Homes England

4. Mr A complains about HE’s ‘Help to Buy’ (HTB) administration. He says it failed to notify the Land Registry that he had paid off his HTB loan, which meant that he was unable to take out a new mortgage at a more favourable rate.

5. As a result of this, he said he was at risk of defaulting onto his mortgage lender’s standard variable rate loan, increasing his mortgage rate from 2.2% to 7.99%. These were not payments he was able to sustain.

6. As an outcome of his complaint, he would like HE to pay him the difference in the increased mortgage payment he was required to make in August 2023.

7. In July 2018, Mr A took out a HE’s HTB Loan to assist in the purchase of a new property. Alongside this he took out a fixed term interest rate mortgage with an independent mortgage provider to meet the rest of the cost of the property. The Help to Buy scheme allows eligible first-time buyers to purchase a new-build home with a smaller deposit. The HTB loan covers a percentage of the property's value, which reduces the amount the buyer needs to borrow through a mortgage.

8. Following an inheritance, Mr A found himself in a financial position where he could pay off the HTB loan in full, which he did in May 2023. The usual term of the loan is 25 years at which point it needs to be repaid. However, the buyer can pay back all, or part, of the loan at any time. At around the same time, his fixed term mortgage rate was due to end. This meant his mortgage payments would increase unless he could secure a new mortgage deal. He was therefore actively engaging with a new mortgage provider and had received a new, more favourable, interest rate offer.

9. Although HE has overall responsibility for the HTB scheme, it delegates the day-to-day administration of it to a separate independent company. At the time of the events, a company called Target was responsible for fulfilling this function. So, on 5 June 2023, Mr A’s solicitor made a formal request (a DS1 form), through Target, for HE to deregister its interest in the property (this effectively involved HE telling Land Registry the HTB loan had been repaid). When taking a mortgage (or other loan) on a property, the lender will usually register a ‘charge’ against that property with Land Registry. This means that, if the property is sold before the loan is repaid, the lender has the right to recover all, or part, of the money they are owed from the proceeds of the sale.

10. We have seen evidence that Target completed the necessary administration checks on the documents the solicitor submitted. However, we have seen no record that Target passed the results of these checks, or the relevant documents for the de-registration to take place, on to HE.

11. On 16 June 2023, Target’s responsibilities for administering the scheme came to an end and another company (Lenvi) took over the role. On the same day, Mr A contacted a solicitor acting on behalf of the new mortgage provider and explained that the HTB loan had been repaid.

12. The mortgage company’s solicitor responded the same day and said the lender required confirmation from Land Registry that HE’s interest in the property had been discharged. The solicitor said the lender ‘would not proceed’ without this.

13. On 7 July 2023, Mr A contacted the lender’s solicitor again but was again told the lender would not proceed without the required confirmation from Land Registry.

14. On the same day, Mr A contacted Lenvi and asked what was happening with his request for HE to deregister its charge on his property. Lenvi responded on 12 July 2023 and said it had raised this with HE as an urgent matter. It said that, usually, the de-registration process takes between 6-8 weeks and, although, given the urgency of the matter, it hoped it could be resolved more quickly, it could not guarantee this.

15. Also in July 2023, Mr A’s solicitor contacted Lenvi to ask about the deregistration (as Land Registry was still recording that HE retained an interest in the property). However, Lenvi told the solicitor it had no record of the DS1 form submitted to Target and asked the solicitor to submit a new one. The solicitor did so and Lenvi passed the information to HE.

16. On 8 August, HE contacted Land Registry and formally deregistered its interest in Mr A’s property.

17. Mr A complained to Homes England about what had happened. He said the delay in deregistering HE’s interest in the property had negatively affected his ability secure the more favourable mortgage rate offered to him and had resulted in him paying a higher rate mortgage than would otherwise have been the case.

18. HE (through Lenvi) acknowledged that the deregistration had not been processed as quickly as Mr A had expected. However, it did not accept this had led to Mr A being financially disadvantaged.

19. HE is the government’s housing and regeneration agency. With its partners, it aims to accelerate the pace of house building and regeneration across the UK. One of the services it provides is HTB loans. These are equity loans designed to assist home buyers. The HTB scheme makes new build homes available to all home buyers.

20. According to HE guidance, ‘How to repay your equity loan using your own money’, once the person has fully repaid their HTB loan, HE will apply to the Land Registry to remove the charge on the property. It adds that, if the person is paying monthly interest on their mortgage, they should continue to do so until the process is complete.

