Mortgage Valuation: What First-Time Buyers Need to Know

For many people buying their first home, the mortgage valuation first-time buyers encounter is one of the least understood parts of the process. It is often confused with a survey, or assumed to exist for the buyer’s benefit, when in reality it is carried out for the lender.

What Is a Mortgage Valuation?

A mortgage valuation is an assessment of a property’s value carried out on behalf of the lender. Its purpose is to confirm that the property provides adequate security for the mortgage loan.

In simple terms, the lender wants to know whether the property is worth at least the amount you have agreed to pay. If you fail to keep up with repayments, the lender needs confidence that the property could be sold to recover the outstanding balance.

This means the mortgage valuation first-time buyers receive is focused on risk and security, rather than highlighting defects or future maintenance issues.

Is a Mortgage Valuation the Same as a Survey?

No. This is one of the most common misunderstandings among first-time buyers.

A mortgage valuation is not a detailed inspection of the property’s condition. It is usually brief and focused on value rather than structural issues. Some valuations are even carried out using desktop data or automated models without a physical visit.

A survey, on the other hand, is designed to protect you as the buyer by identifying defects, maintenance issues, or risks that may not be obvious.

We explain the difference between lender checks and buyer checks in more detail in our guide on what mortgage lenders look for during the application process.

Why Do Lenders Require a Valuation?

Lenders require a valuation to manage risk. The amount they are willing to lend is directly linked to the value of the property, known as the loan-to-value ratio.

If a property is valued lower than expected, the lender may reduce the amount they are prepared to lend. This protects them from lending more than the property is worth.

When Does the Mortgage Valuation Happen?

The mortgage valuation usually takes place after you have submitted a full mortgage application and paid any valuation fee required by the lender.

Once instructed, the lender appoints a valuer, who may visit the property or carry out a desktop assessment. The results are then sent directly to the lender, not to you.

This stage often happens in parallel with other checks, such as affordability and bank statement reviews.

How Much Does a Mortgage Valuation Cost?

The cost of a mortgage valuation varies depending on the lender and the property price. In some cases, the valuation fee is included as part of a mortgage deal. In others, it is a separate charge.

It is important to understand that paying for a valuation does not guarantee mortgage approval. The valuation is just one part of the lender’s overall assessment.

What Is a Down Valuation?

A down valuation occurs when the lender’s valuation is lower than the price you have agreed to pay for the property.

This can be a shock for first-time buyers, especially in competitive markets. However, it is relatively common and does not necessarily mean the purchase has to fall through.

Why Do Properties Get Down Valued?

Properties may be down valued for several reasons, including:

• The agreed price being higher than recent comparable sales
• Market conditions changing
• Issues with the property type, condition, or construction
• Limited demand for similar properties in the area

How Does a Down Valuation Affect Your Mortgage?

If a property is down valued, the lender will usually base the mortgage offer on the lower valuation figure, not the purchase price.

This means you may need to:

• Increase your deposit to cover the difference
• Renegotiate the purchase price with the seller
• Change lender or mortgage product
• Walk away from the purchase

For first-time buyers with limited savings, a down valuation can be particularly challenging.

Can You Challenge a Mortgage Valuation?

In some cases, yes. A valuation can be challenged if there is strong evidence that the property is worth more than the valuer’s assessment.

This usually involves providing recent comparable sales data. However, lenders are cautious about overturning valuations, and challenges are not always successful.

Does Bad Credit Affect the Valuation?

No. Your credit history does not influence the property valuation itself. The valuer assesses the property, not your personal circumstances.

However, credit issues can affect the mortgage terms offered by the lender, which may limit your options if a down valuation occurs. We cover this in more detail in our guide on getting a mortgage with adverse credit.

Do All Lenders Use the Same Valuation?

No. Different lenders may use different valuation panels or models. This means one lender may value a property differently from another.

In some situations, changing lender can result in a different valuation outcome, though this is never guaranteed.

Should First-Time Buyers Get a Separate Survey?

In most cases, yes. While not mandatory, a separate survey provides reassurance about the condition of the property and highlights potential future costs.

This is particularly important for older properties, unusual construction types, or homes that have been heavily altered.

How to Reduce Valuation Issues as a First-Time Buyer

There are steps you can take to reduce the risk of problems:

• Research local sale prices before making an offer
• Be cautious in fast-moving markets
• Keep funds available in case a larger deposit is required
• Understand the difference between valuations and surveys

You can learn more about how lenders assess affordability and risk in our guide on what lenders check during mortgage applications.

Key Takeaways for First-Time Buyers

A mortgage valuation is for the lender, not the buyer. It confirms whether the property is suitable security for the loan. A down valuation can affect how much you can borrow, but it does not always mean your purchase is over.

Understanding this process early can help you prepare financially and avoid surprises once your mortgage application is underway.

This guide provides general information only. Personalised mortgage advice should always come from a regulated mortgage adviser.