Question 1

What is a mortgage valuation?

Accepted Answer

A mortgage valuation is an assessment carried out on behalf of the lender to confirm that the property you are buying (or remortgaging) provides adequate security for the loan. It is not a survey for the buyer's benefit — it is a risk assessment for the lender. The valuer checks that the property exists, is broadly as described, and is worth at least the amount the lender is being asked to lend against. The mortgage valuation may be a physical inspection or, increasingly, an automated desktop valuation (AVM) or drive-by assessment. The lender uses the valuation to set the loan-to-value (LTV) ratio, which in turn determines the interest rate tier and whether the application meets their lending criteria. The mortgage valuation is typically the first thing the lender arranges after the full application is submitted.

Question 2

What types of property survey are available?

Accepted Answer

There are three main levels of property survey. The mortgage valuation (sometimes called a basic valuation) is the lender's assessment of security value — it does not check the condition of the property in detail and is not designed to protect the buyer. A Homebuyer Report (RICS Home Survey Level 2) is a more detailed inspection covering the condition of visible and accessible elements of the property, including the roof, walls, windows, damp, and services, with a market valuation included. It highlights defects but does not investigate concealed areas. A Full Structural Survey (RICS Home Survey Level 3) is the most comprehensive option — a detailed investigation of the property's construction and condition, suitable for older, unusual, or potentially problematic buildings. It does not include a valuation unless specifically requested. The choice of survey is the buyer's decision and cost. The mortgage valuation is mandatory for the lender; the other surveys are optional but strongly recommended.

Question 3

What happens if the mortgage valuation is lower than the purchase price?

Accepted Answer

If the valuation comes in below the agreed purchase price — known as a down valuation — the lender will only lend based on the lower valuation figure. This creates a shortfall that the buyer must cover. For example, if you agreed to buy at £300,000 with a 90% mortgage (£270,000 loan), but the valuation comes back at £280,000, the lender will offer 90% of £280,000 = £252,000. You would need to find an additional £18,000 to cover the gap between the £252,000 loan and the £300,000 purchase price — on top of your original deposit. Options in a down valuation scenario include: renegotiating the purchase price with the vendor; increasing your deposit to cover the shortfall; asking the lender to reconsider (providing comparable sales evidence); instructing a second valuation with a different lender; or, as a last resort, withdrawing from the purchase.

Question 4

Can I challenge a down valuation?

Accepted Answer

Yes. If you believe the valuation is inaccurate, you can ask the lender to review it. To support your case, provide evidence of comparable recent sales in the area at or above the purchase price — ideally three or more sold prices from the Land Registry for similar properties within the last three to six months. Some lenders will instruct a second valuation (sometimes called a re-inspection) either at no additional cost or for a small fee. Alternatively, you can apply to a different lender whose panel valuer may assess the property differently. Your broker can advise which approach is most likely to succeed based on the valuer's specific concerns. It is worth noting that valuers are independent professionals and lenders are not obliged to overturn their assessment — a challenge is a request, not a guarantee.

Question 5

Who pays for the mortgage valuation?

Accepted Answer

The buyer pays for the mortgage valuation, either directly or as part of the lender's arrangement fee. Many lenders include a free basic valuation as part of their mortgage product — this is particularly common on higher-value products or as a competitive incentive. Where the valuation is not included, the cost depends on the property's value: typically £150–£300 for properties up to £500,000, rising for higher-value properties. If you choose to commission a Homebuyer Report or Full Structural Survey, these are separate costs paid by the buyer, typically ranging from £400–£600 for a Level 2 survey and £600–£1,500+ for a Level 3 survey, depending on property size and location. The mortgage valuation fee is usually payable upfront at the point of full application and is not refundable if the application does not proceed.

Question 6

What issues can cause a property to fail a mortgage valuation?

Accepted Answer

The valuer assesses both value and suitability as mortgage security. Issues that can cause a property to fail or receive a retention include: structural problems (subsidence, significant cracking, movement); a short remaining lease (below 70–80 years for flats); Japanese knotweed or other invasive species within the boundary; non-standard construction (e.g., concrete prefab, steel frame, timber frame without certification); lack of building regulations sign-off for extensions or conversions; proximity to commercial premises, electricity pylons, or flood zones; and evidence of significant damp, asbestos, or roof defects. The valuer may also flag issues that, while not preventing a mortgage, require further investigation — for example, recommending an electrical or drainage report. For unusual properties (listed buildings, thatched roofs, converted barns), fewer lenders will accept the security, and the valuation process may take longer.

Mortgage Valuation FAQ