How should I deal with a down valuation?

How should I deal with a down valuation?

18:54 PM, 27th November 2013, About 8 years ago 33

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I operate in what I think is fairly straightforward way; buy a distressed property, add value, get a valuation, mortgage and then buy the next.

Recently I finished a 3 bed semi that I paid £60,000 for, I spent around £15,000 on the refurbishment and valued the finished product for around £100,000.

I let the property for £500 pcm and was hoping to get roughly £60-70,000 back on the mortgage.

When the valuation came back it was for £65,000 which left me a little shocked. I disputed the valuation and discovered from the tenant that no surveyor had been. When questioned they said a desk top survey had been done and that no visit was required and then backtracked when I pointed that they’d mentioned the decorative condition of the house.

A run down 2 bed terrace on the same street  was sold for £75,000 and coupled with the low purchase price of my own, appears to have provided the surveyor with enough information to give a valuation rather than actually go and conduct a proper inspection. This can’t be right surely?  How should I deal with a down valuation

Anyway the mortgage company isn’t for moving and are offering a loan of £39,000.

I’d be very interested to hear from any mortgage brokers or other landlords who have come across a similar problem and what they did about it.

Many thanks



by Simone Gilks (Mortgage Adviser)

19:40 PM, 11th December 2013, About 8 years ago


Writing the amount of mortgage cases I do a day, the chances of down valuations are high but that's why I installed a valuation system quite similar to that used by the lenders. I quite quickly noticed that there is room for considerable errors and so I ensure that I take other precautions when trying to justify the property value the client has put down on the application, I need to know its right or.....well you know what happens!

The system does not understand if you have decorated in such a way it would make Llewelyn Bowen jealous nor would it know if your garden was designed by Piet Oudolf! it doesn't understand if you live next door to the Beckhams or the family from a Jeremy Kyle show. It just values tangible parts of the property and nothing more.

But, lenders play a part in this too by having various rules on valuing. Some lenders, when re-mortgaging will NOT instruct a survey visit and instead rely on using the Price indexed valuation system. As a mortgage broker we get to know who does this and if we really think this will be a problem, avoid them for that particular case.

Other lenders whilst they may visit the property and still down value, will NOT accept comparables despite being able to produce them. The would rather lose the deal than fall our with their surveyors - that's for sure.

So my thought would be the broker, if you don't use one then these are the things you would never know and so maybe consider getting one. They can be invaluable when looking to finance a property both now and in the future. It could well have been that advice was taken before investing in the property of applying for a mortgage with that particular lender?.

Check out my profile, I am always here to advise. If you tell me the lender I may be able to give some advice on that too.

Many thanks

Simone Gilks

by Mick Roberts

7:47 AM, 12th December 2013, About 8 years ago

Reply to the comment left by "Simone Gilks Adv CeMAP, CeCM" at "11/12/2013 - 19:40":

I always say use a broker, better to make your mistakes with them, let them 'tidy up' your application before it gets to the lender.


11:48 AM, 12th December 2013, About 8 years ago

Without reading all of the posts on this particular thread. I would assume that the valuation was a Free valuation, therefore to save money the proposed lender would instruct a drive by to save money.
If you paid a valuation fee, I would complain to the lender that the surveyor did not gain entry to the property and therefore did not do a proper survey.
Why don't you instruct your own survey. Contact Esurv and they will give you a price.

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