Selwood Housing Society Limited (202220136)

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REPORT

COMPLAINT 202220136

Selwood Housing Society Limited

10 January 2025

 

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 applicant 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 the applicant’s application for a shared ownership property.
  2. The Ombudsman has also investigated the landlord’s complaint handling.

Background

  1. The applicant applied to buy a shared ownership property from the landlord, a housing association, on 1 September 2022. She applied to buy a 40% share of a 3 bedroom property using a cash lump sum.
  2. On 17 October 2022, the landlord told the applicant that her application was declined because the financial assessment showed that the ongoing costs were unaffordable for her. The applicant replied and said that there were errors in the landlord’s calculations and provided evidence of her universal credit benefit entitlement to be included in the assessment.
  3. In October and November 2022, the landlord reassessed the application on 4 occasions. This included assessments by an external consultant and an external financial advisor. On all occasions, the landlord declined the application and said this was because the ongoing costs were unaffordable and unsustainable for the applicant.
  4. The applicant made a complaint to the landlord on 10 November 2022. She said her application had not been dealt with fairly, errors had been made, the landlord had been unprofessional and it had discriminated against her. The landlord acknowledged the complaint and advised it would provide a response by 15 December 2022.
  5. The applicant asked the landlord to carry out an urgent reassessment of her application in the meantime, based on further information provided and errors that had been made, which the landlord agreed to. On 29 November 2022, the landlord told the applicant it had completed the reassessment of her application. It had looked at the affordability for 2 and 3 bedroom properties but neither were deemed affordable.
  6. On 15 December 2022, the landlord provided its stage 1 response. It acknowledged there had been delays and communication failures in its handling of the application, which it apologised for, but outcome remained that the purchase was unaffordable. The applicant escalated the complaint to stage 2 the same day.
  7. The landlord provided its stage 2 response on 18 January 2023. It said the complaint was partially upheld because of mistakes made and communication failures. It apologised and confirmed it had taken on board learning. Despite this, the final outcome was correct and there was no evidence of discrimination. The applicant replied the same day and asked to escalate the complaint to stage 3. She said she was dissatisfied because the landlord had failed to address several points and made claims that were not true. She wanted this Service to investigate the matter.
  8. On 24 January 2023, the landlord advised the applicant that, on consideration of her escalation request, the next step was for her to escalate her complaint to the Ombudsman. This was its final response. The same day, the applicant asked this Service to investigate her complaint.

Assessment and findings

Scope of investigation

  1. The Ombudsman acknowledges that the applicant is dissatisfied with the outcome of the landlord’s financial assessment of her application. It is not the role of the Ombudsman to reassess the application or make a determination on whether the outcome of the assessment was correct, as this would be better dealt with through the courts (reflected at paragraph 42.f of the Scheme). What we have considered is how the landlord responded to the applicant’s concerns about how her application was handled and whether this was fair and reasonable in the circumstances.
  2. The applicant has told this Service that the matters complained of have negatively affected her mental health. The Ombudsman does not doubt the applicant’s comments but it is beyond the remit of this Service to determine whether there was a direct link between the landlord’s actions and her ill-health. She may wish to seek independent advice on making a personal injury claim if she considers that her health has been affected by any action or failure by the landlord (reflected at paragraph 42.f of the Scheme). While the Ombudsman cannot consider the effect on health, consideration has been given to any general distress and inconvenience which the applicant experienced as a result of any service failure by the landlord.

