DRN-5586287 – Shortfall sale declined in 2023 and agreed in 2024; complaint not upheld
What happened: A buy-to-let mortgage held on one property within a wider portfolio. In June 2023 the borrower told Rooftop his buy-to-let business was no longer viable and that he had a buyer for the mortgaged property, but that the sale would leave a shortfall of around £15,000 which he said would be covered by the equity from the sale of another property. Rooftop declined and required full repayment on sale. The other sale did not proceed and both properties were let again. In March 2024 Rooftop started enforcement action because of the level of arrears. In April 2024 the borrower asked Rooftop to hold off, served notice on his tenants and remarketed the property. Rooftop agreed; the property sold for around £35,000 less than the asking price, leaving a shortfall of over £60,000.
What the Ombudsman decided: Complaint not upheld.
The published decision records that the complaint was not upheld.
What mattered to the Ombudsman
- What the lender knew when it made the 2023 decision, not what happened afterwards
- The risk that the mortgaged property would sell before the other property, leaving the agreed shortfall unpaid
- That most of the increase in the shortfall came from payments not being made and a lower 2024 sale price
- That agreeing the 2024 sale avoided further receiver and solicitor costs
These are the factors this particular decision treated as important. Ombudsman decisions are not precedent and another case can turn out differently.
What this does not prove
It does not establish that refusing a shortfall sale is always fair. It records that there is no obligation to accept less than the amount owed, but that the lender must still treat the borrower fairly.
Source details
- Source type
- Financial Ombudsman Service decision
- Source
- Financial Ombudsman Service, final decision DRN-5586287 (Ombudsman: Rob Deadman)
- Date
- 11 November 2025
- Reference
- DRN-5586287
- Mortgage type
- Buy to let
- Jurisdiction
- United Kingdom
- Organisations
- Rooftop Mortgages Limited
- Source quality
- Official source
- Last checked
- 2 September 2026
- Added
- 2 September 2026
What happened
A buy-to-let mortgage held on one property within a wider portfolio. In June 2023 the borrower told Rooftop his buy-to-let business was no longer viable and that he had a buyer for the mortgaged property, but that the sale would leave a shortfall of around £15,000 which he said would be covered by the equity from the sale of another property. Rooftop declined and required full repayment on sale. The other sale did not proceed and both properties were let again. In March 2024 Rooftop started enforcement action because of the level of arrears. In April 2024 the borrower asked Rooftop to hold off, served notice on his tenants and remarketed the property. Rooftop agreed; the property sold for around £35,000 less than the asking price, leaving a shortfall of over £60,000.
What the borrower complained about
The borrower said Rooftop should have agreed to the sale at a shortfall in 2023, when the shortfall was around £15,000, and that its refusal led to a shortfall of over £60,000 by the time it agreed to a sale in 2024.
What Rooftop said
Rooftop did not uphold the complaint. It said it was the borrower's decision to take the other property off the market in 2023, so it was not responsible for the mortgaged property being unsold at that time, and that the increase in the shortfall resulted from the borrower not making his contractual monthly payments.
What the Ombudsman decided
The Ombudsman recorded that there is no obligation on a lender to accept less than the amount owed, but that Rooftop was required to treat the borrower fairly. He found Rooftop's 2023 decision fair on what it knew at the time: it was concerned that if the mortgaged property sold before the other property and that sale fell through, there would be no way to repay the shortfall it had agreed to. He found the majority of the increase in the shortfall was caused by payments not being made and by the lower price achieved in 2024, both outside Rooftop's control. He recorded that by 2024 the level of arrears had changed the position, and that agreeing the shortfall sale then saved further costs of receivers and solicitors.
Outcome
- Complaint not upheld.
Key extracts
“By agreeing to Mr M selling with a shortfall in 2024, further costs of receivers and solicitors have been saved. I don't consider this unreasonable.”
Ombudsman, final decision DRN-5586287
“The starting point here is that there's no obligation for a lender to accept anything less than the amount that is owed under a mortgage. But Rooftop was also required to treat Mr M fairly.”
Ombudsman, final decision DRN-5586287
Why this record may be relevant
This decision concerns how a proposed sale at a shortfall is assessed, and expressly records that permitting a sale avoided the costs of receivers and solicitors.
Source
Financial Ombudsman Service, final decision DRN-5586287 (Ombudsman: Rob Deadman)
View original sourceThe date shown is the date stated in the published decision by which the consumer was required to accept or reject it.
If you believe this record is inaccurate or incomplete, see corrections and right of reply.