---
title: "Mortgage Declined on Valuation, Down and Nil Valuations"
description: "Mortgage declined on valuation: down valuations, nil valuations and retentions, and when to renegotiate, add cash, challenge the valuation or change lender."
url: "https://mortgagelane.com/mortgages/mortgage-declined-on-valuation"
site: "Mortgage Lane"
collection: "mortgages"
date: "2026-10-08"
author: "Joseph Lane"
category: "Mortgages"
reviewed: "2026-10-12"
reading_time: "33 min"
byline: "Joseph Lane"
author_credentials: "CeMAP · FCA authorised firm"
language: "en-GB"
robots: "index,follow"
---

# Mortgage Declined on Valuation, Down and Nil Valuations

Mortgage declined on valuation: down valuations, nil valuations and retentions, and when to renegotiate, add cash, challenge the valuation or change lender.

Mortgage declined on valuation: down valuations, nil valuations and retentions, and when to renegotiate, add cash, challenge the valuation or change lender.

[Down valuation](https://mortgagelane.com/definitions?term=down-valuation)

Valuation

When the lender's valuer values a property below the agreed purchase price, so the loan-to-value rises or the loan offered falls.

[Read the full definition of Down valuation](https://mortgagelane.com/definitions?term=down-valuation)

## Expert advice on a mortgage declined on valuation

Speak to a Mortgage Lane adviser about your options.

## In short

A mortgage declined on valuation means the lender's valuer has either put the property below the agreed price or reported that it is not acceptable security for that lender at all. After a down valuation the lender lends against the lower figure, and a purchase can still go ahead if you renegotiate, add cash, challenge the figure or change lender. A nil valuation usually needs a lender whose criteria accept the property.

## What is a mortgage declined on valuation?

**A valuation decline is a lender's refusal to lend, or to lend the amount requested, because its valuation of the property is lower than the price or because the valuer has found the property unacceptable as security.** It takes two main forms. A [down valuation](https://mortgagelane.com/definitions#def-down-valuation) puts the property below the agreed price, which reduces the loan or pushes it into a higher [loan to value](https://mortgagelane.com/definitions#def-loan-to-value) band. The options are then to renegotiate the price, add cash to cover the gap, challenge the valuation with [comparable evidence](https://mortgagelane.com/definitions#def-comparable-evidence), or move to a lender whose valuer may see it differently. A [nil valuation](https://mortgagelane.com/definitions#def-nil-valuation) reports that the property is not suitable security at all, and the application is declined. It usually reflects something about the property that rules it out for that lender, such as its construction, condition, lease, location or [Japanese knotweed](https://mortgagelane.com/definitions#def-japanese-knotweed) nearby, and the way forward is a lender whose criteria accept it, or putting the problem right first.

The [mortgage valuation](https://mortgagelane.com/definitions#def-mortgage-valuation) is carried out for the lender, to confirm that the property is adequate security for the loan, and it is not a survey of condition. The [Royal Institution of Chartered Surveyors (RICS)](https://mortgagelane.com/definitions#def-royal-institution-of-chartered-surveyors) describes it as a limited check for the lender's benefit, without the detail of a survey, so defects that would be costly to put right may not appear in it ([RICS: home survey types](https://www.rics.org/consumer-guides/house-surveys-uk-the-costs-types-and-benefits-of-an-rics-home-survey)). Lenders of regulated mortgages must use reliable valuation standards, such as those of RICS, or take reasonable steps to make sure a valuer they instruct uses them. The [Financial Conduct Authority](https://mortgagelane.com/definitions#def-financial-conduct-authority)'s guidance also lets a lender rely on its wider assessment of the security instead of an inspection in every case ([FCA Handbook: MIPRU 1.3](https://handbook.fca.org.uk/handbook/MIPRU/1/3.html)), which is why some homes are valued by an [automated valuation model](https://mortgagelane.com/definitions#def-automated-valuation-model) or a [desktop valuation](https://mortgagelane.com/definitions#def-desktop-valuation). A buyer who wants a report on condition commissions a separate [RICS Home Survey](https://mortgagelane.com/definitions#def-rics-home-survey) at Level 1, Level 2 or Level 3, and our guide to a [mortgage declined after survey](https://mortgagelane.com/guides/declined-mortgages/mortgage-declined-after-survey) covers what the buyer's own survey can turn up.

Loan to value is calculated on the lower of the price and the valuation. Lenders that publish a basis lend that way on an ordinary purchase, and the government's [Mortgage Guarantee Scheme](https://mortgagelane.com/definitions#def-mortgage-guarantee-scheme) rules measure a property's value the same way: the valuation or, if lower, the purchase price ([HM Treasury: 2025 Mortgage Guarantee Scheme rules](https://www.gov.uk/government/publications/2025-mortgage-guarantee-scheme/2025-mortgage-guarantee-scheme-rules-accessible)). A valuation above the price does not raise the loan, and one below it reduces what the lender will advance at a given loan to value.

A mortgage on a home you will live in is normally a [regulated mortgage](https://mortgagelane.com/definitions#def-regulated-mortgage), meeting the legal test that at least 40% of the property is used as a dwelling ([legislation.gov.uk: Regulated Activities Order, article 61](https://www.legislation.gov.uk/uksi/2001/544/article/61)). The lender assesses it under the FCA's conduct rules ([FCA Handbook: MCOB](https://handbook.fca.org.uk/handbook/mcob)). Most buy to let lending is outside those rules, and the valuation works the same way there: the lender lends against its own figure.

