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Can mortgage offers be withdrawn between exchange and completion?

An alarming story has appeared in the mortgage trade press, highlighting an apparent pitfall in the house buying process that has arisen in recent months.

The Financial Reporter website carries a story of a young Reading family facing a bill of at least £33,000 plus damages following the collapse of their housing chain after exchange of contracts. 

It says: “Abdus Saboor and his wife were left devastated when, in the period between exchange and completion, their buyer was told by lender Santander that their mortgage offer was being withdrawn.


“The fact that contracts had already been exchanged meant that all buyers were still obliged to pay their 10 per cent deposit to their respective sellers. 

“The Saboors were in the process of buying a £660,000 house, but were selling their own for £330,000 – so their deposit was of course double. They therefore faced the prospect of losing £33,000.”

Saboor is quoted in the piece saying: “The problems started due to the Covid situation, when my buyer’s lender Santander withdrew their mortgage offer on completion day – while we were loading the removal van! We were willing not to ask our buyer to pay their deposit, but our seller insisted on us still paying our deposit. This money is all our savings from the past seven years. Our account’s empty. We are devastated by this – we have an eight-month old baby.”

The implications here are plain and could affect purchases in the future if this develops into a trend. If lenders can withdraw an offer after contracts have been signed, every non-cash buyer in a chain is at risk.

Separately, Financial Reporter suggests the Butterfield Mortgages company has discovered as many as 30 per cent of buyers whose chains have collapsed in recent months, ended up losing their deposits as mortgage offers were withdrawn post-contract.

That would suggest this is not a one-off problem, and is one that could theoretically be made worse for the victims of the lenders if they have non-returnable deposits.

Financial Reporter sums it up this way: “It has been widely assumed by mortgage brokers and homebuyers alike that a mortgage deal in place at exchange cannot be withdrawn before completion. It appears in practice that this is not the case. This means that, for a period of between one and two weeks, all buyers in the chain are entirely at the mercy of every lender involved – any one of whom might theoretically pull out.”

Santander says this kind of incident happens in less than 0.1 per cent of cases and is not linked to the pandemic.

A spokesperson told Estate Agent Today last evening: “It is extremely rare for a mortgage offer to be withdrawn post-exchange, this would only be done in exceptional circumstances to comply with our legal and regulatory obligations, which extend beyond ensuring the mortgage is affordable. While we are deeply sorry for the distress caused to the parties in the chain, the decision to withdraw the offer was the correct one.”


  • Rob Hailstone

    Whilst not a great story, it is slightly reassuring that Santander have confirmed this kind of incident happens in less than 0.1 per cent of cases and is NOT linked to the pandemic.

  • Peter Ambrose

    Indeed - we have seen this in the past - it is nothing to do with the current climate.

    We've also seen mortgages be subject to review after exchange which is extremely stressful for clients.

    Just another example of how things are becoming so much more difficult when transacting properties and how external factors impact the speed and risks involved in conveyancing.

  • Simon Shinerock

    If it happens so rarely it should be insurable by the lenders at a nominal premium, the fact it only affects 0.1% of sales is cold comfort for the victims

  • Rob Hailstone

    The reason often Simon can be traced back to the buyer/borrower or another party having provided inaccurate or misleading information. However, in this case I have seen nothing at all to suggest that the Saboors or their advisors were guilty of anything like that.

    A more detailed explanation by Santander would be helpful.



  • girish mehta

    Mortgage company should pay all expenses and losses if the percentage is that low. Why should the buyer loose out

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  • Richard Rawlings

    Sounds like a great insurance opportunity here, given the worry that movers would experience if they hear of stories like this. But the insurers would also no doubt include a clause excluding liability in the event of whatever it was that caused the loan withdrawal in the first place! But how about insurance for anyone else in the chain innocently affected perhaps?

  • Rob Hailstone

    "Any suggestions on how to minimise the effect of this? I know some firms won’t exchange until the COT has been submitted and acknowledged that there is no problem.

    I have got an issue this week on a Barclays mortgage – something the broker was supposed to do, they did it, Barclays sat on it until I requested the COT and then decided that there was a mistake on the paperwork the broker had submitted re ILA and need it re-done, re-issue a mortgage offer and re-submit COT. Exchanged contracts, completion tomorrow !" BLG Member

  • Rob Hailstone

    "Does anyone have any ideas on extracting redemption figures from HSBC. We faxed on the 17th November to confirm that we had exchanged and were due to complete today (the 3rd December). Over the last week we have spent hours on thephone to them chasing the figure and everytime are told that it has been escalated and they cant say when it will be produced. We spent nearly 3 hours on tehphone yesterday and our client has also been phoning yesterday and this morning but they are still saying they dont know when it will be done. We have exchnaged so need an up to date figure today.

    We are at our wits end as to what else we can do and would be grateful for any suggestions." BLG Member

  • Rob Hailstone

    "The figure has arrived at 11.05 this morning. They tell us that they no longer produce figures in advance of the completion date, they only produce them on the day. Luckily ours is a sale only; How are we supposed to prepare if we cant have a figure (not even an indicative) in advance of completion?" BLG Member

    And some wonder why conveyancers are struggling more than ever right now.


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