This could be classed as possibly the most crucial part of your application process, but what happens if an undervaluation of the property occurs?

First of all, a mortgage lender valuation is based on the following:

  • Completed sales on a similar property in the immediate area
  • The condition of the property you are buying


The mortgage lender needs to protect the money they are lending to you, and check that the money they are loaning to you is in alignment with the property value based on these two factors.

What happens if the property has been overvalued?

It’s a real pro for you to know whether the property you are buying has been overvalued, after all you do not want to be overpaying for a property you intend to purchase!

How does an undervaluation affect your mortgage?

A “down valuation” can affect the amount of money you can borrow against the property. As an example:
If the property you want to buy is at £250,000 and you have a deposit of 10%, so £25,0000, but the lenders mortgage valuation is £200,000 you can only borrow 90% of the property’s so £180,000. With the original deposit of £25,000 you will have £45,000 less than what you need to buy the property you desire.

What can you do if the property you want to buy has been given an undervaluation?

Don’t give up!

Let’s look at the following options:

  1. Is there a way you can raise or borrow the remaining fund required? Consider your budget do not overpay for a property and put yourself at financial risk just because you have fallen in love with it!
  2. Try renegotiating the price with the seller. Talk to the estate agent or vendor.
  3. Appeal the valuation. If there was insufficient evidence of property’s that were similar sold in the area at the time of your valuation you would try and work with the estate agent to provide examples to the mortgage lender
  4. Switching lenders is more of an extreme solution, and there is no guarantee that it will work, but a different lender may take a different view on the valuation
  5. CONTACT US! Our advice is free, and we are committed to try and work out the best solution for you!

Are you looking for a mortgage?
Get in touch to see how we can help

“The guidance and/or advice contained within this website is subject to the UK regulatory regime and is therefore primarily targeted at consumers based in the UK.”

Most Buy-to-Let mortgages are not regulated by the Financial Conduct Authority
Registered address: 4 Digswell Park Cottages, Digswell Park Road, Welwyn Garden City, AL8 7NN
Partners – Roger Phillips & Neil Leonard.


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