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What To Do if a Surveyor Devalues House?

Martha Lott

Written by

18th Nov 2022 (Last updated on 24th Nov 2022) 5 minute read

It can be easy to worry if a surveyor devalues your home or the property you’re buying. Rest assured, there are steps to take if a Mortgage Valuation or Valuation Report undervalues your home.

In this article, we’ll explain why a property may be devalued and what to do if this happens from a buyer's and seller's perspective.

This article will cover the following:
  1. What is a Mortgage Valuation?
  2. How are Homes Valued?
  3. Why Would a Surveyor Devalue a Home?
  4. What Can I Do if a Surveyor Devalues the House?
  5. What Happens with my Mortgage Loan?
  6. Can you Challenge a Valuation?
  7. Can I Reduce my Offer on a House after Survey?
  8. Can Japanese Knotweed Devalue a Home?
  9. Can I Remortgage an Undervalued Property?

What is a Mortgage Valuation?

A Mortgage Valuation is carried out by your mortgage lender to determine if the property you’re buying is worth what you’re paying. This is required to secure a mortgage loan.

Many people confuse a Valuation Report with a Mortgage Valuation. A Valuation Report is carried out by a RICS Valuer to determine the market value of your property or the property you plan to buy. You can pay extra to have a Valuation added to your property survey.

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How are Homes Valued?

There are a number of things a surveyor will look for in a mortgage valuation. This includes:

  • Condition of the property
  • Sold prices for similar properties in the area
  • Property market in the area - what’s in demand/what isn’t
  • Property market in general

Why Would a Surveyor Devalue a Home?

We’ve listed the most common reasons a surveyor will devalue a home:

  • Seller Asking too Much - The most common reason a surveyor would devalue a home is if the asking price is set much higher than what it should be. Estate agents will value the home and then it’s up to the seller how much they want to sell for. Many sellers may start with a higher price with the expectation of lower offers.
  • Estate Agent’s Valuation too High - Your estate agent might have misjudged the value of the home. Sellers should get valuations from at least 3 different estate agents to get an accurate market value for their home.
  • The Condition of the Property - The surveyor will take into account the condition of the property when assassin the value. If the property has serious structural issues or major repair work is needed, then this can negatively affect the value.
  • Desktop Valuations - Often Mortgage Valuations will be carried out online without anyone visiting the property. An online valuation may miss important details such as a recent renovation or work that has added value. This is why it’s vital to get a RICS Valuation as well to confirm the market value of the property.

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What Can I Do if a Surveyor Devalues the House?

It can be disheartening if the surveyor or lender devalues your property or the property you plan to buy. However, there are certain steps to take to resolve this. Below we've listed what to do if the surveyor devalues a property as a buyer and a seller.

As a buyer:

  • Negotiate Price with Seller - The easiest option is to renegotiate the price with the seller. As you’ll have an official mortgage valuation or valuation report confirming the house is worth less, they’ll have little to contest this.
  • Appeal Decision - Appealing the decision with your mortgage lender will only work if you have evidence of a mistake in market value comparisons.
  • Valuation Report - You can pay to get a Valuation Report by a RICS Valuer in addition to your mortgage valuation. This could be risky if you pay for the report to be given the same result.
  • Use Another Lender - You can switch lenders and have another mortgage valuation. However, you will likely get the same results for a lot of extra time and hassle.
  • Increase Deposit - To save time in the conveyancing process, you can increase your deposit so the mortgage lender will lend you the same amount.

As a seller:

  • Lower the Price - If you’ve set an unrealistic asking price, this can usually be resolved by reducing your price to match similar properties' sale prices. This will mean additional steps in the conveyancing process to update this in the paperwork, so ensure you’re asking price is not too high to begin with.
  • Fix Issues - If there are certain issues that are devaluing your property, figure out if you can fix them. These will be highlighted in the buyer’s property survey. You should expect the buyer to renegotiate their original offer if the property was overvalued.

What Happens with my Mortgage Loan?

If the property you’re buying has been undervalued, then the amount your mortgage lender originally said they’d lend you will now change. This will affect how much they lend you and how much deposit you need to put down.

If you’re after a fast conveyancing process, you can opt to put down a higher deposit so the amount they lend you will stay the same. You’ll have to work out if you can afford to do this, so it’s strongly advised to talk to financial professionals.

Can you Challenge a Valuation?

Most mortgage lenders will let you appeal your valuation. You’ll have to submit forms and evidence to back up your claim. Halifax allow appeals and ask you to provide detailed evidence of sold prices of 3 similar properties in the last 6 months.

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Can I Reduce my Offer on a House after Survey?

If your survey reveals bad results or a devaluation, you can use the results to attempt to reduce your original offer. The seller might not always accept this, but if you give evidence and fair reasoning for your renegotiation, you have a better chance of a reduction.

To learn more, read what happens after a survey on a house.

Can Japanese Knotweed Devalue a Home?

Japanese Knotweed can devalue a property between 5-15%, according to experts Knotweed Help. Your mortgage lender may not lend to you if the home you’re buying has a live infestation. However, if you can provide evidence that either you or the seller plans to remove this and solve the issue, it shouldn't be a problem.

Can I Remortgage an Undervalued Property?

If the property you’re remortgaging has gone down in value, this will make it difficult to remortgage to a better deal. This would mean you’re reducing the equity in your home and would need to increase your LTV (loan to value) when remortgaging.

For best results, remortgage with a lender that uses a local surveyor to carry out the valuations. They’ll have the knowledge of the local property market to provide an accurate valuation.

However, you can appeal your lender’s valuation if you provide sufficient evidence. You’ll have to provide them with details of any improvements or alterations made to the property after you bought it.

Martha Lott

Written by Martha Lott

Having guest authored for many property websites, Martha now researches and writes articles for everything moving house related, from remortgages to conveyancing costs.

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