Handling of the applicant’s application for a shared ownership property

  1. When the applicant first submitted her application in September 2022, the landlord took more than 6 weeks to respond with the outcome. Its shared ownership sales process in place at the time did not include a set timescale in which the landlord would respond to applications. However, considering the nature of the application, this was too long and the landlord itself acknowledged this within the stage 1 and 2 responses.
  2. The landlord has subsequently told this Service that the reason for the delay was due to changes in the Bank of England’s borrowing rates, which affected mortgage rates and offers. This meant the landlord gave priority to addressing the needs of applicants nearing completion as their funding was at risk of being withdrawn. This is a reasonable explanation for the delay, but there is no evidence that the landlord told the applicant this at the time.
  3. The landlord provided one update to the applicant in late September 2022 and gave a deadline for the outcome to be provided in early October 2022; but then failed to meet this. It was not until the applicant chased the outcome on 17 October 2022 that this was provided. The delay and lack of communication amounts to maladministration and left the applicant feeling ignored and that the landlord was not treating the application with importance. As part of the complaint, the landlord identified learning as a result of this failure, which is positive.
  4. On 19 October 2022, the applicant disputed the outcome of her application and asked to speak with a manager. The landlord advised her that the manager was away until the following week and would call her then, but also logged a formal complaint. While the applicant had not expressly asked to make a complaint, she had expressed dissatisfaction and so it is understandable that a complaint was raised.
  5. The Ombudsman acknowledges that it was frustrating for the applicant when the landlord subsequently said that it could not comment further on the issue until the complaint was allocated. However, when she made it clear that she did not want the matter dealt with as a formal complaint, the landlord did not progress this and continued its communication with her outside of its complaints process, which was reasonable.
  6. The landlord used the Homes England calculator to complete an affordability assessment for the applicant. She challenged this as the Homes England guidance (the guidance) says this did not work for cash purchasers, which she was. However, the guidance also says that the calculator can be used to assess the applicant’s ability to afford and sustain the purchase over a period of time. Therefore, it was reasonable that the landlord used this and this was confirmed by Homes England in an email exchange with the applicant in October 2022.
  7. After the initial assessment of the application, the landlord reviewed this and/or completed reassessments on 4 occasions in response to the applicant’s concerns. These reassessments included 1 by an independent consultant and 1 by an independent mortgage advisor. While frustrating for her that the outcome continued to be the same, the landlord’s actions showed that it was taking her concerns seriously. The reviews/reassessments were all completed in a timely manner and the outcome provided to the applicant in writing with explanations as to how it had reached its conclusions.
  8. In addition to the reassessments, the landlord also agreed to refer the application to a second independent financial advisor suggested by the applicant and suggested an alternative property in another location. Both of these actions show that the landlord was committed to working with the applicant to help her purchase a property by exploring different options.
  9. There was a lot of contact between the landlord and the applicant following the initial outcome. Within this, the applicant raised a number of specific queries and challenges, including about maternity pay, benefit entitlement, her husband’s new job and incoming/outgoing expenses. The landlord’s handling of these contacts was reasonable and, in general, it responded in a timely manner and provided specific answers to the queries raised, with detailed explanations.
  10. When the applicant asked for copies of the completed budget planners in mid-October 2022, the landlord failed to provide these in the committed timescale, which was disappointing for the applicant. However, once this error was identified, the landlord provided the requested documents and apologised for the delay in doing so, which was reasonable.
  11. The applicant raised concerns that her initial application was not assessed by an independent financial advisor. In response to this, the landlord told her that its process was to complete an initial assessment to see if the purchase was affordable and if the applicant passed, they would be referred to a financial advisor.
  12. The guidance says that a suitably qualified, experienced and regulated mortgage or financial advisor must complete an affordability assessment for individual applicants. While the Homes England calculator could be used to make an initial assessment of an applicant’s ability to afford and sustain the purchase, it was not intended to provide a definitive affordability assessment. It is expected that such an assessment would be undertaken by a mortgage lender and/or independent financial advisor.
