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Golding Homes Limited (202213912)

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REPORT

COMPLAINT 202213912

Golding Homes Limited

14 February 2024


Our approach

The Housing Ombudsman’s approach to investigating and determining complaints is to decide what is fair in all the circumstances of the case. This is set out in the Housing Act 1996 and the Housing Ombudsman Scheme (the Scheme). The Ombudsman considers the evidence and looks to see if there has been any ‘maladministration’, for example whether the landlord has failed to keep to the law, followed proper procedure, followed good practice or behaved in a reasonable and competent manner.

Both the resident and the landlord have submitted information to the Ombudsman and this has been carefully considered. Their accounts of what has happened are summarised below. This report is not an exhaustive description of all the events that have occurred in relation to this case, but an outline of the key issues as a background to the investigation’s findings.

The complaint

  1. The complaint is about the landlord’s handling of a staircasing application made by the resident.  

Background

  1. The resident and her husband are shared ownership leaseholders of a property, the freehold of which is owned by the landlord, a housing association. In this report, all actions undertaken by the couple, jointly or as individuals, will be attributed to ‘the resident’ for clarity.
  2. The resident notified the landlord of her intention to increase her share of the property (staircase) on 17 April 2021. The landlord sent her a ‘notice of intention’ (NOI) form to complete on 28 May 2021. On 20 June 2021 she requested another NOI form as she had IT issues and had lost the email, and the landlord sent this the next day.
  3. The resident was unhappy with the landlord’s initial delay and the landlord said it would meet the cost of a further valuation if the existing one expired. The resident had a mortgage illustration dated 29 June 2021, valid until 6 December 2021 at 1.8% interest, fixed for 2 years. She returned the NOI on 28 July 2021 and the landlord chased the  affordability report on 3 September 2021.
  4. The resident said the initial mortgage product was withdrawn. The mortgage offer dated 11 October 2021 had an increased interest rate of 2.57% fixed for 2 years. There were further delays on both sides and staircasing completed on 3 March 2022.
  5. The resident complained on 18 April 2022 about delays by the landlord resulting in increased mortgage payments. The landlord responded on 17 May 2022 and offered £50 compensation for the delay. It said it had also paid twice for the valuation to be extended. 
  6. The resident complained further and said she was £1,752 out of pocket due to the original offer expiring and the mortgage rate increasing. The landlord increased its offer to £250 in its final response dated 1 August 2022. It apologised and said it had learned from the complaint.  She remains unhappy with the landlord’s delays and feels her concerns have not been dealt with fairly and that she is out of pocket financially. 