Whether it is described as a mortgage declined after valuation or a mortgage valuation declined, the outcome turns on what the valuer's report says, and a report can change a case in five ways: the [market value](https://mortgagelane.com/definitions#def-open-market-value), the property's condition and structure, legal points that affect saleability, how easily the property would resell, and whether it meets the lender's own property policy. If you have been turned down for a reason other than the property, our [declined mortgages](https://mortgagelane.com/insights/declined-mortgages) page covers the recovery sequence. The pages on a [mortgage declined after application](https://mortgagelane.com/mortgages/mortgage-declined-after-application) and a [mortgage declined at underwriting](https://mortgagelane.com/mortgages/mortgage-declined-at-underwriting) deal with declines about income, credit or documents, and our page on [low credit score mortgages](https://mortgagelane.com/mortgages/low-credit-score-mortgages) covers credit scoring.

Mortgage Lane helps buyers and remortgagers facing down valuations, nil valuations and [retentions](https://mortgagelane.com/definitions#def-mortgage-retention): on standard homes in rising markets, new builds priced at a premium, non-standard and older homes, short leases, [flats above commercial premises](https://mortgagelane.com/mortgages/flat-above-shop-mortgages) and properties with knotweed or structural history. Most of the work is identifying the outcome, working out how it changes the loan and the cash needed, and finding the lenders whose criteria fit the property.

### Scotland and Northern Ireland

In Scotland the seller provides a [Home Report](https://mortgagelane.com/definitions#def-home-report) before marketing most homes. It includes a single survey, based on a visual inspection by a chartered surveyor, with a valuation ([mygov.scot: Home Report](https://www.mygov.scot/buy-home/home-report)). The surveyor can also prepare a mortgage valuation report for lenders. Some lenders rely on it and others instruct their own valuer, so lenders do not all work from the same figure. A buyer who offers more than the valuation pays the difference from their own money, because the loan follows the lower figure. Once the [missives](https://mortgagelane.com/definitions#def-missives) are concluded the contract is binding, and a buyer who then pulls out can be liable to pay the seller damages ([mygov.scot: making an offer](https://www.mygov.scot/buy-home/make-offer)), so a valuation problem needs settling before that point. Our page on [mortgages in Scotland](https://mortgagelane.com/mortgages/mortgages-scotland) covers Home Reports and offers over the valuation.

In Northern Ireland the lender may need its own valuation, and [exchange of contracts](https://mortgagelane.com/definitions#def-exchange-of-contracts) is the point at which the sale becomes legally binding ([nidirect: buying a home step by step](https://www.nidirect.gov.uk/articles/buying-home-step-step-guide)), as in England and Wales. Our [mortgages in Northern Ireland](https://mortgagelane.com/mortgages/mortgages-northern-ireland) page covers the rest of the process there.

## Mortgage rates after a down valuation

**A down valuation can change the rate, because lenders price mortgages in loan to value bands and the band is measured against the lower of the price and the valuation.** If the loan stays the same after a down valuation, the loan to value rises, which can move the case into a higher-priced band or beyond the product's maximum. Adding cash or reducing the price keeps the original band. On the figures in the worked example below, a £270,000 loan is 90% of a £300,000 price but 94.7% of a £285,000 valuation, which falls in the 95% band. The Mortgage Guarantee Scheme supports loans in that band, above 90% and up to 95%. A higher band generally carries a higher rate, and some lenders stop at 90%.

The rate is only part of the cost: a move to a new lender can mean a new valuation, and product fees can differ between bands. The comparison to make is the total cost over the product period against the cash a higher loan saves now. In our experience 95% residential lending is available with suitable lenders, including on new builds, while applicants with [adverse credit](https://mortgagelane.com/definitions#def-adverse-credit) are usually limited to around 90% ([95% mortgages](https://mortgagelane.com/mortgages/95-percent-mortgages) and [90% LTV mortgages](https://mortgagelane.com/mortgages/90-ltv-mortgages) cover the two bands).

**Valuation came in low, or nil?** Get in touch with the valuation figure, any comments the lender passed on and the agreed price. We will set out which routes are open to you and what each one needs in cash.

## Mortgage valuation decline criteria: what we review

**After a valuation decline we review the items in the table to establish which outcome it is and how it changes the loan and the cash needed.** A down valuation, a nil valuation and a retention each lead to different routes, and the valuer's comments, where the lender releases them, usually show which one applies and why. Lenders set their own policies on releasing valuation reports, on reconsidering a figure and on the specialist reports they accept, so the rows describe what each item shows, and each lender applies its own rules to it. The [underwriting](https://mortgagelane.com/definitions#def-underwriting) of the rest of the application, such as income and credit, is a separate decision, and a lender can still decline on those grounds after a valuation that supports the price.

## What we review after a valuation decline

*What we review after a valuation decline*

| What we review | Why it matters |
| --- | --- |
| Valuation figure or nil outcome | Shows whether it is a down valuation, a nil valuation or a retention, and sets the loan the lender will now offer. |
| Valuer's comments, if released | Point to the reason: construction, condition, comparable sales or saleability. Some lenders release the report and others give the main reason only. |
| Agreed price | Sets the gap between the loan on the lower figure and the price. |
| Deposit and savings | Show whether you can cover a gap from your own money and what is left for fees and moving costs. |
| Loan to value bands | Show whether keeping the original loan moves the case into a higher band or beyond the lender's maximum. |
| Income and credit commitments | Decide whether a larger loan at a higher loan to value passes the lender's affordability assessment. |
| Comparable sales | Are the basis for a challenge: recent sales of similar nearby homes that support the price. |
| Property details | Construction, tenure, lease length, location and any alterations decide which lenders' criteria can accept the property. |
| Retention or report conditions | Show the work, or the specialist report, the lender needs before it releases funds or confirms the value. |
| Purchase timetable | Shows whether there is time for a challenge, a second valuation or a new lender before the contract becomes binding. |

The items Mortgage Lane reviews after a valuation decline, as at 8 October 2026. Lender valuation policies vary, including whether the report is released and whether a figure is reconsidered, so each lender's criteria and underwriting decide a case.