  13. The landlord said it was satisfied that its process was in line with the guidance. However, based on the information provided, it is the view of the Ombudsman that it was not. This is because the guidance is clear that the initial affordability assessment should not be relied upon to provide the outcome and this needed to be assessed by a qualified financial or mortgage advisor.
  14. In this case, the application was reviewed by a mortgage advisor in early November 2022. However, this was the fourth assessment of the application and only done in response to the applicant repeatedly raising concerns that her application had not been reviewed by an independent financial advisor. While this was in line with the landlord’s process, it was not in line with the guidance.
  15. It is noted that the outcome of the assessment by the mortgage advisor was the same as the previous outcomes. However, in accordance with the guidance, the landlord should have referred the application to an independent mortgage or financial advisor at the outset. While this was a failure by the landlord, the detriment caused was minimal as the outcome was not affected. However, had the landlord referred the application to the independent advisor sooner, this may have reduced the time and trouble incurred by the applicant in challenging the outcome on multiple occasions.
  16. The Ombudsman recognises that the landlord needs to take a pragmatic approach when assessing applications and that it may not always be necessary for these to be reviewed by a financial or mortgage advisor for a decision to be made. Particularly as the involvement of an independent advisor will incur costs for the landlord and is likely to increase response times for applications. Ultimately, it is for the landlord to decide whether to accept an application and so it is down to the landlord to clearly set out how it will reach its decision as part of its policy and procedures.
  17. The landlord’s shared ownership sales process in place at the time has been reviewed as part of this investigation and the Ombudsman has identified that it was not expressly clear on who would complete the assessments and at what point the application would be referred to a financial or mortgage advisor. Therefore, an order is made for the landlord to review its current policy and practice in relation to assessments of shared ownership applications to ensure it is clear about who carries out assessments and at what point an application will be assessed by a financial or mortgage advisor. If there are circumstances where an application will not be assessed by a financial or mortgage advisor, the landlord must stipulate this and explain why it is going against the guidance on this issue.
  18. The applicant has raised concerns that the assessment completed by the mortgage advisor in early November 2022 was not a proper assessment but merely a review of the previous assessments. The Ombudsman acknowledges the applicant’s concern, however, the landlord has provided evidence that it submitted all relevant documents to the mortgage advisor, including bank statements and emails from the applicant with relevant information. This would have enabled them to complete a full assessment of her application and not just review what had already been done. The Ombudsman is not in a position to comment further on the advisor’s handling of the application as they are an independent body and as such their actions and fall outside the Ombudsman’s jurisdiction (reflected at paragraph 41.b of the Scheme).
  19. The applicant said the landlord had discriminated against her by declining to offer her the property. The Ombudsman is unable to make a determination on whether there was discrimination or not as this is more appropriately considered by a court (reflected at paragraph 42.f of the Scheme). However, what we can consider is how the landlord responded to the applicant’s concerns. In this case, the landlord failed to acknowledge or respond to this issue in the stage 1 response but did provide a response to this as part of the stage 2 response. This response was detailed and empathetic and acknowledged its failure to respond at stage 1. Therefore, its overall response to the applicant’s concerns about discrimination was reasonable.
  20. The landlord acknowledged failures in its handling of this matter. It apologised and identified learning which was in line with the Ombudsman’s dispute resolution principles to put things right and learn from outcomes. The applicant asked for compensation for future costs she would incur as a result of having to move to an unsuitable property due to the landlord declining her application for her desired property. The landlord declined this on the basis that moving home was her choice and so there were no grounds to offer compensation for a future move. This was reasonable as the buying and selling of property is instigated by the buyer/seller and so it would have been the applicant’s choice to move. While her circumstances may have required her to move, it was still her choice to pursue this.
  21. While reasonable that the landlord did not offer compensation for future moving costs, it should have considered whether any other redress was required in recognition of the distress, inconvenience, time and trouble incurred by the applicant, as a result of the identified failures in the landlord’s handling of her application. There is no evidence that the landlord considered this. Therefore, a finding of reasonable redress cannot be made and a finding of maladministration is appropriate. An order is made for the landlord to pay the applicant £150 compensation for its handling of this issue. This is in accordance with the Ombudsman’s remedies guidance.

