Guide

Down-valuation: when the lender disagrees with the price

Your mortgage lender runs its own valuation. If it comes in below the price you agreed, the gap is yours to cover in cash.

You agree a price with the seller. Then your lender sends its own surveyor to value the place, because they're lending against it and want to know it's worth what you're paying. If that valuation comes in under your agreed price, you've been down-valued.

Why it stings

The lender lends a percentage of their valuation, not your agreed price. Say you agreed £300,000 with a 10% deposit, expecting to borrow £270,000. If the surveyor values it at £280,000, the lender only lends 90% of that, £252,000. Suddenly you need to find £18,000 more in cash, renegotiate, or walk.

Why it happens

Usually because the agreed price ran ahead of what comparable sales support. Agents price to the top of the market, and in a bidding war buyers pay for how much they want it, not what the comparables say. The surveyor only cares about the comparables.

What to do

• Know the risk before you offer. If the asking is well above comparable sales, a down-valuation is likely, and buyerside flags exactly this on the report.
• Agree upfront who moves if it happens: you renegotiating down, or the seller accepting less.
• Keep some cash headroom so a small gap doesn't collapse the whole purchase.
• If you're confident on the value, you can challenge it with your own comparable evidence, though lenders rarely shift far.

Check the official sources

• Buying and selling your home