## Types of valuation outcome, and how each is treated

**Short of a clean figure at the agreed price, a valuation can come back in four ways, and lenders deal with each one differently.**

### Down valuation

The valuer puts the property below the agreed price. This can happen in fast-moving or falling markets, on new builds sold at a premium, and where the price reflects a bidding contest between buyers. The property is still acceptable security at the lower figure, so the case can continue with a smaller loan, more cash, a lower price or a higher loan to value.

**Get in touch** with the valuation figure and the agreed price.

### Nil valuation

The valuer reports that the property cannot be recommended as security at any value for that lender, because of its construction, condition, lease, location or another risk factor. RICS explains that a nil valuation is usually due to the mortgage lender's own criteria for lending on a property, such as the way it was built, concerns about cladding or structural problems ([RICS: concerns about valuations](https://www.rics.org/content/dam/ricsglobal/documents/standards/2024_April_Appendix_A_Concerns_About_Valuations_Version_2.pdf)). Another lender's criteria may accept the same property.

**Get in touch** with any reason the lender has given.

### Retention

The lender agrees to lend but holds back part of the loan until work the valuer specifies is done, so the buyer funds that part of the purchase until the lender releases it. The [mortgage offer](https://mortgagelane.com/definitions#def-mortgage-offer) sets out the retention and the conditions for releasing it.

**Get in touch** with the work the lender requires and the amount it is holding back.

### Valuation subject to specialist reports

The valuer asks for a structural, damp, timber, electrical or knotweed report before confirming the value, and the lender does not issue an offer until the report is provided and accepted. The report may confirm the concern, lead to a retention for the work it recommends, or clear the property at the agreed figure. Waiting for a report can also hold up the purchase timetable.

**Get in touch** with the report the lender has asked for.

## Down valuations: when the mortgage valuation is lower than the offer

**A down valuation leaves the mortgage in place, but the lender now lends its loan to value percentage of the lower figure.** Either the loan falls and the buyer must find the difference, or the loan stays the same and the loan to value rises, possibly into a higher-priced band or beyond the product's maximum. A valuation below the price also suggests that another buyer's lender could reach a similar view, which is one reason a seller may agree to renegotiate. The seller can then meet the valuation, split the difference or refuse.

### Why valuations come in below the price

A valuer works from comparable evidence: the prices achieved for similar properties, ideally recent, nearby and from sales between unconnected parties. A price agreed after a bidding contest, in a market that has moved since the comparable sales, or for features the valuer sees as worth less than the buyer does, can sit above that evidence. The valuer may also note condition issues that lower the figure, and those can be a reason to renegotiate in their own right. The valuation is the valuer's opinion of market value for the lender, while the agreed price is what one buyer offered, and the two can differ.

### New build down valuations

New build prices can include a premium for being new and the effect of incentives, which the second-hand market may not support. The seller sets out the incentives, tenure and construction method for a new build sale on UK Finance's Disclosure Form, which goes to the lender's conveyancer and to its valuer on request ([UK Finance: Disclosure Form](https://lendershandbook.ukfinance.org.uk/disclosure-form)). RICS guidance for valuers says monetary incentives such as cashback or paid fees do not add value to the property in themselves, that comparable new build sales are adjusted to remove the effect of incentives, and that some lenders exclude the value of being the first owner ([RICS: valuation of individual new-build homes](https://www.rics.org/content/dam/ricsglobal/documents/standards/valuation_of_individual_new_build_homes.pdf)). A price that relies on incentives, or on a premium that resales nearby do not show, is therefore more exposed to a down valuation. Our [new build mortgages](https://mortgagelane.com/guides/residential/new-build-mortgages) guide covers warranties and mortgage offer expiry on new builds.

### Down valuations on a remortgage

On a [remortgage](https://mortgagelane.com/definitions#def-remortgage) there is no purchase price, so the valuation sets the loan to value on its own. A figure below what you expected raises the loan to value, which can move you into a higher-priced band or limit how much you can borrow. A [product transfer](https://mortgagelane.com/definitions#def-product-transfer) to a new deal with your existing lender often involves no new valuation, although lenders differ. Our page on a [remortgage after a bridging loan](https://mortgagelane.com/short-term-finance/remortgage-after-bridging-loan) covers a lower valuation at the end of a bridge.

RICS guidance tells valuers that cashback, paid fees and other monetary incentives add no value to a new build in themselves, so a price that depends on them is more exposed to a down valuation.

## Nil valuations: when a property is unsuitable for a mortgage

**A nil valuation means the lender will not lend on the property at all.** Reasons that can lead to one include:

- [non-standard construction](https://mortgagelane.com/definitions#def-non-standard-construction) the lender does not accept;
- a short lease, below the lender's minimum unexpired term, or ground rent or service charge terms the lender does not accept;
- a [flat above a takeaway](https://mortgagelane.com/definitions#def-flat-above-commercial-premises) or other commercial premises;
- Japanese knotweed close to the property;
- significant structural movement;
- no working kitchen or bathroom;
- unauthorised works, or alterations without building regulations approval;
- agricultural or other occupancy restrictions;
- flood risk;
- legal points the valuer flags because they affect saleability, such as a restrictive covenant, a flying freehold, an unadopted road or a problem with access;
- cladding on a block of flats where the fire safety evidence the lender asks for, such as an [EWS1 form](https://mortgagelane.com/definitions#def-ews1-form), is missing.

