Short answer: a lender downvaluation doesn’t mean the property is “wrong”. It means the lender won’t lend that much against it. You now have a few clear options: renegotiate, bridge the gap, change lender, or walk away. The right move depends on why the valuation came in low and how much flexibility you actually have.
This guide walks through those options calmly, in the order most buyers should consider them.
Why downvaluations happen (and why they’re common)
A lender’s valuation is not a market opinion. It’s a risk check.
The valuer is answering a very specific question:
“If this borrower defaults, could the lender recover the loan by selling the property quickly?”
That leads to conservative outcomes, especially when:
- the price has moved quickly
- comparable sales are thin or outdated
- the property has unusual features (non-standard construction, short lease, mixed-use buildings)
- the local market is softening
This is normal behaviour, not a judgment on your decision-making.
First: confirm what’s actually been downvalued
A lender downvaluing a property doesn’t automatically mean the deal is dead.
It means the lender is willing to lend less than expected, and that changes the maths.
Before reacting or rushing to call the estate agent, get clear on the numbers:
- Purchase price: what you agreed to pay
- Valuation: what the lender will lend against
- Gap: the difference you’d need to cover or renegotiate
Also check:
- Has the mortgage been declined entirely, or just reduced?
- Did the valuer flag specific concerns, or is this purely a comparables issue?
Small gaps are often manageable. Large ones usually force a bigger decision.
Your main options (and when each makes sense)
1. Renegotiate the price
Best first step in most cases
If the lender won’t support the price, that weakens the seller’s position — even in a strong market.
Why this often works:
- the seller risks the same issue with the next buyer
- most sellers don’t want to re-list
- lenders are broadly aligned on downside risk
How to approach it:
- anchor on the lender’s valuation, not your opinion
- keep it factual and unemotional
- let the estate agent do the pushing
Even a partial reduction can make the deal workable.
2. Increase your deposit
Only if it’s genuinely affordable
You can bridge the gap with cash, but that doesn’t make the valuation disappear.
Ask yourself:
- does this reduce your safety buffer too much?
- are you over-concentrating money in one asset?
- would you regret this decision if prices flatline?
This can make sense for:
- long-term homes
- unique properties
- buyers with strong financial resilience
It’s riskier for stretched first-time buyers.
3. Try another lender
Sometimes effective, sometimes a waste of time
Different lenders use different panels and criteria. A new valuation might come in higher.
But be realistic:
- many lenders share the same comparables
- repeated low valuations are a warning signal
- extra applications cost time and fees
This works best when:
- the downvaluation is marginal
- the property is in a fast-moving area
- there’s clear recent evidence the valuer missed
A good mortgage adviser can tell you when this is worth trying.
4. Walk away
Hard, but sometimes the right call
Walking away isn’t failure. It’s risk management.
It’s usually the right move when:
- the gap is large
- the seller won’t budge
- you’re being pushed to over-stretch
- the property has underlying issues flagged elsewhere (survey, lease, structure)
Lender downvaluations often save buyers from regret they’d only feel years later.
What not to do
- Assume the lender is “wrong” without evidence
- Ignore the gap and hope it fixes itself
- Stretch your finances just to “save the deal”
- Let urgency from others override your risk tolerance
Pressure is common. Permanent consequences are optional.
How this affects chains and timelines
Downvaluations don’t automatically kill a chain, but they do pause momentum.
Expect:
- short renegotiation windows
- estate agent pressure
- deadlines framed as urgent (often they’re not)
Take the time you need. A week now is better than a decade of regret.
Final thought
A lender downvaluation isn’t a verdict on the home. It’s a signal about risk at this price, today.
Your job isn’t to “win” the purchase. It’s to decide whether the numbers still make sense for you.
If the seller refused to move on price and you had to bridge the gap yourself, accepting the risk of negative equity, would you still feel comfortable going ahead?
That answer usually tells you what to do next.