Mortgage brokers are reporting a growing trend of valuers placing much lower price tags on properties than their true market worth — a practice many in the industry have described as “atrocious.”
They claim that, in the current climate where property prices are largely stagnant, valuers have become excessively cautious in their assessments. The main purpose of a mortgage valuation is to confirm that the property meets the lender’s requirements and is worth the amount the buyer has agreed to pay.
In many cases, valuers do not carry out a full inspection of the property. Instead, they may conduct only a quick drive-by assessment or rely solely on online research.
Their valuations are typically based on the sale prices of comparable properties in the local area.
These so-called “down valuations” can create significant problems. They may lead to lenders rejecting a mortgage application outright, or force buyers and sellers back to the negotiating table to agree on a lower price. In some cases, buyers may be left needing to secure additional funds to make up the shortfall.
Adam Stiles, managing director at London-based mortgage broker Helix Financial Partners, revealed that three of his recent clients had properties down-valued by over £1 million.
He described the situation as “atrocious”, citing one example where a valuer assessed two completed new-build homes at £1.7 million. When the deal was taken to a different lender, their appointed valuer returned a figure of £2.8 million just two weeks later — a staggering £1.1 million difference.
In another case, a prime London freehold home expected to fetch £3 million was valued at just £1.4 million, despite previous valuations matching the borrower’s original estimate.
Jack Tutton, director at Fareham-based broker SJ Mortgages, has also noticed a significant rise in down valuations. He recalled one instance where a property valued at £250,000 in March was revalued at £225,000 in June.
He questioned the logic, pointing out that a 10% market drop in such a short space of time would have caused widespread financial trouble — something that hasn’t happened. While he acknowledged that estate agents and sellers may sometimes overestimate property values, he believes valuers are now erring too far on the side of caution due to the stagnant market.
Property developer Kundan Bhaduri, of The Kushman Group in Kent, estimates that half of his transactions involve down valuations. For properties he typically develops under £500,000, he claims the process has become like “Russian roulette.”
In the South East, he says, average down valuations are knocking around £11,000 off agreed prices. Last month, a two-bedroom terrace in Ashford agreed at £325,000 was valued at £290,000 by the lender’s surveyor, who cited “market uncertainty” — even though three identical nearby homes had recently sold for higher amounts.
Bhaduri accused valuers of protecting themselves from potential future claims on their professional indemnity insurance at the expense of buyers, sellers, and developers.
He argues the current system leaves surveyors unaccountable, while everyone else in the property chain bears the risk.
Why are down valuations a problem?
Mortgage valuations are increasingly proving problematic for buyers, sellers, and even those looking to remortgage.
If a buyer is told that the property is worth less than the agreed purchase price, they may need to negotiate with the seller for a price reduction to keep the deal moving.
When a seller refuses to lower the price, the buyer faces a funding gap between the mortgage amount the lender is willing to provide and the seller’s asking price.
For example, if someone agrees to buy a home for £400,000 with a 90% mortgage (£360,000) and a £40,000 deposit, but the lender values the property at £360,000, the calculation changes.
The lender will only offer 90% of £360,000, which is £324,000. This means the buyer must decide whether to find an extra £36,000 on top of their deposit to bridge the shortfall.
Ken James, director of London-based Contractor Mortgage Services, says that down valuations are becoming a major challenge, particularly for estate agents.
“We’re seeing a growing number of properties being down valued, and it’s creating significant difficulties for everyone in the process,” he explained.
Estate agents, he added, often resist renegotiations and may encourage buyers to approach another lender in the hope of securing a higher valuation.
However, this strategy doesn’t always deliver results, and once a lender has issued a lower valuation, buyers may begin to doubt whether the property is worth the agreed price in the first place.
In some instances, this can even prompt buyers to reconsider proceeding with the purchase at all.
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