RICS notes that a valuer instructed by a lender acts in line with that lender's instructions, so a nil valuation usually reflects the lender's criteria for the property. If a borrower thinks the valuer applied the criteria wrongly, RICS says to raise the concern with the mortgage lender, because the lender, not the borrower, is the valuer's client. The usual way forward is a lender whose criteria accept the issue, or resolving the issue first: extending a short lease, completing repairs, obtaining a missing building regulations sign-off or a specialist report, or putting a knotweed management plan in place. Applying to several lenders before the reason is known can repeat the same outcome, and where the problem is a fundamental defect, such as confirmed subsidence, other lenders are likely to reach a similar view.

### Short leases

Each lender sets its own minimum remaining term for a [leasehold](https://mortgagelane.com/definitions#def-leasehold) flat. In our experience, lenders that accept a short lease limit the mortgage term rather than the loan to value. In England and Wales, a leaseholder who qualifies can ask the landlord for a statutory lease extension of 90 years on a flat, as at October 2026 ([GOV.UK: extending a lease](https://www.gov.uk/leasehold-property/extending-changing-or-ending-a-lease)), and extending before a sale or a remortgage can widen the choice of lenders. That statutory right does not apply in Scotland or Northern Ireland, which have their own rules ([legislation.gov.uk: Leasehold Reform, Housing and Urban Development Act 1993, section 188](https://www.legislation.gov.uk/ukpga/1993/28/section/188)). Our [mortgage for a leasehold flat](https://mortgagelane.com/mortgages/mortgage-for-leasehold-flat) page covers lease length, and the guide to a [mortgage declined because of ground rent](https://mortgagelane.com/guides/declined-mortgages/mortgage-declined-ground-rent) covers the lease terms lenders check.

### Construction, location and other property reasons

Some reasons have their own pages: [non-standard construction mortgages](https://mortgagelane.com/mortgages/non-standard-construction-mortgages), [Japanese knotweed mortgages](https://mortgagelane.com/mortgages/japanese-knotweed-mortgages), which explains the RICS management categories ([RICS: Japanese knotweed and residential property](https://www.rics.org/profession-standards/rics-standards-and-guidance/sector-standards/valuation-standards/japanese-knotweed-and-residential-property)), and the guides to a [declined mortgage near commercial premises](https://mortgagelane.com/guides/declined-mortgages/near-commercial) and a [mortgage refused due to flood risk](https://mortgagelane.com/guides/declined-mortgages/mortgage-refused-due-to-flood-risk).

## Mortgage retentions

**A retention is part of the loan held back until work the valuer specifies, such as a new roof, damp treatment or an essential repair, is completed and inspected.** The lender advances the rest of the loan at completion, so the buyer must fund the purchase without the retained sum and reclaim it after the work. That raises the cash needed at completion by the amount retained, and the cost of the work comes on top. The lender releases the money once the condition is met, on the evidence it specifies, which can include a further inspection by its valuer, and some lenders charge a fee for that reinspection. Some lenders do not make retentions at all, and ask for the work to be done before completion.

Where the property is uninhabitable, a retention can point to [refurbishment finance](https://mortgagelane.com/definitions#def-refurbishment-finance) instead, such as a [bridging loan](https://mortgagelane.com/definitions#def-bridging-loan) to buy and repair the property, followed by a mortgage once the work is done. A bridging loan secured on a home you or a close family member will live in is normally a regulated mortgage contract, while one taken to buy an investment property for a business purpose is usually outside the FCA's mortgage rules ([legislation.gov.uk: Regulated Activities Order, article 61A](https://www.legislation.gov.uk/uksi/2001/544/article/61A)). Our [bridging loans](https://mortgagelane.com/short-term-finance/bridging-loans) and [refurbishment loans](https://mortgagelane.com/short-term-finance/refurbishment-loans) pages cover both routes.

## Your options after a down valuation

**A down valuation leaves six routes, and which one fits depends on whether the valuation reflects the market, how much cash you have and how much time is left before the contract becomes binding.** The table below summarises them.

### Renegotiating the price

Where the valuation reflects the market, the seller may accept a lower price, because another buyer's lender may reach a similar figure. Meeting the valuation keeps the original loan to value band and reduces the deposit needed. Splitting the difference needs some extra cash, and the worked example below shows how much.

### Adding cash

If you have savings to cover the gap and want the property, you can keep the agreed price and put in more of your own money. The lender lends its loan to value percentage of the valuation, and the extra cash covers the rest.

### Accepting a higher loan to value

If your lender has a higher band and your income supports the larger loan, you can keep the original loan at the higher loan to value. The higher band may carry a higher rate, and the lender's maximum for the property type or the borrower may stop the case at a lower figure.

### Challenging the valuation

You can ask the lender to reconsider where recent sales of similar nearby homes support the agreed price. The valuation belongs to the lender: RICS says that the client for a residential mortgage valuation is normally the lender, that someone unhappy with the figure should contact the lender, and that RICS itself cannot change a valuation figure ([RICS: concerns about valuations](https://www.rics.org/content/dam/ricsglobal/documents/standards/2024_April_Appendix_A_Concerns_About_Valuations_Version_2.pdf)). Lenders review challenges at their discretion, and the valuer may or may not change the figure. A challenge is strongest where it points to comparable sales the valuer did not use, a feature of the property it did not take into account, or a factual error in the report. You can search sold prices free for England and Wales on GOV.UK ([GOV.UK: search house prices](https://www.gov.uk/search-house-prices)), and find the last purchase price of a home in Scotland on Registers of Scotland's ScotLIS service ([Registers of Scotland: ScotLIS](https://www.ros.gov.uk/scotlis)).

