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A down valuation is when the lender’s valuer decides the property is worth less than the price you agreed. The lender then bases the mortgage on the lower figure, not your offer price. Your loan shrinks, your loan to value goes up, and the gap has to come from somewhere: a bigger deposit, a lower price from the seller, or a different lender’s valuer. Those are the three routes, and most cases end up on one of them. If you want to know what the valuer was looking at before they reached that figure, I have covered what a mortgage valuation surveyor checks separately.
The lender lends a percentage of its own valuation, not of the price you agreed. It does not care about the gap.
A second lender means a second valuer, and valuers do not always agree. It is not guaranteed to come back higher.
An appeal needs evidence: three or so sold prices for similar properties nearby in the last six months.
Why does a down valuation happen?
The valuer is working for the lender, not for you. Their job is to say what the property would sell for if the lender ever had to repossess it. They look at recent sold prices for similar properties nearby, the condition, and anything that would put off a future buyer.
Down valuations get more common when prices are moving. If asking prices in an area have run ahead of what similar homes actually sold for in the last few months, the valuer will not follow the asking price up. Sealed bids and competitive offers are a frequent cause: the winning bid can be above anything the comparables support.
How does a down valuation change the mortgage?
Say you agreed £300,000 with a 10% deposit of £30,000, so the loan was going to be £270,000 at 90% loan to value. The valuer comes back at £285,000. The lender will now lend 90% of £285,000, which is £256,500. You are £13,500 short.
The lender will lend a percentage of its own valuation and nothing more. It can also mean you move up a loan to value band, which changes which products are available to you. On a remortgage the same thing happens: if you were hoping to release equity, the amount available falls.
What are the three ways to deal with a down valuation?
Find more deposit. If you can cover the gap from savings or family, the purchase proceeds at the agreed price and the lender is satisfied. Whether that is a good idea depends on whether you believe the valuer or the seller.
Renegotiate the price. The seller now knows a professional valuer has said the property is worth less. Some sellers will meet you at or near the valuation, because the next buyer’s lender is likely to say the same thing. Some will not.
Try a different lender. Each lender instructs its own valuer, and valuers do not always agree. A second valuation is not guaranteed to be higher, and it costs time and possibly a fee, so it is worth doing when there is a clear reason to believe the first valuer missed something.
You can also challenge the valuation with the same lender. This works when you can show comparable sold prices the valuer did not use. It rarely works on the strength of an opinion that the figure feels low. Treat an appeal as one option rather than the plan.
Speak to an expert
If your purchase has just been down valued, message me on WhatsApp with the figures and I will run the three options for you the same day.
What I see in practice
Down valuations have been frequent this year, on ordinary homes as well as buy to lets. My experience is that appeals to the surveyor rarely work, so I do not build a plan around one. The route that does work is to take the case to a lender that will instruct its own valuation, which gives you a second independent figure. If that comes back the same, the conversation moves to the seller and the price, and my clients have gone both ways from there: some found more deposit, more renegotiated. New build purchases are down valued more often than most, because there are fewer comparable sales and incentives can inflate the headline price. There is a separate post on new build down valuations. For the difference between the lender’s valuation and a survey you commission, see valuation vs survey, and for the wider process the first time buyer hub.
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