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Postcode lottery as down valuations averaging 10% are turning "lives upside down"

ended 24. November 2025

DOWN VALUATIONS on residential properties have continued to rise in recent months, say experts, especially on higher value homes in London and the South East.

In an already static market ahead of the Budget, this is not just causing transactions to stall but pushing existing borrowers into higher loan-to-value bands when they remortgage, meaning increased interest rates and repayments. 

In some cases, experts say, properties being sharply down valued is causing severe financial issues and “turning lives upside down”.

Jonathan Alvarez Herrera, Mortgage Consultant at Ringwood-based Ayla Mortgages, says that “there has been a definite uptick in down valuations in the mortgage market, especially during the past six months of the year".

He continued: “The level changes depending on the area of the country but I would say they're about 10% on average. I have found the South East and London particularly affected, but this is simply down to the fact that properties have a higher value.”

A down valuation happens when a surveyor or valuer acting on behalf of a lender deems a property's value to be less than the agreed sale price, or open market value. There can be numerous knock-on effects, from transactions collapsing to existing borrowers paying more.

Herrera said: "On remortgages, a down valuation could push the case into a higher loan-to-value, meaning borrowers will have to pay a higher interest rate. In relation to purchases, it could jeopardise the purchase altogether unless the client is able to put down a larger deposit.

"I recently had a property down valued from £3.1million to £3million. Although proportionally this was not a large down valuation, the client was not willing to put down an additional £100k deposit and could not renegotiate the purchase price so the whole purchase fell through.”

Vijay Rabadiya, Director at Borehamwood-based The Mortgage Vine, said that while down valuations aren't as bad as in 2023, when the base rate continued to rise to rein in spiralling inflation, “they still appear regularly where sellers push for higher prices or where local comparables are limited”.

He added: "Most reductions are moderate, usually between 2%-5% below the agreed purchase price, although larger gaps do still occur in isolated cases. New build flats, unique or rural properties, and homes in slower southern markets tend to attract the most scrutiny.

"For homebuyers, a down valuation can mean renegotiating the purchase price, increasing their deposit or moving to a higher loan-to-value bracket, which can raise costs.

“For remortgagers, even a small drop in valuation can restrict product options or push them into a higher rate tier.”

Patricia McGirr, Founder at Burnley-based Repossession Rescue Network, said the impact of down valuations can be profound and that there is little, if any, consistency: “Property down valuations are turning transactions, and lives, upside down. Even the same surveyors are cutting values within months, particularly in London.

"Whether it’s lender caution, local sentiment or pre-Budget jitters, valuations have become a postcode lottery.”

Michelle Lawson, Director at Fareham-based Lawson Financial, said the whole valuation system needs an overhaul: “The valuation system is outdated, inconsistent and highly subjective, often producing drastically different results for the same property depending on the valuer."

She added that if valuations go against you, there is little you can do: “Challenging valuations is extremely difficult since valuers rarely change their decisions. While avoiding overvaluation is important, the current system lacks transparency and consistency.”

Lawson says down valuations are especially common in the buy-to-let market, and questioned the fees that are charged: "In the buy-to-let sector, especially in the South East, I have had several properties down valued, which can have serious financial consequences, such as borrowers facing higher interest rates, being unable to refinance and left on higher standard variable rates, or property chains collapsing.

"On top of that, fees, particularly in commercial valuations, are often excessively high. Two recent borrowers had to pay the same £2,500 fee each again just for a re-type for a new lender. Sometimes it is a license to print money."

Like Rabadiya, Aaron Strutt, Product and Communications Director at London-based Trinity Financial, said down valuations can be most extreme on unique properties where there are few comparables: “One of our clients bought a house in Notting Hill in 2017, and carried out a full refurbishment with a basement construction and mezzanine level added.

"It was a very high-end finish and unique property. Our broker arranged the remortgage of this property in 2020 when it was worth £7.5m after being assessed by an extremely experienced valuer.

"Another valuer has just come back with a valuation of just over £5m, which is the same as the client’s mortgage debt. The problem we have with unique properties is finding comparable property sales and backing up their valuation.

“Valuers are so worried that they are asked to have an audit trail on file it takes away their discretion and experience."