### Changing lender

Another lender instructs its own valuer and applies its own criteria, so it may reach a different view, particularly where the comparable evidence is mixed. Applying elsewhere takes time and can mean a new valuation fee, so consider how likely a different figure is before applying. Where the valuation reflects recent sales nearby, a second valuer may reach a similar figure.

### Walking away

In England and Wales an offer is not legally binding until contracts are exchanged, and after exchange of contracts neither side can usually pull out without paying compensation ([GOV.UK: buying a home](https://www.gov.uk/buying-a-home/print)). The sale also becomes binding at exchange in Northern Ireland. Before that point a buyer can withdraw without a contractual penalty, although costs already spent, such as the valuation, survey and legal fees, are lost. In Scotland the binding point is the conclusion of missives. A valuation problem therefore needs resolving before the contract binds; our page on a [mortgage declined after exchange](https://mortgagelane.com/mortgages/mortgage-declined-after-exchange) covers what happens when a lender withdraws later.

## Options after a down valuation

*Options after a down valuation*

| Option | When it fits | What it does to the numbers |
| --- | --- | --- |
| Renegotiate the price | The valuation reflects the market and the seller may accept | The loan stays at the lender's loan to value of the lower price, and the deposit falls with the price |
| Add cash | You have savings to cover the gap and want the property | The loan is the loan to value of the valuation, and your extra cash covers the rest of the price |
| Accept a higher loan to value | Your lender has a higher band and affordability allows | The loan stays the same and the loan to value rises, which can mean a higher rate |
| Challenge the valuation | You have recent comparable sales supporting the price | If the lender raises the figure, the original plan may stand; if not, the other routes remain |
| Change lender | A different valuer or different criteria may reach a different view | A new valuation, which may carry its own fee, and a new figure to work from |
| Walk away | Before exchange of contracts, or before missives are concluded in Scotland, if none of the above works | No contractual penalty, but costs already spent are lost |

A summary of the routes after a down valuation, checked 8 October 2026. Binding points from GOV.UK (England and Wales), nidirect (Northern Ireland) and mygov.scot (Scotland). Whether a lender has a higher band, reconsiders a figure or accepts the property is set by its own criteria.

## How a mortgage after a valuation decline is arranged

1. **Outcome confirmed.** Down valuation, nil valuation or retention; the valuer's comments obtained where the lender releases them, and the main reason for any nil valuation.
2. **Numbers worked out.** The loan at the lender's loan to value on the lower figure, the loan to value if the original loan is kept, and the cash gap, using the calculator on this page.
3. **Route chosen.** Renegotiate, add cash, accept a higher loan to value, challenge the figure or change lender, checked against the time left before exchange of contracts or the conclusion of missives.
4. **Evidence gathered.** Comparable sales for a challenge, or the specialist reports, quotes and plans the lender has asked for.
5. **Application continued or moved.** The case goes ahead with the same lender on the new figures, or moves to a lender whose criteria accept the property, with a new valuation.

## A £15,000 down valuation: the arithmetic

**An illustrative buyer agrees £300,000 with a £30,000 deposit and a £270,000 mortgage at 90% loan to value. The valuation comes back at £285,000.**

### Step 1. The purchase and the valuation

The figures are hypothetical, chosen to show the arithmetic, and they are the starting figures in the calculator on this page. The lender lends on the lower of the price and the valuation, so £285,000 is now the figure that counts, and 90% of it is £256,500, £13,500 less than the loan the buyer applied for.

## Step 1 figures

*Step 1 figures*

| Item | Figure |
| --- | --- |
| Agreed price | £300,000 |
| Deposit planned | £30,000 (10% of the price) |
| Mortgage applied for | £270,000 (90% of the price) |
| Lender's valuation | £285,000 |
| Down valuation | £15,000 (5% of the price) |
| Lender's loan to value limit for the case | 90% |
| Loan at 90% of the valuation | £256,500 |

Hypothetical figures for illustration, worked with the calculator on this page. The 90% limit is an example, not a lender term.

### Step 2. Four routes through the gap

The table sets the original plan against three routes: paying the agreed price with more cash, keeping the original loan at a higher loan to value, and renegotiating the price. A challenge or a new lender, if it produces a higher figure, moves the buyer back towards the first row.

## Step 2 figures: four routes

*Step 2 figures: four routes*

| Route | Price paid | Loan | Loan to value | Cash from the buyer | Extra cash beyond the planned £30,000 |
| --- | --- | --- | --- | --- | --- |
| Original plan, before the valuation | £300,000 | £270,000 | 90% of £300,000 | £30,000 | None |
| Keep 90% on the valuation and pay the agreed price | £300,000 | £256,500 | 90% of £285,000 | £43,500 | £13,500 |
| Keep the £270,000 loan | £300,000 | £270,000 | 94.7% of £285,000 (95% band) | £30,000 | None, if a 95% product is available and affordable |
| Renegotiate the price to £285,000 | £285,000 | £256,500 | 90% of £285,000 | £28,500 | None; £1,500 less than planned |

Illustrative arithmetic on hypothetical figures, worked with the calculator on this page. Availability of higher loan to value products depends on the lender, the property and affordability. Fees and purchase costs are not included. Not an offer of finance.