Complaint handling

  1. The landlord acknowledged the applicant’s stage 1 complaint on 16 November 2022, 5 working days after the complaint was received. This was in accordance with the committed timescale of 5 working days set out in the landlord’s complaints procedure at the time.
  2. The day after the stage 1 acknowledgement was sent, the landlord told the applicant it had extended the deadline for the response to be provided to 15 December 2022. It explained the reason for this was because of the nature of the complaint and to ensure that all issues were investigated. This was reasonable and in accordance with its complaints procedure at the time, which said the landlord would tell the applicant if it needed more time to investigate the complaint.
  3. The landlord provided the stage 1 response on the revised deadline of 15 December 2022, 26 working days after the complaint was received. While this was over the committed response time of 10 working days set out in the landlord’s complaints procedure at the time, this was not a failure as the landlord had told the applicant about the extended deadline and kept to this.
  4. The stage 1 complaint was initially allocated to the head of the home ownership team to investigate. This was in accordance with the landlord’s complaints procedure at the time, which said that team managers would be responsible for stage 1 investigations. However, the head of home ownership had been previously involved in this matter, including carrying out a reassessment of the application in early November 2022.
  5. In light of this, the landlord should have identified an alternative member of staff who had not previously been involved in the matter to carry out the investigation. This is a best practice approach to complaint handling and confirmed in the Ombudsman’s Complaint Handling Code, which says that a complaint investigation must be conducted in an impartial manner and the complaint handler must act independently.
  6. The applicant raised her concern about the impartiality of the original stage 1 investigator on 17 November 2022. In response to this, the landlord reassigned the complaint 4 days later and told the applicant it had done this. This was appropriate and showed that it took the applicant’s concerns seriously and was committed to carrying out a fair and independent investigation of her complaint. While frustrating for the applicant that the landlord made this initial error in allocation, it quickly took steps to rectify this when she pointed out the potential conflict of interest. Therefore, there was no failure by the landlord in respect of this issue.
  7. The applicant raised a further concern about the impartiality of the new stage 1 investigator as they were involved in a reassessment of her application completed in late November 2022. The landlord explained that they reviewed the reassessment as part of the complaint investigation and could not have completed this without doing so. This was reasonable and did not present a conflict of interests as the complaint investigation needed to include a review of all actions that had been undertaken.
  8. The landlord acknowledged the stage 2 complaint on 18 December 2022, 2 working days after the escalation request was received, in accordance with its committed timescales. The acknowledgement said it would provide the response within 10 working days, which differed from its complaints procedure at the time as this said stage 2 responses would be provided within 20 working days. As the landlord told the applicant it would provide this within 10 working days, this understandably raised her expectations.
  9. The landlord extended the deadline for it to respond to the stage 2 complaint twice, on 21 December 2022 and 11 January 2023. This was in accordance with its complaints procedure at the time which said it could extend the response deadline. On both occasions, it told the applicant about the extension and provided an updated deadline by which it would respond. This was sensible to ensure that she knew when to expect a response and did not have to chase for further updates.
  10. The landlord provided the stage 2 response on 18 January 2023, 22 working days after the stage 2 escalation request was received. This was slightly over the 20 working day committed timescale set out in its complaints procedure at the time and 12 working days over the revised, shorter timeframe given by the landlord.
  11. The Ombudsman acknowledges that the delay in the response being provided and 2 extensions was frustrating for the applicant. However, as the investigation was happening over the Christmas and New Year period, when the landlord’s offices were closed, and considering the number of issues raised by the applicant, it was reasonable that it took more time to complete. The delay was not significant and the applicant was kept updated on the extensions. Therefore, this was not a failure by the landlord.
  12. When the applicant asked to escalate her complaint to stage 3, the landlord reviewed her request and advised her to escalate straight to this Service. It noted the reasons for this were that she wanted an independent review of the complaint and at each stage she had said she wanted to escalate to the Ombudsman, and this would speed up the process.
  13. The landlord’s complaints policy and procedure at the time did not specifically say that the landlord could do this. However, in the circumstances it was a sensible decision and showed that the landlord had listened to the applicant. By adopting this flexible approach, it meant the applicant was able to escalate her complaint to this Service sooner, which is what she wanted.
  14. Overall, the landlord’s handling of the complaint was fair, reasonable and in accordance with its complaints policy and procedure. Therefore, there was no maladministration in the landlord’s complaint handling.

Determination

  1. In accordance with paragraph 52 of the Scheme, there was:
    1. Maladministration in the landlord’s handling of the applicant’s application for a shared ownership property.
    2. No maladministration in the landlord’s complaint handling.

Orders

  1. Within 4 weeks, the landlord is ordered to pay the applicant £150 compensation for its handling of her application for a shared ownership property. Evidence of compliance to be provided to this Service, within 4 weeks.
  2. Within 12 weeks, the landlord is ordered to review its current policy and practice in relation to assessments of shared ownership applications to ensure it is clear about who carries out assessments and at what point an application will be assessed by a financial or mortgage advisor. If there are circumstances where an application will not be assessed by a financial or mortgage advisor, the landlord must stipulate this and explain why it is going against Homes England guidance on this issue. Evidence of compliance to be provided to this Service, within 12 weeks.