I’ve been an avid reader of the UKHousing subreddit for years. One issue comes up there again and again, especially from first-time buyers:
An offer is accepted. The estate agent was confident on price. Everything feels on track. Then the mortgage lender comes back with a valuation that’s lower than expected and suddenly the buyer panics.
What can I do now?
At that point, most buyers are asking the same things:
- Have we overbid?
- Is the lender wrong?
- And what are we supposed to do next?
The confusion usually comes from assuming that a property has a single, “correct” value. In reality, different people in the transaction are answering different questions, even when they’re looking at the same home.
The short answer:
Estate agents and mortgage lenders are often using similar evidence but for very different purposes.
- An estate agent is optimising for the market: estimating what price the property could realistically achieve in current conditions.
- A mortgage lender is optimising for risk: deciding how much they can safely lend against the property without taking on unacceptable downside.
Once you understand that difference in purpose, the rest of the valuation puzzle becomes much easier to make sense of.
What estate agents optimise for
Estate agents are engaged to help a seller achieve a sale.
Their valuation is shaped by a practical question:
What price is this property likely to achieve if it’s marketed properly today?
That means they will typically:
- Look at recent sales and current listings
- Factor in buyer demand, competition, and scarcity
- Pay close attention to presentation, layout, and finish
- Allow for some upward movement if the market is rising
None of this is inherently misleading. It’s market-facing. Estate agent valuations are designed to work in the real world of viewings, offers, and negotiation, not in worst-case scenarios.
What mortgage lenders optimise for
Mortgage lenders are not valuing the home to decide whether it’s desirable. They’re valuing it to manage risk.
Their question is closer to:
If this borrower defaulted, would this property reliably cover the loan if we had to sell it?
As a result, lenders:
- Focus heavily on completed sales, not asking prices
- Prefer conservative, repeatable evidence
- Discount features like modern kitchens or bathrooms that don’t reliably add resale value
- Apply tighter rules to certain property types, locations, or tenures
This is why lender valuations often feel cautious, because they are meant to be.
How comparables are chosen differently
Both estate agents and lenders use comparables, but they use them in different ways.
An estate agent may:
- Use nearby listings to support a price
- Stretch the comparison slightly to reflect demand
- Weight attractive features more generously
A lender’s valuer will usually:
- Stick closely to sold prices
- Match on location, type, size, and tenure
- Exclude outliers if they can’t be justified consistently
If there isn’t enough solid evidence at the agreed price level, the lender won’t “fill the gap” with optimism even if multiple buyers were willing to pay it.
Why £ per square foot is treated differently
£ per square foot is a useful sense-check, but it’s not a universal rule.
Estate agents may reference it to explain pricing, especially in dense urban markets where buyers are used to comparing numbers quickly.
Lenders and surveyors treat it more cautiously because:
- Layout matters as much as size
- Smaller properties often command a higher £/sq ft
- Premium finishes don’t always hold resale value
- Some property types trade at persistent discounts
This is why two homes with the same floor area can legitimately support very different lending values.
Why downvaluations happen
A downvaluation doesn’t mean the property is “wrongly priced” in some abstract sense.
It usually means one of three things:
- The agreed price has moved ahead of completed sales
- The evidence is thin or inconsistent at that level
- The property carries resale risk the lender can’t ignore
In fast-moving markets, lender valuations deliberately lag. That’s not an error, it’s a feature designed to prevent over-lending.
What buyers should do when the valuation comes in low
When a mortgage valuation doesn’t match the agreed price, buyers generally have four options:
- Renegotiate the price: Using the valuation as evidence rather than opinion.
- Bridge the gap with cash: Accepting that you’re paying above the lender’s comfort level.
- Try another lender: Sometimes policies or evidence differ, sometimes they don’t.
- Walk away: Difficult, but occasionally the most rational choice.
None of these options is painless. The right choice depends on your finances, risk tolerance, and how replaceable the property is. Always speak to a mortgage adviser before making a final decision. A mortgage adviser will help evaluate your options.
When a surveyor effectively gets the final say
Mortgage valuations are not condition surveys. If later reports identify issues like dampness, movement, or non-standard construction, the conversation can shift again.
At that point:
- Repair costs become central
- Lending conditions may change
- The price may need to be revisited
This is why surveys, valuations, and pricing negotiations are related, but not interchangeable.
The takeaway
Estate agents, lenders, and buyers aren’t disagreeing. They’re answering different questions using the same property as their input. Understanding that doesn’t remove the stress of a downvaluation, but it does make it clearer, more predictable, and easier to respond to calmly. If you find yourself stuck between an agreed price and a lender’s valuation, the most important step isn’t to panic; it’s to understand which problem each number is trying to solve.
Have you experienced a down valuation from a lender?
Don’t worry. It happens more often than you’d think. Click below to find a mortgage adviser who can help you understand your options and decide what to do next.