### Step 3. Splitting the difference

A seller who will not come down to £285,000 may agree a figure between the two. While the price is above the valuation the loan stays at £256,500, so every pound of price above £285,000 comes from the buyer. At £286,500 the planned £30,000 deposit covers the purchase exactly, which is the highest price that deposit covers at this valuation. Splitting the difference at £292,500 needs £36,000, or £6,000 more than planned.

## Step 3 figures: prices between the valuation and the agreed price

*Step 3 figures: prices between the valuation and the agreed price*

| Price agreed | Loan at 90% of £285,000 | Cash from the buyer | Against the planned £30,000 |
| --- | --- | --- | --- |
| £285,000 | £256,500 | £28,500 | £1,500 less |
| £286,500 | £256,500 | £30,000 | The same |
| £292,500 | £256,500 | £36,000 | £6,000 more |
| £300,000 | £256,500 | £43,500 | £13,500 more |

Illustrative arithmetic on hypothetical figures, worked with the calculator on this page. The loan stays at 90% of the £285,000 valuation whenever the price is higher. Not an offer of finance.

### Step 4. Keeping the original loan

Keeping the £270,000 loan means borrowing 94.7% of the valuation, so the case needs a lender with a 95% product for that property and that borrower. At 95% of £285,000 a lender would lend up to £270,750, which covers the £270,000. In our experience suitable lenders offer 95% residential lending, including on new builds, but applicants with adverse credit are usually limited to around 90%, which closes this route for them. The larger loan also has to pass the lender's [affordability](https://mortgagelane.com/definitions#def-affordability) assessment: at 5 times income, the standard multiple in Mortgage Lane's experience, £270,000 needs £54,000 of income after credit commitments, against £51,300 for £256,500. The 95% band generally carries a higher rate than the 90% band, so the buyer weighs £13,500 of extra cash now against a higher rate for the length of the product, or challenges the valuation if recent sales support £300,000.

### What decides the case

Find out whether it is a down valuation, a nil valuation or a retention and work out the loan and the cash gap, then renegotiate, add cash, challenge the figure or change lender before exchange of contracts or the conclusion of missives. On these figures the choice is between £13,500 of extra cash, a higher loan to value band, a lower price and evidence that supports £300,000. The lender sets the valuation figure, so the price, the cash and the choice of lender are the parts you can change. Our [mortgage declined on affordability](https://mortgagelane.com/mortgages/mortgage-declined-on-affordability) page covers the case where income sets the limit instead.

## Related topics

- [2026](https://mortgagelane.com/mortgages/mortgage-declined-after-application)Mortgage[Mortgage Declined After Application, Reasons and Next Steps](https://mortgagelane.com/mortgages/mortgage-declined-after-application)Mortgage declined after application: the credit scoring, affordability, document, valuation and property reasons, protecting your credit file and reapplying.[Read more about Mortgage Declined After Application, Reasons and Next Steps](https://mortgagelane.com/mortgages/mortgage-declined-after-application)
- [2026](https://mortgagelane.com/mortgages/mortgage-declined-on-affordability)Mortgage[Mortgage Declined on Affordability, Why Lenders Differ](https://mortgagelane.com/mortgages/mortgage-declined-on-affordability)Mortgage declined on affordability: how lenders calculate it, stress rates and income multiples, commitments and childcare, and what changes the answer.[Read more about Mortgage Declined on Affordability, Why Lenders Differ](https://mortgagelane.com/mortgages/mortgage-declined-on-affordability)
- [2026](https://mortgagelane.com/mortgages/mortgage-declined-after-exchange)Mortgage[Mortgage Declined After Exchange, When an Offer Is Withdrawn](https://mortgagelane.com/mortgages/mortgage-declined-after-exchange)Mortgage declined after exchange: why offers are withdrawn, the notice to complete and your deposit, replacement lenders and bridging to complete on time.[Read more about Mortgage Declined After Exchange, When an Offer Is Withdrawn](https://mortgagelane.com/mortgages/mortgage-declined-after-exchange)

## Before you renegotiate price

Before you renegotiate price, ask what evidence supports the lower valuation and whether the seller will consider it. Confirm the revised loan and deposit before committing to a new price.

## More topics in this series

## Down valuation calculator

The calculator shows what a down valuation does to the loan, the cash you need, the loan to value if you keep the original loan and the highest price your deposit covers. The starting figures are the illustration on this page: a £300,000 price, a £285,000 valuation, a £30,000 deposit and a 90% limit. Enter your own price, valuation, deposit and the lender's limit, and move the valuation to see how the loan and the gap change.

Explore your borrowing

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Enter your figures in pounds. Your estimate updates as you go.

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Loan to value

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Indicative estimate only, subject to lender criteria, affordability and valuation. Each lender sets its own loan to value limit and decides whether to reconsider a valuation, and the figures leave out fees and purchase costs. This is not a mortgage offer. Your home may be repossessed if you do not keep up repayments on your mortgage.

## Frequently asked questions about a mortgage declined on valuation

**Q: Why was my mortgage declined on valuation?**

faq-id: why-was-my-mortgage-declined-on-valuation

A mortgage is declined on valuation when the lender's valuer either values the property below the agreed price, which reduces the loan, or reports that it is not suitable security at all, which is a nil valuation. Nil valuations usually follow the lender's own property criteria and reflect something about the property, such as its construction, condition, lease, location or a risk like Japanese knotweed or flooding. After a down valuation the mortgage is still possible at a smaller loan or a higher loan to value, while a nil valuation usually needs a lender whose criteria accept the property, or a fix to the problem first. The first step is to ask the lender for the main reason.