Strutt said the switch to desktop valuations carried out online is not helping: "The way homes are valued has changed, especially with the rise of desktop valuations. More computer-generated values are used to speed up the process and save costs, rather than firms being sent to a property to inspect it.

"Property values can vary wildly depending on the lender and the valuers they use.”

5 responses from the Newspage community

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Patricia McGirr
Founder at Repossession Rescue Network
Property down valuations are turning transactions, and lives, upside down. Even the same surveyors are cutting values within months, particularly in London. Whether it’s lender caution, local sentiment or pre-Budget jitters, valuations have become a postcode lottery. It might look like good news for buyers, but for sellers, developers and those refinancing off bridging loans, it’s causing chaos and stress. Even financially solid borrowers are being dragged into crisis. One default or penalty rate can collapse a deal and destroy creditworthiness overnight. I’m working with a distressed borrower whose home was once valued above £800,000, now it can’t attract £650,000, and that’s before a lender valuation. If that figure doesn’t stack up, they’ll lose everything. We’re not talking paper losses. These are real people watching equity, cash flow and money vanish in a valuation system they can't control - let alone appeal.
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Editor
Michelle Lawson
Director at Lawson Financial
The valuation system is outdated, inconsistent and highly subjective, often producing drastically different results for the same property depending on the valuer. In the buy-to-let sector, especially in the South East, I have had several properties down-valued, which can have serious financial consequences, such as borrowers facing higher interest rates, being unable to refinance and left on higher standard variable rates, or property chains collapsing. Challenging valuations is extremely difficult since valuers rarely change their decisions. While avoiding overvaluation is important, the current system lacks transparency and consistency. On top of that, fees, particularly in commercial valuations, are often excessively high. Two recent borrowers had to pay the same £2,500 fee each again just for a re-type for a new lender. Sometimes it is all a license to print money.
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Aaron Strutt
Product and Communications Director at Trinity Financial
One of our clients bought a house in Notting Hill in 2017, and carried out a full refurbishment with a basement construction and mezzanine level added. It was a very high-end finish and unique property. Our broker arranged the remortgage of this property in 2020 when it was worth £7.5m after being assessed by an extremely experienced valuer. Another valuer has just come back with a valuation of just over £5m, which is the same as the client’s mortgage debt. The problem we have with unique properties is finding comparable property sales and backing up their valuation. Valuers are so worried that they are asked to have an audit trail on file it takes away their discretion and experience. The way homes are valued has changed, especially with the rise of desktop valuations. More computer-generated values are used to speed up the process and save costs, rather than firms being sent to a property to inspect it. Property values can vary wildly depending on the lender and the valuers they use.
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Jonathan Alvarez Herrera
Mortgage Consultant at Ayla Mortgages
There has been a definite uptick in down valuations in the mortgage market, especially during the past six months of the year. The scale changes depending on the area of the country but I would say they're about 10% on average. I have found the South East and London particularly affected, but this is simply down to the fact that properties have a higher value. On remortgages, this could push the case into a higher loan-to-value, meaning borrowers will have to pay a higher interest rate. On purchase, it could jeopardise the purchase altogether unless the client is able to put down a larger deposit. I recently had a property down valued from £3.1million to £3million. Although proportionally this was not a large down valuation, the client was not willing to put down an additional £100k deposit (as he had to take this money out of his business, increasing his tax bill) and could not renegotiate the purchase price so the whole purchase fell through.
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Vijay Rabadiya
Founder & Director at The Mortgage Vine
We’re no longer seeing the surge in down valuations that dominated 2023, but they still appear regularly where sellers push for higher prices or where local comparables are limited. Most reductions are moderate, usually between 2%-5% below the agreed purchase price, although larger gaps do still occur in isolated cases. New build flats, unique or rural properties, and homes in slower southern markets tend to attract the most scrutiny. For homebuyers, a down valuation can mean renegotiating the purchase price, increasing their deposit or moving to a higher loan-to-value bracket, which can raise costs. For remortgagers, even a small drop in valuation can restrict product options or push them into a higher rate tier. Recently, a £325,000 purchase was valued at £315,000, leading to a successful renegotiation and a small deposit top up. Overall, surveyors remain cautious but reflect a stabilising market rather than one in decline.