Assessment and findings

  1. This investigation does not examine if there was a delay by the landlord, as this is not disputed. Rather it considers if the landlord should pay the difference between the mortgage instalments quoted in the illustration dated 26 June 2021, and subsequent mortgage offers.
  2. The resident acknowledges that there were delays by her solicitor which she has been compensated for, although it is not known by how much.
  3. The booklet ‘A Guide to Staircasing’, produced by the landlord, says the leaseholder must choose a valuer from the landlord panel. The landlord will then calculate the purchase price of the shares the leaseholder wishes to buy, although no timescale is given for the landlord to do this.
  4. The Guide says the leaseholder then has 4 weeks to complete and return the ‘notice of intention’ form and that no further action will be taken until this form is returned. If the leaseholder is not staircasing to 100%, they will also need to provide affordability evidence which will be assessed by an independent financial advisor.
  5. The summary page within the Guide asks leaseholders to contact the ‘homeownership team’ to request an application to staircase. A ‘shared ownership’ email address is quoted on the back page of the booklet for further information.
  6. In this case, the resident provided a copy of the property valuation when she contacted the landlord on 17 April 2021. She said she was aware that it was only valid for 3 months.
  7. The resident contacted the landlord on 28 May 2021 as she had not had a response. The landlord advised the correct ‘shared ownership’ email address she should have used, as the one she used was a generic ‘help’ one. At the same time the landlord provided a ‘notice of intention’ form, it asked her to complete and return it.
  8. There is no evidence that the resident was advised to use the generic email address for the staircasing application. It would be reasonable for the landlord to have forwarded the email to the correct team earlier than it did. The landlord offered £50 compensation in the first stage response dated 30 May 2022 due to the problems with the initial email being forwarded.
  9. The landlord acknowledged that there were improvements to be made to its processes including the website and FAQs in respect of staircasing. The Ombudsman welcomes the landlord learning from complaints in this way.
  10. There is no evidence that the matter was chased by the resident in the 5 weeks after her initial email was submitted, despite it being time critical. There is also no evidence that this initial delay in the form reaching the shared ownership team was in itself the cause of the resident losing the lower mortgage rate.
  11. Once the email was received in the correct department on 28 May 2021, the landlord asked the resident to return the ‘notice of intention’ (NOI) form. The Guide says this must be returned within 4 weeks, during which time no further action will be taken on the application. Unfortunately, the resident had IT problems during this time so requested a further copy on 20 June 2021. The landlord sent it the next day. However, the NOI form was not received back by the landlord until 28 July 2021, 2 months after it was first provided, and the resident advised that the application would not proceed without it. 
  12. The resident obtained a ‘mortgage illustration’ on 29 June 2021. The illustration was based on a 2-year fixed interest rate of 1.80% and was valid for mortgages completing before 6 December 2021. The illustration was not a mortgage offer and said it did not constitute an obligation on the lender to grant the resident a loan.
  13. The next evidence of any contact between the resident and landlord was the landlord’s email to the resident on 3 September 2021 chasing an affordability check. This was noted as received by the landlord on 19 October 2021.
  14. The resident said that she needed a ‘memorandum of sale’ for her new lender, but the landlord explained that this would not be provided until the mortgage completed. There was also a discussion around the extended valuation being required, although there is no evidence that the resident had provided this before the landlord’s request of 19 October 2021.   
  15. Prior to this, on 11 October 2021, a mortgage offer was issued by the resident’s lender. This was based on a 2-year fixed rate of 2.57% and was valid until 4 March 2022. There is no explanation from the lender as to why it did not issue an offer based on the mortgage product in the earlier illustration. The resident has said it was because of the delays in the landlord dealing with the original request to staircase. 
  16. By the time the new offer was issued, there had been periods of delay on both sides. It is noted that the resident felt her solicitors were responsible for some delay and that she had been compensated for this. It is not known how much this compensation was.
  17. The landlord’s final response on 1 August 2022 increased the compensation offer to £250 with a view to reaching a compromise. The landlord again acknowledged the learning from the complaint and said it had changed the team resources to reflect the dedicated contact that the resident had with staff that had gone well.
  18. The landlord said that both parties had instructed solicitors in November 2021 and the mortgage completed in February 2022, which it felt was a reasonable pace. However, the period which is relevant to the resident’s loss is from the application to staircase being made in April 2021 and 11 October 2021 at the latest, as this is the date that the evidence shows the lower interest rate was no longer available.
  19. The delay in the resident returning the NOI was significant. There is nothing to demonstrate that the landlord withdrew the cheaper product due to its own delay. There was no guarantee that the rate quoted on the mortgage illustration would have been available to the resident outside of any delay by the landlord.
  20. Even if the landlord could be held responsible for the staircasing not completing before 11 October 2021, it is not responsible for meeting further costs. This is because purchasers must accept that there is an inherent risk in the conveyancing process. The landlord is not responsible for changes in prevailing housing market conditions or of changes in interest rates if mortgage offers need to be renewed. It should also be noted that the property valuation or the interest rate could have changed to the benefit of the resident during the period before completion.
  21. The Ombudsman’s Remedy Guidance recommends sums of between £100 and £600 for cases where there has been no permanent impact but there was failure that adversely affected the resident. There were delays by the landlord which would reasonably have been distressing and caused inconvenience for the resident and it is correct that the landlord acknowledged this. The sum of £250 already offered is in line with the guidance and therefore is reasonable redress in this case.

Determination

  1. In accordance with paragraph 53(b) of the Housing Ombudsman Scheme, the landlord has offered redress to the complainant prior to investigation which, in the Ombudsman’s opinion, resolves the complaint satisfactorily.

Recommendations

  1. It is recommended that the landlord pay the resident the sum of £250 offered in the final response of 1 August 2022, if this has not been paid already.