‘I exchanged on £420k home but nearly lost deposit to Atom Bank clause’
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As a single woman in my thirties, I longed for the day I might buy my own house. For years I feared it may never come.
But against the odds, in June last year I had an offer accepted on my first place. Having worked my whole adult life for this, I felt a great sense of achievement.
The lender, Atom Bank, did a valuation on the house in July. The valuation came in at £410,000. This was £17,000 less than what I’d offered. I wanted to negotiate but the seller said she felt unable to agree on a final price until she’d found somewhere she wanted to move to, and knew how much budget she needed. It was a frustrating situation.
This limbo continued until September when Atom got in touch to say that if no progress was made within seven days, the application would be closed and I would lose my mortgage deal. At this point the seller agreed a sale price of £420,000 and I received my mortgage offer in October. The offer was valid until March 19 2023.
Based on all of the above I exchanged last Monday, putting down a 10pc deposit. My solicitor checked with Atom that there was nothing outstanding ahead of exchange and that my mortgage offer was still valid.
The next day Atom emailed my solicitor to say that they couldn’t release the funds I wanted to borrow for the house. This was because the house valuation was about to expire and we still had a few weeks until completion. My broker, my solicitor and myself had all been completely unaware of this deadline. My mortgage is valid until March 19, but apparently this fact was now irrelevant.
I have read every single document that Atom has ever sent me. This includes the terms and conditions, my mortgage offer, and my valuation report. The valuation expiry date is not mentioned anywhere. My solicitor, mortgage broker and the estate agent all say they’ve never come across a situation like this in all the years they’ve been working in the industry.
Effectively, Atom gave me a mortgage offer they weren’t going to honour beyond the end of January, but failed to communicate that to anyone involved. As it stands I am at serious risk of losing the £42,000 deposit I have already paid, as well as the house if Atom refuses to honour the mortgage.
Now Atom wants to revalue the house, but the estate agent is hesitant to allow it as she feels the price might have fallen in the meantime. This would mean I’d have to plug the gap with a higher cash deposit, which I’d probably be unable to do. I’m so unbelievably stressed about it all and have no idea what to do.
– SC, Brighton
Dear reader,
As a woman buying your first house on your own without assistance from family or a partner, you felt really proud that you had managed to pull this off.
Once you’d exchanged contracts with the seller you thought it was a done deal, so I can only imagine how dreadfully anxiety-inducing it must have been to have the rug pulled from under your feet like this. Once contracts have been exchanged in house purchases, deposits are at risk, meaning you stand to lose £42,000, a sum which it has taken you years to save up.
You sent me all the correspondence from Atom and I agreed there was no mention of this deadline regarding the house valuation. Surely such an important deadline should have been clearly communicated from the outset? I asked Atom to investigate, explaining your plight, yet days passed and I heard nothing.
I sent several emails to its press office, all of which went unanswered, leaving me to wonder whether I was being ignored. In the meantime you were getting more and more stressed. Someone came from Atom to do a new valuation and, with property prices reported to be on the way down in many areas of the UK, you feared the worst.
Then Atom got its act together and did an about turn, saying it would honour the mortgage after all. A spokesman said he had missed my emails due to “high volumes of spam”.
Although Atom had revalued your house it said it was prepared to discard this valuation and go with the old one. It said cases like yours were “rare”, as most applications complete well before valuations expire.
Once it was made aware of the situation (before my involvement), it said it asked the valuer if they were willing to extend to meet completion. This is at their discretion and is often approved, Atom said, however given the shift in the property market recently, they felt a re-valuation would be sensible.
It said having an accurate valuation is important for all parties, but particularly for the customer, who may choose not to proceed with a purchase in the knowledge of how the market has affected the property’s value.
However, despite having done another valuation, it is now refusing to say how much it came in at because it has been discarded. Nevertheless, you are extremely relieved that your purchase is back on track, and all going well, you will get the keys today. I hope you’ll be happy in your new home for many years to come.
An Atom Bank spokesman said: “We appreciate that this would have been a frustrating experience when buying a first home, so we’re firstly sorry that our customer found themselves in this situation.
“While we don’t make customers aware of the valuation expiry date, our online criteria for brokers does clearly state the validity period, so the broker should always be aware before submitting the application. We also advise of the expiry date when the valuation is received, to make them aware of the final deadline.
“When we had the results of the re-inspection, we acted immediately and agreed to proceed using the original valuation, in the knowledge that legal exchange had taken place and the customer risked losing their deposit. We are fully appreciative of the implications of a collapse in the chain, so are delighted that this application is now ready for completion.”
Following “feedback” from its brokers and customers, Atom has also increased the validity of property valuations by 30 days, from 150 to 180 days. It hopes this will stop situations like yours happening in future.