A mortgage valuation is ordered by your lender as a way of assessing whether your property, if purchased or remortgaged, is worth the value of the loan. The report is issued to the lender, who will then note the result, and the vast majority of the time you will never see a copy.
It is also not a survey of the condition of the property, and thinking that it is can be an expensive mistake.
John D Wood & Co. has been guiding clients through this process since 1872 and here is everything you need to know about a mortgage valuation.
How does a mortgage valuation work?
As soon as your mortgage application is submitted, the lender instructs a valuation. You are not allowed to choose the surveyor or the method and the lender makes that decision based on the type of property, its location, and how much data is already available.
Three methods of property valuation are currently in widespread use:
- A physical visit: A RICS-qualified valuer arrives at the property and spends somewhere between 15 and 30 minutes taking notes on any visible defects and comparing the house to recent sales in the area.
- A desktop assessment: The valuer uses Land Registry records, recent sale prices of similar properties, satellite imagery, and their own local knowledge of the area. No one steps into the property.
- An automated valuation model (AVM): The lender's system runs algorithms across sales databases and can generate a figure within minutes. This technique produces results quickly, but it works best for straightforward, well-documented properties.
What the valuer is really doing is estimating the market value of the property so that your lender can determine your loan-to-value ratio. Your LTV affects what mortgage rate and product you will be offered, so this one number has more downstream ramifications than most homebuyers realise.
At what stage is a mortgage valuation done?
The valuation is instructed after your application has been submitted and initial screening checks have gone through. Most lenders instruct this within one to two weeks of your application.
It is generally a positive sign if you see a valuation get instructed as it indicates the lender has not hit an apparent issue with your application and wants to move on to the property stage. However, it is not an approval. Consider it one of the checkpoints and there are several other checks such as employment screening, affordability calculations, and other underwriting processes to be undertaken before a formal mortgage offer is made.
Our
guide to buying a home lays out each stage from offer through to completion if you want the full timeline.
Is a mortgage valuation the same as a survey?
No, and getting it wrong can be expensive.
A mortgage valuation answers the lender's question: is this property worth what we are lending against it? It will be commissioned by the lender, is owned by the lender, and may be obtained without anyone setting foot inside the building.
A house survey answers the buyer's question: what is the condition of this property? It can be commissioned by you, you will own the report, and a professional surveyor will identify everything from damp and subsidence to faulty wiring and roof problems. The Royal Institution of Chartered Surveyors offers three levels: a basic condition report (Level 1), a homebuyer report with or without valuation (Level 2), and a full building survey for older or complex properties (Level 3).
Our advice is simple, always get your own survey. The mortgage valuation is for the lender's protection. A survey is for yours. The two are not interchangeable, and relying on one when you need the other is how people end up discovering a £40,000 damp problem three months after moving in.
How much does a mortgage valuation cost?
Some lenders include a free valuation with the mortgage deal. Others charge, and fees can range from £100 to £1,500 depending on the value of the property.
One thing to remember is that the free valuation may sound tempting, but a competing deal with a lower interest rate will almost certainly save you more over the term of the mortgage. Do not choose a product just because it has a free valuation.
You pay the fee, but the report belongs to the lender. You may not see it, and even if you do, it will not tell you anything meaningful about the condition of the property, that is the survey's job.
What happens after a mortgage valuation?
If all is well and your mortgage application is clear, the mortgage offer will typically be issued within five working days to two weeks of the valuation. Then it is all systems go towards exchange and completion.
The valuation report by itself does not guarantee that the mortgage is approved. The lender still has to verify your income, check your employment status, and satisfy certain underwriting criteria. If anything changes with your situation between the moment of application and the valuation the lender can withdraw even if the property is valued to their satisfaction.
Most valuation reports are valid for a period of six months. If your purchase takes longer than that, you will need a new valuation.
What happens if the valuation is lower than the offer price?
A down valuation like this causes real headaches, and they are more common than you might expect. If the valuer puts a figure on the property that is less than the price you have negotiated, the lender will base their offer on the lower figure. Your loan-to-value shifts, the amount borrowed decreases, and you may find yourself with a funding gap.
Here is a concrete example. You have offered £350,000, have a £35,000 deposit, and need a 90% LTV mortgage of £315,000. The valuation comes in at £300,000. The lender will now offer 90% of £300,000 - which is £270,000. When you add your deposit, you have £305,000 available. That is £45,000 short of the agreed price.
What can you do?
- Feed back to the seller: They may be prepared to reduce the price if they understand that any buyer they encounter will likely arrive at a similar valuation.
- Challenge the valuation: Some lenders have formal procedures for this, though it does not always prove productive.
- Make up the shortfall yourself: Draw on additional savings or support from family.
- Try another lender: Use a different surveyor. The result may differ, or it may not.
Can a mortgage be declined after valuation?
Yes. The valuation will often reveal problems that result in the lender being unwilling to lend against the property. Common issues that can trigger this include:
- Subsidence or structural movement: Cracking in walls, sloping floors, evidence of ground shift
- Non-standard construction: Pre-fabricated concrete or unusual building materials that some lenders will not accept as security
- Cladding concerns: Particularly for flats, where an External Wall System (EWS1) form may be requested to confirm fire safety compliance
- Spray foam insulation: Increasingly flagged because it conceals the condition of roof timbers and is extremely difficult to inspect without removal
- Damp or timber decay: The valuer may require a specialist contractor's report before the lender will consider proceeding
This does not necessarily mean the property is a poor purchase. It simply indicates that the lender considers it an increased risk for their criteria. You may still be able to proceed with a different lender, or by addressing the specific concern first.
Frequently asked questions
Is a mortgage valuation a good sign?
It can be seen as a positive, but it is the first step rather than the finish line. The lender has sanctioned your application through initial checks and wants to assess the property. There are still a few more stages to clear.
Do I need to clean my house for a valuation?
If your house is expecting a visitor, make sure access is clear so the valuer can reach the loft, any outbuildings, and all rooms. You are not expected to redecorate, but a property that cannot be easily walked through will not make the valuer's task any easier.
How long after valuation do you get an offer?
On average five working days to two weeks. If the valuation on a standard property is straightforward, it will usually be the former.
Can I choose who values my property?
No. The lender selects the valuer, usually through a panel manager. You have no say in who carries out the assessment.
Thinking of selling or remortgaging?
If you are weighing up a sale or a remortgage, the starting point is the same: knowing what your property is actually worth in the current market. John D Wood & Co. has been delivering
expert property valuations across London and the South East for over 150 years, and we are not in the business of telling you what you want to hear. We will give you an honest, well-informed figure rooted in local knowledge and real market data.
Request a valuation to speak with one of our local property experts. You can also explore our
mortgage and protection services for help with the next steps.
