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, you have to cover the gap in cash.

After you agree a price with the seller, 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.

What it costs you

The lender lends a percentage of their valuation, whatever price you agreed. 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. You then need to find £18,000 more in cash, renegotiate, or walk away.

Why it happens

Usually the agreed price has run ahead of what comparable sales support. Agents price to the top of the market, and in a bidding war buyers pay what the place is worth to them. The surveyor looks only at the comparables.

What to do

• Know the risk before you offer. If the asking price is well above comparable sales, a down-valuation is likely, and the Nestfair report flags this.
• Agree upfront who moves if it happens: you renegotiating down, or the seller accepting less.
• Keep some spare cash 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