**Q: What is a down valuation?**

faq-id: what-is-a-down-valuation

A down valuation is when the lender's valuer values the property below the price you agreed to pay. The lender bases its loan on the lower of the price and the valuation, so you need more cash to cover the gap, a higher loan to value, or a lower price. For example, on a £300,000 purchase valued at £285,000, a lender lending 90% offers £256,500 against the £270,000 you planned to borrow. With a down valuation, unlike a nil valuation, the property is still acceptable security at the lower figure.

**Q: What if the mortgage valuation is less than offer?**

faq-id: what-if-the-mortgage-valuation-is-less-than-offer

If the mortgage valuation is less than your offer, the lender lends its loan to value percentage of the lower figure, so the loan falls or, if you keep the same loan, the loan to value rises. This is called a down valuation. You can renegotiate the price, add cash, accept a higher loan to value if a product is available and affordable, challenge the valuation with recent comparable sales, or try another lender, whose valuer may reach a different figure. In England, Wales and Northern Ireland the choice needs making before exchange of contracts, and in Scotland before missives are concluded, because after that point you are committed to the purchase.

**Q: Can I still buy the house after a down valuation?**

faq-id: can-i-still-buy-the-house-after-a-down-valuation

You can still buy after a down valuation if you can cover the difference between the reduced loan and the price from your own money, accept a higher loan to value product, or agree a lower price with the seller. Another lender may also value the property differently, although where the valuation reflects recent sales nearby a second valuer may reach a similar figure. Which route works depends on your savings, your income at the larger loan, whether a higher loan to value product exists for that property and borrower, and how much time is left before the contract becomes binding.

**Q: Should I renegotiate the price after a down valuation?**

faq-id: should-i-renegotiate-the-price-after-a-down-valuation

Renegotiating is worth considering, because a down valuation suggests the market value is below the price and another buyer's lender may reach a similar view. A seller may meet the valuation, split the difference or refuse. Meeting the valuation keeps your original loan to value band and reduces the deposit: on a £300,000 purchase valued at £285,000 with a 90% loan, the cash needed falls from £43,500 at the full price to £28,500. Whether to press for a reduction is your decision, and it turns on how much you want the property and the cash you hold.

**Q: Can I challenge a mortgage valuation?**

faq-id: can-i-challenge-a-mortgage-valuation

You can ask the lender to reconsider a valuation by providing recent sales of similar nearby properties that support the agreed price. RICS says someone unhappy with a mortgage valuation should contact the lender, because the lender is normally the valuer's client, and that RICS itself cannot change a valuation figure ([RICS: concerns about valuations](https://www.rics.org/content/dam/ricsglobal/documents/standards/2024_April_Appendix_A_Concerns_About_Valuations_Version_2.pdf)). Lenders review challenges at their discretion, and the valuer may or may not change the figure. A challenge is strongest where it identifies comparable sales the valuer did not use, a feature it missed or a factual error.

**Q: Will another lender value the property differently?**

faq-id: will-another-lender-value-the-property-differently

Another lender may value the property differently, because it instructs its own valuer and applies its own property criteria, particularly where the comparable evidence is mixed. Applying elsewhere takes time and can mean a new valuation fee, so it is worth weighing the chance of a different outcome first. Where a down valuation reflects recent sales nearby, a second valuer may reach a similar figure. A nil valuation often follows one lender's criteria, so a lender whose criteria accept the issue may lend where the first would not.

**Q: Does a down valuation affect my mortgage rate?**

faq-id: does-a-down-valuation-affect-my-mortgage-rate

A down valuation affects your rate if you keep the same loan, because the loan to value rises and may move into a higher-priced band. For example, a £270,000 loan is 90% of a £300,000 price but 94.7% of a £285,000 valuation, which falls in the 95% band, and a higher band generally carries a higher rate. Adding cash or reducing the price keeps the original band and rate. If the rise takes the loan above the lender's maximum for your case, the loan has to come down instead.

**Q: What is a nil valuation?**

faq-id: what-is-a-nil-valuation

A nil valuation is when the lender's valuer reports that the property is not suitable security for that lender at any value, so the application is declined. It reflects a feature of the property, measured against the lender's criteria, rather than its price. RICS explains that nil valuations are usually due to the mortgage lender's own criteria, for example because of the way a property was built, cladding or structural problems ([RICS: concerns about valuations](https://www.rics.org/content/dam/ricsglobal/documents/standards/2024_April_Appendix_A_Concerns_About_Valuations_Version_2.pdf)). Because lenders' criteria differ, a property one lender values at nil may be acceptable to another.

**Q: Why would a property get a nil valuation?**

faq-id: why-would-a-property-get-a-nil-valuation

Reasons for a nil valuation include non-standard construction the lender does not accept, a short lease, a flat above a takeaway or other commercial premises, Japanese knotweed nearby, structural movement, no working kitchen or bathroom, unauthorised works, agricultural or other occupancy restrictions, and flood risk. Valuers can also flag legal points that affect saleability, such as a flying freehold or an unadopted road, and cladding on a block of flats without the fire safety evidence the lender asks for. Each lender sets its own property criteria, so a reason that rules out one lender may not rule out another.

**Q: Can I get a mortgage after a nil valuation?**

faq-id: can-i-get-a-mortgage-after-a-nil-valuation

You may be able to get a mortgage after a nil valuation from a lender whose criteria accept the issue, such as a lender that lends on non-standard construction or short leases, or after resolving the issue, for example by extending a lease or completing repairs. The first step is to find out the reason, because it decides which lenders can consider the property. Where the reason is a fundamental defect, such as confirmed subsidence, other lenders are likely to reach a similar view, and the problem may need putting right before any lender will lend.

