed. KR said the application didn’t meet its affordability criteria and the broker appealed that a number of times. To consider those appeals KR asked for various documents relating to affordability. The most significant of those documents were evidence from Mr E’s employer that he had passed probation and had a permanent contract and an up-to-date credit card statement to show Mr and Mrs E had repaid their balance. Those documents remained outstanding when Mr and Mrs E’s relationships with both KR and the broker appear to have broken down – they made complaints about both parties. As a result, KR didn’t accept Mr and Mrs E’s mortgage application. Mr and Mrs E have told us KR already accepted his mortgage application but kept asking for more evidence – some of which he couldn’t provide. They also indicated that Mr E resigned from his job and they couldn’t afford to repay the outstanding credit card balance. In its final response letter to Mr and Mrs E dated 31 October 2025, KR didn’t uphold their complaint. But it said it would agree to the mortgage, subject to the provision of the evidence I’ve already mentioned – evidence of permanent employment and evidence of repayment of the credit card balance. Dissatisfied with KR’s response, Mr and Mrs E asked us to consider their complaint. Our investigator didn’t think KR had done anything wrong. She said a DIP was not a guarantee of lending and would always be subject to more stringent checks. She didn’t think KR caused delays. And she thought it was fair for KR to charge the fees it did and it wasn’t responsible for other fees incurred by Mr and Mrs E, such as solicitor’s costs.

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Mr and Mrs E didn’t agree so their complaint has 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. Having done so I came to a different conclusion to our investigator, so I wrote to both parties with a provisional decision, allowing them time to make any final submissions in response. In my provisional decision I said: “To decide Mr and Mrs E’s complaint I’ve thought about whether KR fairly and reasonably handled their mortgage application and whether KR caused Mr and Mrs E to lose out financially. As part of any mortgage application process, I’d expect to see the lender satisfy itself that the mortgage loan payments were sustainably affordable. A lender may give an indication of how much (if any) it is willing to lend in a DIP. That would be based on basic information, including income and expenditure information, provided by the borrower – in this case via the broker. But DIPs are not a guarantee of a successful application, and it is usual for a lender to expect to be provided with verification of income and expenditure. I’ve seen from correspondence between KR and Mr and Mrs E’s broker and its underwriting notes that KR had concerns about affordability from mid-September 2025 when it initially said it could lend subject to the completion of Mr E’s probationary period of employment. But approximately a week later it became aware that Mr and Mrs E’s monthly rental payment would be approximately £1,250, rather than the £950 stated in their mortgage application. Following appeals from the broker, KR eventually said it would be able to lend subject to confirmation of the repayment of a credit card balance and confirmation of the successful completion of Mr E’s probationary period. Mr and Mrs E were never able to provide evidence of either of those requirements. Having considered the sequence of events, I haven’t seen that KR’s consideration of Mr and Mrs E’s application was unreasonable. I don’t think it caused unnecessary delays and I think it was reasonable that it asked for the evidence it did. However, based on what I’ve seen, I’m not persuaded that it was reasonable for KR to progress Mr and Mrs E’s application to valuation stage. I would consider that it is good practice for a lender to satisfy itself that a mortgage application met its affordability criteria, before it instructed the valuation – or at least before it told the appointed valuer to proceed. I say that because undertaking a valuation before affordability criteria is met can lead to an unnecessary expense for the prospective borrower. And that is what happened here. Given that Mr E was in a probationary employment period and that KR required the repayment of not insubstantial credit card balances, I don’t think it was reasonable to assume its affordability criteria would be met. I think it should have waited for those matters to be resolved – verified by the evidence that it requested – before unnecessarily incurring the expense of the valuation on Mr and Mrs E’s behalf. So, while I don’t think KR asked for verification of affordability unreasonably, or delayed the mortgage application, I think it has caused Mr and Mrs E to incur a

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valuation fee unnecessarily. I think it was reasonable for it to charge an administration fee, particularly because of the work it has carried out on the application. And I don’t think it caused Mr and Mrs E to incur any legal fees because it was their choice to instruct solicitors when they did.” KR responded accepting my decision. Mr and Mrs E didn’t accept it. I’ve carefully considered all that they’ve said and will address the most significant of their comments below. Mr and Mrs E remain concerned that KR “accepted” their initial application with knowledge of their credit card balances and that Mr E was new to his employment. They say they’d made it clear they didn’t intend to clear their credit card balances, but their broker was still able to obtain a decision in principle (DIP) from KR. I understand Mr and Mrs E’s disappointment that their application ultimately failed, but, as I said in my provisional decision, a DIP does not guarantee that a full mortgage application will be accepted. It is always subject to full verification of income and expenditure (affordability) and it is reasonable that the requirements of a lender changes based on new knowledge of circumstances. That proved to be the case here when KR became aware that Mr and Mrs E’s rental payment would be significantly more than it previously understood. Mr and Mrs E say that they submitted the correct rental payment information from the beginning of the process. But I haven’t seen evidence of that. The evidence I’ve seen indicates that the rental amount they’d based the DIP on changed after the full application was submitted and they’d heard from the broker. So, as I’ve said, it was reasonable that their requirements changed as they looked to ensure that the proposed mortgage would be affordable for Mr and Mrs E. I acknowledge that the complete sequence of events may never be established with absolute certainty – Mr and Mrs E’s assertions differ significantly from the evidence I’ve seen from the broker and KR. However, in terms of overall outcome, I think the alleged failures of KR around affordability are largely irrelevant. That’s because the success of their application relied on the income of both Mr and Mrs E. As Mr E did not complete his probationary period – and as a result was unemployed – it was inevitable that the mortgage application failed. Any suggestion that the application was delayed and would otherwise have completed while Mr E was still in employment, doesn’t change my thoughts on that. I say that because I think it’s likely that Mr and Mrs E would have experienced affordability issues had the mortgage completed, based on Mr E’s apparent lack of income. As Mr and Mrs E’s submissions have not persuaded me otherwise, my decision remains the same as that outlined in my provisional decision. I don’t uphold the substantive part of their complaint about the fairness of KR’s affordability assessment, but I don’t think KR should have progressed the application to valuations stage when it did. Putting things right To put things right KR should: • Pay Mr and Mrs E £585.00 – the cost of the valuation. • Add 8% simple annual interest* running from the date when Mr and Mrs E said they couldn’t provide the evidence KR required – 4 November 2025 – to the date of settlement. *Interest is at the rate of 8% a year simple. If KR considers that it’s required by HM Revenue & Customs to deduct income tax from that interest, it should tell Mr and Mrs E how much it’s deducted. It should also give them a certificate showing this if they ask for one

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so that they can reclaim the tax from HM Revenue & Customs if appropriate. My final decision My final decision is I partially uphold Mr and Mrs E’s complaint about OneSavings Bank trading as Kent Reliance. And it should follow my instructions in the ‘Putting things right’ section above. Under the rules of the Financial Ombudsman Service, I’m required to ask Mr E and Mrs E to accept or reject my decision before 23 April 2026. Gavin Cook Ombudsman

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