When you apply for a mortgage, the lender doesn't just look at your income. They also check the property you want to buy.
That check is called a valuation, and it helps the lender confirm the home is worth what you've agreed to pay.
It's one of the quietest parts of the home-buying process, but when things go wrong, it's usually here.
Below is a clear, practical guide to what valuations are, how they're done, why they sometimes come back lower than expected, and what you can do if that happens.
What a Mortgage Valuation Actually Is
A mortgage valuation is the lender’s way of confirming the property is worth the amount you’re borrowing. It’s for their risk assessment, not your peace of mind.
Its purpose is:
- Confirm the property is suitable security for the loan
- Check the price is reasonable for the local market
- Flag obvious issues that could affect value or resale
Unlike a survey, it won't tell you if the roof needs replacing or the wiring is ancient. It's a risk check, not a condition report.
The Different Types of Valuations
1. Automated Valuation Model (AVM)
This is a computer-based valuation. No one visits the property.
It uses:
- Recent local sales
- Property size and type
- Historical price trends
- Big-data risk modelling
Why lenders use it:
- Fast (often instant)
- Cheap
- Good for standard properties with lots of comparable sales
When it's used:
- Flats and houses in areas with strong sales data
- Low loan-to-value applications
- Straightforward residential purchases
Limitation:
AVMs struggle with unusual homes, rural locations, refurb projects, and anything with limited comparables.
2. Desktop Valuation
A human valuer checks the property remotely using:
- Online property data
- Floor plans
- Photographs
- Comparable sales
- Local market reports
Used when an AVM isn't strong enough, but a full inspection isn't necessary.
3. Physical (In-Person) Valuation
A surveyor visits the home for a quick on-site review, often 10–20 minutes, focusing on condition, layout, and anything that could affect resale value.
They check:
- Overall condition
- Structural risks (e.g., cracking, damp, roof condition)
- Extensions or alterations
- Construction type (e.g., concrete, timber-frame, non-standard)
- Local market comparables
Used when:
- The property is older or unusual
- Higher loan-to-value
- Data on the area is thin
- The lender needs extra certainty
What Can Cause a Low Valuation?
A valuation can come back lower than your offer ("down valuation"). Common reasons:
- The offer price is above recent comparable sales
- The valuer can't find suitable evidence to support the price
- The property needs work or has visible defects
- Market conditions are cooling
- Non-standard construction
- Seller has accepted your offer quickly at an inflated asking price
Down valuations are more common in:
- Fast-moving markets
- Rural areas
- Unique or highly-tweaked homes
- Properties with extensions or loft conversions lacking paperwork
What Happens If the Valuation Is Lower Than Your Offer?
You have a few options:
1. Renegotiate the price
Most buyers start here.
Reason: sellers know another buyer's lender will likely reach the same conclusion.
2. Increase your deposit
Bridging the gap is possible, but not always wise. There's a reason why the bank capped the valuation.
3. Try another lender
Different lenders use different valuation panels and policies.
A second opinion can sometimes come back higher — but there are no guarantees.
4. Walk away
If the numbers don't stack up, stepping back is a legitimate outcome.
Do You Get a Copy of the Valuation?
Not usually.
A mortgage valuation is commissioned for the lender, so what you receive is limited. Most buyers only get:
- A yes/no lending decision
- Any major issues that influenced the valuation
- The final figure, if it came in lower than expected
You won't receive a condition report or a detailed breakdown of the property's state, because the valuation isn't designed for that.
If you want a proper look at the home's structure, safety, and potential problems, you'd need a HomeBuyer Report or a Full Building Survey.
Do You Need an Inspection?
If you want more than a lender's risk check, the answer is usually yes. A survey gives you an unbiased view of the home you're about to commit to.
You can use UK Property Looker to compare quotes from local surveyors and find someone who fits your timeline and budget.
Who Pays for the Valuation?
It depends on the lender:
- Many offer free valuations for residential purchases
- Some charge a fee (typically £150–£500 depending on value and property type)
- Remortgage valuations are often free
How to Reduce the Risk of a Down Valuation
- Look at recent, local sold prices, not asking prices
- Be realistic in bidding wars
- Flag major refurb work in your mortgage application
- Ask the agent for comparable sales evidence
- Speak to a mortgage adviser early, they know which lenders rely heavily on AVMs and which don't
Final Thoughts
A valuation won't make or break your home move, but it can delay it. Understanding how lenders assess property value helps you navigate bumps in the road with less stress.
If you hit a low valuation, don't panic. It's more common than people realise, and a good mortgage adviser can guide you through your options before you decide what to do next.