What a down-valuation is
Before a lender releases a mortgage, it gets its own valuation of the home. That figure is there to protect the lender, not you. If it comes back below the price you agreed, the lender works out the loan from the lower number. That leaves a gap between what you planned to borrow and what you now need.
A mortgage valuation isn’t a survey. It can be done largely from desk data, and it says little about the building’s condition. It isn’t a verdict on the price you should pay, either.
Why it happens
Valuers work from completed sales, not asking prices. They often confirm the price you’ve agreed, but less often when it sits well above what comparable homes nearby sold for. The usual causes:
- The asking price was set above what comparable homes sold for, and the offer followed it.
- Prices nearby have softened since the sales the agent pointed to.
- A competitive round pushed the price past the sales.
- The valuer noted something about the home itself, such as a short lease or an unusual construction.
Your four options
| Option | What it involves | What it costs you |
|---|---|---|
| Go back to the seller | Ask the seller to meet the valuation, or part of the gap, with the sales behind you. | Time, and some risk the seller says no. |
| Cover the gap | Put in a bigger deposit so the loan fits the lender’s figure. | Savings, and paying more than the lender’s valuer supports. |
| Try another lender | A new application brings a new valuation, which may or may not differ. | Fees and weeks. A similar result is common. |
| Pull out | In England, either side can walk away before contracts are exchanged. | What you’ve already spent on surveys, searches and legal work. |
Which route fits depends on your finances and the lender’s terms. A mortgage broker can tell you what each one means for your application.
The shortfall maths
The loan is a percentage of the lower of the price and the valuation, so nearly all of the shortfall lands on you. At 90% loan-to-value, a £400,000 purchase valued at £380,000 needs £18,000 more deposit: nine-tenths of the £20,000 gap.
How a lower valuation becomes a bigger deposit.
A valuation £20,000 lower means £18,000 more deposit. The loan shrinks with the valuation, but the price stays where it was.
Not offered yet? You can see where your price sits before a valuer does. See it against the sales
Going back to the seller
The next conversation is with the seller, not the lender, and it goes better with sales on the table. A strong case rests on three things:
- Comparable sales. Recent sales of homes like yours nearby, each with its Land Registry price and date.
- Where your price sits. Inside the range those sales cover, at the top of it or above it.
- What the next buyer faces. Any buyer with a mortgage may get a valuation like yours. The seller will weigh that against starting again.
The question isn’t whether the valuer was right. It’s what comparable homes have actually sold for.
Put like this, the talk is about where your price sits among those sales. Common proposals are meeting the valuation or splitting the difference, with the sales making the argument.
When the sales support your price
Sometimes the sales do support the price you agreed, and the valuation is simply cautious. Then a renegotiation is harder to argue. The realistic routes are covering the gap or trying another lender. Some lenders will look again if a broker sends sales the valuer didn’t use. Knowing which case you’re in comes first.
Before you offer: see the gap coming
The easiest down-valuation to handle is the one you saw coming. Before you offer, check your price against what comparable homes nearby have sold for. If your offer sits above what they sold for, ask your broker what they’d lend if the valuation came in lower. Then use the calculator above to work out the cash you’d need.
Questions
Can I ask the lender to change the valuation?
Lenders rarely change a valuation. Some will review one if they’re shown comparable sales the valuer didn’t consider. A mortgage broker can tell you whether your lender does, and how to ask.
Does a down-valuation mean I’m overpaying?
Not always. A valuation is a cautious figure set to protect the lender. Sales of comparable homes show whether your price sits inside, above or below what those homes actually sold for.
Will the seller agree to lower the price?
Some do and some don’t. It helps that any other buyer with a mortgage may get a similar valuation, and that your case rests on registered sales, not opinion.
Can I pull out after a down-valuation?
Yes. In England either side can withdraw before contracts are exchanged. Money already spent on surveys, searches and legal work isn’t normally recovered.
Is a mortgage valuation the same as a survey?
No. A mortgage valuation is for the lender and can be done largely from desk data. It says little about the condition of the building. A survey is one you commission, and it inspects the property.