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Mortgage complaints surge by more than half to 11,835 – The Ombudsman

by: Anna Sagar
  • 26/05/2021
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Mortgage complaints surge by more than half to 11,835 – The Ombudsman
New complaints about mortgages have surged by 56 per cent over the past year to 11,835, driven by residential mortgages, the Financial Ombudsman Service (FOS) has said.

 

The latest annual data from FOS showed that 10,510 of new complaints came from residential mortgages. The top three complaint categories in the sector were first charge repayments, first charge interest-only with no repayment vehicle and second charge repayment.

After residential mortgages, the highest number of new complaints were seen by non-residential mortgages at 807, equity release at 498 and home purchase plans with 20.

The FOS said complaints were made about contract terms and standard variable rates, as well as rate reductions not passed on when the Bank of England base rate fell.

It also noted complaints about payment deferrals, including the guidance given and consumers not understanding the implications of such measures.

Further, complaints emanated from Covid-19-related issues in processing mortgage applications, as well as changes to lending criteria and appetite meaning applications may have been declined.

The data also showed that enquiries to FOS about mortgages increased over the past year, growing by 12 per cent to 14,573 over 2020 and 2021.

Residential mortgage enquiries grew slightly from 12,862 to 13,034, whilst home purchase plan enquiries fell from 35 to 30.

The FOS also introduced new categories for more general enquiries in non-residential mortgages and equity release, which came to 916 and 588 respectively.

The overall uphold rate for complaints in mortgages was 21 per cent. Residential mortgages saw an overall uphold rate of 23 per cent, which is a decrease of two per cent from last year.

Nausicaa Delfas, interim chief executive and chief ombudsman’s at FOS, said: “The sharp increase in complaints about issues other than PPI is a reminder that it has rarely been more important for financial businesses to support their customers when things go wrong. As people continue to deal with the impact of Covid-19 on their lives and finances, they know they can come to our service if they’re not happy with how a financial business has treated them.”

An FOS spokesperson confirmed that it did not publish specific figures on complaints against brokers.

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