**Q: Will the lender tell me why the valuation was nil?**

faq-id: will-the-lender-tell-me-why-the-valuation-was-nil

Some lenders will tell you, or your broker, the main reason for a nil valuation, but the valuation report is not always released, and policies on reports and reasons vary by lender. The reason decides which lenders' criteria can accept the property and whether the issue can be fixed. If you think the valuer assessed the property wrongly against the lender's criteria, RICS says to raise the concern with the mortgage lender, since the valuer acted for the lender ([RICS: concerns about valuations](https://www.rics.org/content/dam/ricsglobal/documents/standards/2024_April_Appendix_A_Concerns_About_Valuations_Version_2.pdf)).

**Q: What is a mortgage retention?**

faq-id: what-is-a-mortgage-retention

A mortgage retention is part of the loan that the lender holds back until work the valuer specifies, such as a roof repair or damp treatment, is completed and inspected. The lender advances the rest at completion, so you must fund the purchase without the retained amount and reclaim it after the work. The mortgage offer sets out the retention and the conditions for releasing it. Some lenders do not make retentions and ask for the work to be done before completion instead.

**Q: How do I get a mortgage retention released?**

faq-id: how-do-i-get-a-mortgage-retention-released

To release a retention, complete the specified work, then ask the lender to reinspect; some lenders charge a fee for the reinspection. Once the valuer confirms the work is satisfactory, or you provide the other evidence the lender asked for, the lender releases the retained amount. Until then you fund that part of the purchase yourself, so the cost of the work and the time it takes need to fit your budget. The mortgage offer sets out what the lender needs before it releases the money.

**Q: Is a mortgage valuation the same as a survey?**

faq-id: is-a-mortgage-valuation-the-same-as-a-survey

A mortgage valuation is not the same as a survey. It is carried out for the lender to confirm the property is adequate security, and RICS describes it as a limited check for the lender's benefit without the detail of a survey, so costly defects may not appear in it. A separate RICS Home Survey at Level 1, Level 2 or Level 3, commissioned by the buyer, reports on the property's condition and defects, with Level 3 the most detailed ([RICS: home survey types](https://www.rics.org/consumer-guides/house-surveys-uk-the-costs-types-and-benefits-of-an-rics-home-survey)). In Scotland the seller's Home Report includes a single survey with a valuation.

**Q: Can a down valuation happen on a new build?**

faq-id: can-a-down-valuation-happen-on-a-new-build

A down valuation can happen on a new build, because new build prices can include a premium for being new and the effect of incentives that the second-hand market may not support. RICS guidance tells valuers that monetary incentives, such as cashback or paid fees, do not add value to the property in themselves, and that comparable new build sales should be adjusted to remove their effect ([RICS: valuation of individual new-build homes](https://www.rics.org/content/dam/ricsglobal/documents/standards/valuation_of_individual_new_build_homes.pdf)). Valuers look at comparable sales, and the lender bases the loan on their figure, so a price that depends on incentives is more exposed to a down valuation.

**Q: Can a remortgage be affected by a down valuation?**

faq-id: can-a-remortgage-be-affected-by-a-down-valuation

A down valuation on a remortgage raises the loan to value, which can move you into a higher-priced band or limit how much you can borrow. There is no purchase price on a remortgage, so the lender's valuation sets the loan to value on its own. A product transfer to a new deal with your existing lender often involves no new valuation, although lenders differ. Some lenders value a remortgage without an inspection, using an automated or desktop valuation, and a lower figure has the same effect.

**Q: Can I pull out of a purchase after a down valuation?**

faq-id: can-i-pull-out-of-a-purchase-after-a-down-valuation

Before exchange of contracts you can pull out of a purchase after a down valuation without a contractual penalty, though you lose costs already spent, such as the valuation, survey and legal fees. In England and Wales an offer is not legally binding until contracts are exchanged, and after exchange neither side can usually pull out without paying compensation ([GOV.UK: buying a home](https://www.gov.uk/buying-a-home/print)). The sale also becomes binding at exchange in Northern Ireland. In Scotland a buyer who pulls out after missives are concluded can be liable to pay the seller damages, so a valuation problem needs resolving before that point.

**Q: What does valuation subject to reports mean?**

faq-id: what-does-valuation-subject-to-reports-mean

A valuation subject to reports means the valuer needs a specialist report, such as a structural, damp, timber, electrical or knotweed report, before confirming the value. The lender will not issue a mortgage offer until the report is provided and accepted. The report may confirm the valuer's concern, lead to a retention for work it recommends, or clear the property at the agreed figure. The time a report takes can affect the purchase timetable, so it is worth arranging as soon as the lender asks.

**Q: How can I avoid a down valuation?**

faq-id: how-can-i-avoid-a-down-valuation

You can reduce the risk of a down valuation by checking recent sold prices for similar nearby properties before offering, being cautious about bidding well above the asking price, and bearing in mind that a valuation may not reflect new build premiums and incentives. You can search sold prices in England and Wales free on GOV.UK ([GOV.UK: search house prices](https://www.gov.uk/search-house-prices)), and in Scotland the Home Report gives a surveyor's valuation before you offer. No step removes the risk, because the valuer forms its own view of the evidence.

## Talk it through with an adviser

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Published: 2026-10-08

Last reviewed: 2026-10-12

Source: https://mortgagelane.com/mortgages/mortgage-declined-on-valuation