Why was my second mortgage offer declined by HSBC?

Why was my mortgage to buy a property declined by HSBC when it approved it first time round?

• We speak to HSBC about why a second mortgage application was declined
• First mortgage application was approved but the offer expired after six months 
• They reapplied and thought it was a formality to get a second offer approved

In 2022, I decided to settle – and buy a property – in Northern Ireland having moved there from England the previous year.

I found a house to buy and accepted an offer on my house in England. I applied to HSBC to port my mortgage, completed the application, had the house surveyed and received a mortgage offer in October 2022.

Unfortunately, the house sale in England fell through, so I had to put it back on the market. I found another buyer and heaved a sigh of relief that things were back on track. 

However, my mortgage offer expired after six months and so I had to reapply in order to secure the finance to buy my new home in April this year.

Turned down: We take a look at why a first mortgage application was approved, but a second was declined when the offer expired after six months

I thought this would be a formality. My loan to value was 30 per cent, my circumstances hadn’t changed and I was looking to buy the same property as on my original application, which had been approved.

HSBC said it would have to do another valuation. It sent a valuer and I sat back waiting for the mortgage to be approved. 

However, the second valuer reported back to HSBC that in his opinion: ‘due to near proximity of pylons and power lines along with farm buildings being on the approach to the property, this could impact on the future saleability of the property’ and recommended that the bank didn’t lend.

I appealed to HSBC regarding the findings of the second valuation. The pylons are some distance from the house in a neighbouring field, and while the power line runs over the paddock that is within the property boundary it does not run above the house itself. 

I appealed but HSBC has confirmed that it is sticking by the second valuer’s report and will not lend. Can this be correct?

MailOnline Property expert Myra Butterworth replies: This sounds like a deeply frustrating situation regarding your mortgage applications.

Your first application was passed while the second was declined, despite no change in the property you wanted to buy or in your financial circumstances at the point of application.

We spoke to HSBC, which confirmed that the initial valuation approved the mortgage. 

It said that ‘all valuers are independent and Rics qualified and carry out assessments of properties in line with the policies of the providers’.

It went on to explain the discrepancy saying that ‘as such, there is a certain amount of interpretation or judgement required, so decisions my vary at times.’

Having reviewed the case, HSBC concluded that it stands by the decision to decline the mortgage for these reasons.

An HSBC UK spokesperson replied: ‘Valuations are used to protect mortgage applicants and the bank, to ensure a property is resaleable or remortgagable.

‘This protects the customer from buying a property that they may be unable to sell or remortgage, in addition to ensuring adequate security for the bank.’

‘In this instance, the mortgage was declined due to the proximity of the electricity pylon, with power lines running over the property in addition to the presence of adjacent farm buildings and access only provided through a farm-type yard.’

However, within hours of that, the spokesman returned to us and added: ‘We’re taking another look at it and will be contacting [the customer] to discuss the matter.’ 

Hopefully, this will get sorted for you and you will be able to buy your home.

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