21. The guidance provides no timescale for how long this process takes to complete. So, as part of our investigation, we asked HE about this. It told us it aims to submit the discharge request to Land Registry within 20 working days of the completion of all necessary checks. However, it made clear this was a guide only and was not a guaranteed timescale. It added that the individual processes may take longer depending on the customer’s circumstances and how busy its processing teams are.

22. HE added that the whole of 2023 and early 2024 were not normal circumstances in the UK housing and mortgage markets. This was due to the sustained period of interest rate rises announced by the Bank of England to control UK inflation which resulted in its services being extremely busy. It said the unprecedented increase in enquiries and requests received by the HTB team, including Target, from customers and their solicitors during 2023 and the first and second quarters of 2024 resulted in a significant increase in the workload of its Mortgage Administration teams and led to increased waiting times in the processing of customer's requests.

26. Mr A complains HE was too slow notifying the Land Registry that he had cleared his HTB loan.

27. Under our Principles of Good Administration – being customer focussed – we expect organisations to behave helpfully, dealing with people promptly, within reasonable timescales and within any published time limits. We have looked at this complaint in the light of these Principles.

28. It seems clear that things did not go in the way Mr A had expected. However, we cannot say this was because of maladministration by HE. Nor can we be certain Mr A suffered a financial loss because of what happened.

29. To address the first of these points, it seems likely, based on the evidence we have seen so far, that Target did not pass the relevant information to either Lenvi or HE. Unfortunately, we cannot say why this was. And we have seen evidence that Homes England made enquiries with Target about this but has not received helpful responses. Nor is this something we can reasonably explore further.

30. We should explain that, by law, we can look only at work done by, or on behalf of, organisations named in Schedule 2 of the Parliamentary Commissioner Act 1967. Currently, Target HCA is not one of those organisations. We accept that, at the time of these events, it was working on behalf of HE but, as we have explained, that relationship has now ended.

31. We can look, and have looked, at what, if anything, HE, as the organisation with overall responsibility for the HTB scheme, could and should have done in these circumstances.

32. The evidence we have seen so far suggests that neither HE, nor Lenvi, was likely aware at the time that Mr A’s solicitor had formally provided Target with the documentation needed to start the deregistration process. As such, it would have been unreasonable to expect either organisation to have progressed the matter. The evidence also shows that, when this was brought to their attention, both Lenvi and HE tried to move matters on quickly.

33. Given the absence of the original DS1, it was not unreasonable for Lenvi to ask Mr A’s solicitor to complete a new one. The evidence shows that, once received, Lenvi passed the matter on promptly. The evidence further shows that, upon receipt, HE also moved quickly to notify Land Registry. We would not have expected it have done more.

34. We should add that, even if matters had progressed as planned, we cannot say deregistration would have taken place before the end of July deadline. As HE has explained, although it would usually have hoped to complete the process within 20 working days (i.e. by mid-July 2023), this was not a guaranteed timescale. Indeed, as HE has also explained, this aim was based on everything progressing smoothly. In this case, not only did interest rates change frequently during the period in question (putting pressure on HE’s resources) but Mr A’s case was not a straight-forward one. We have seen evidence that Homes England had concerns related to Mr A’s property valuation which caused it to make more enquiries than may otherwise have been the case. For these reasons, we cannot say HE should have been able to complete the deregistration process as quickly as it, or Mr A, may have liked.

35. We must also consider the independent mortgage provider’s role in these events. It would have been for that provider to decide what mortgage, or other financial product, to offer Mr A. The same is true of any other mortgage provider with whom Mr A may have wished to secure a deal. We are aware that, in circumstances like this, mortgage providers take several factors into account when deciding what products to offer its customers. Although an existing third-party interest in a property may be one factor, we cannot say it is the only, or over-riding, one.

36. Although the evidence shows the mortgage provider would not proceed with the offer until it had confirmation that HE had successfully deregistered its interest in the property, that was a decision for the mortgage provider, not HE, to make. We cannot hold HE responsible for an independent third-party’s decision.

37. In summary, there is no evidence of maladministration by HE. For that reason, we are not upholding this complaint.

38. We were sorry to learn of the circumstances which led to Mr A’s complaint. Although we do not uphold it, we recognise the frustration he suffered in having to pay more for his mortgage than it had been expecting.

39. We also recognise that this is unlikely to be the outcome he was looking for when he approached our office. We hope we have clearly explained the reasons for our decision, and we thank him for bringing his concerns to our attention.

1. The view set out in this report is our final decision. This decision is no longer subject to change, as we have now passed the deadline for feedback on our provisional view.

2. We do not uphold this complaint. This is because there is not enough evidence to show HE’s actions fell short of the relevant standards.

3. We will explain our decision in more detail below.