Down Valuations.
What Is a Property Valuation?
A property valuation is a survey carried out to determine the value of a property.
This process is typically arranged by the lender, such as a bank or building society, when you apply for a mortgage.
The valuation helps the lender decide whether the property meets their lending criteria and whether they are prepared to lend against it.
Understanding how valuations work can help buyers and sellers better prepare for potential issues during the mortgage application process.
Who Conducts the Valuation?
Property valuations are usually carried out by qualified professionals appointed by the lender.
Chartered Surveyors
Chartered Surveyors are experts in property values, construction and condition assessments.
They provide independent opinions on the property's value.
Approved Firms
Many lenders use trusted surveying firms and specialist valuation companies that regularly carry out mortgage valuations on their behalf.
These firms follow strict industry standards and lender requirements.
What Is the Purpose of the Valuation?
The valuation is primarily carried out for the benefit of the lender, not the buyer or seller.
The lender uses the valuation to:
Confirm the property's market value.
Assess lending risk.
Identify any issues that could affect the property's suitability as mortgage security.
Determine whether any special lending conditions may be required.
Valuers will typically consider:
Property value
Property condition
Property location
Local market conditions
The valuation provides the lender with an independent assessment before making a lending decision.
What Happens After the Valuation?
Following the valuation, the lender will review the findings and decide how to proceed.
Mortgage Approved
In many cases, the lender is satisfied with the valuation and issues a mortgage offer.
This is normally confirmed through a formal offer letter.
Mortgage Concerns
If concerns are identified, the lender may:
Reduce the amount they are willing to lend.
Request additional information.
Impose lending conditions.
Decline the mortgage application altogether.
Examples of concerns may include:
Poor property condition
Structural defects
Flood risks
Commercial premises nearby
Location-specific issues
Can You Arrange Your Own Valuation?
Yes.
You are not restricted to the lender's valuation alone.
Independent Survey
Many buyers choose to arrange their own survey for additional peace of mind.
This can provide a more detailed assessment of the property's condition and value.
Request a Review
If you disagree with the lender's valuation, you can ask the lender to review the decision.
In some cases, additional information may support a revised valuation.
Obtain a Second Valuation
A second valuation from another qualified surveyor may provide a different opinion.
Property valuation is not always an exact science and opinions can vary between professionals.
Reasons for a Down Valuation
A down valuation occurs when the lender values the property at less than the agreed purchase price.
There are several reasons why this can happen.
Property Condition
Structural issues, maintenance concerns or visible defects may reduce the valuation.
Location
Factors such as flood risk, high-risk areas or local environmental concerns may impact value.
Comparable Sales Evidence
Recent sales of similar nearby properties can influence the valuation outcome.
Economic Conditions
Changes in the wider property market or economy can affect property values.
Solution Focused
When a down valuation occurs, everyone involved often has their own opinion.
The buyer may feel they are paying too much.
The homeowner may believe the agreed sale price is fair.
The lender's valuer and Bayzos valuers may both feel confident in their respective assessments.
Because of this, it is important for all parties to work together and focus on finding a practical solution rather than assigning blame.
Maintaining open communication throughout the process often produces the best outcome for everyone involved.
Options if You Receive a Down Valuation
Bayzos Research
At Bayzos, our valuers follow a consistent and detailed valuation process designed to provide accurate property assessments.
We align our methods with RICS standards and spend significant time researching each property following the valuation.
This includes analysing:
Comparable sold properties
Property floor areas
Local market evidence
Unsold listings on portals such as Rightmove
This research helps provide confidence in our valuation figures.
We do not overvalue properties simply to win instructions. Instead, we focus on providing honest and reliable valuations based on available evidence.
If you would like to review our research on a down-valued property, simply send us a copy of the valuation you have received and we will share our findings.
Request a Review of the Valuation
Ask your lender to review the original valuation.
Additional information may help support a revised decision, particularly if there has been a misunderstanding regarding the property, comparable evidence or local market conditions.
Obtain a Second Valuation
Arrange a valuation from an independent RICS-accredited surveyor.
Property values can sometimes be subjective and a second opinion may differ significantly from the original valuation.
Negotiate the Sale Price
A down valuation can provide a basis for discussing the agreed purchase price with the seller.
Before entering negotiations, consider all available evidence to ensure discussions remain balanced and constructive.
You should avoid appearing opportunistic and instead focus on reaching a fair outcome based on the available valuation evidence.
Decide Whether to Proceed or Withdraw
If negotiations do not result in a revised sale price, the buyer may need to decide whether to:
Proceed at the original agreed price.
Increase their deposit contribution.
Withdraw from the purchase.
By this stage, the decision should be informed by the evidence available and the buyer's personal circumstances.
Quick Tips
Communicate Clearly
Always keep the estate agent informed about the down valuation and any actions you intend to take.
Clear communication helps keep all parties aligned and can often speed up resolution.
Understand That Valuations Differ
Property valuations can vary between surveyors and lenders.
A difference in opinion does not necessarily mean one valuation is wrong.
Consider Off-Market Premiums
If you purchased the property through the Bayzos Exclusive Buyer Group, be aware that a slight premium may have been offered to secure the property before it reached the open market.
This can sometimes influence how a lender views the property's value compared with the agreed sale price.
Actions to Complete
Buyer
Inform Bayzos of the down valuation.
Request a valuation review from the lender.
Consider obtaining a second valuation.
Negotiate the sale price if appropriate.
Work towards a resolution.
Update Milestones
Once the issue has been resolved:
Mark the milestone as complete within your portal.
Notify everyone involved in the transaction.
Update your checklist.
Keeping milestones updated ensures all parties remain informed throughout the process.
Final Message From Gary
A property valuation is an essential part of the home-buying process.
Typically carried out by a Chartered Surveyor, it helps lenders determine whether a property meets their lending criteria and provides an independent assessment of value.
Occasionally, a property may be down-valued, meaning the lender believes the property is worth less than the agreed purchase price. This can happen due to structural concerns, location issues, comparable sales evidence or changing market conditions.
If a down valuation occurs, buyers have several options available, including reviewing the valuation evidence, obtaining a second opinion, negotiating with the seller or deciding whether to proceed with the purchase.
By staying informed, communicating openly and considering all available evidence, buyers and sellers can work together to overcome valuation challenges and move forward with confidence.
Have ideas on how we can improve this guide?
Please share them with us at gary@bayzos.co.uk.
Gary (Founder) & The Bayzos Team
Disclaimer:
The information in this guide is provided for general information purposes only and does not constitute legal, financial, mortgage, tax, or professional advice.
While we aim to keep the information accurate and up to date, Bayzos Estate Agents Limited makes no guarantees or warranties regarding its accuracy or completeness.
You should always seek advice from a qualified solicitor, financial adviser, mortgage broker, accountant, or other relevant professional before making any decisions based on this information.
Bayzos Estate Agents Limited accepts no liability for any loss or damage arising from reliance on this guide.
