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Finding a Solution When You Have Had a Mortgage Declined Post-Valuation

Mortgage declined after valuation, it can be incredibly frustrating, particularly if you disagree with the surveyor's findings. Lenders need to value a property before they secure a mortgage against it to verify that it is worth the sale price and identify any risks.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

Almas Uddin2023-05-09
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Resolving a Post-Valuation Mortgage Decline

If you’ve had a mortgage declined after valuation, it can be incredibly frustrating, particularly if you disagree with the surveyor's findings. Lenders need to value a property before they secure a mortgage against it to verify that it is worth the sale price and identify any risks.

The primary reason you might have a mortgage declined due to the valuation is that the surveyor believes it has structural problems or has been sold for more than the lender could recoup in a repossession scenario.

Surveyors are normally independent, and there are several options, so a mortgage decline letter doesn’t necessarily mean your property transaction cannot proceed. We’ll explain how a mortgage declined appeal works and how to move on if you've been declined for a mortgage post-valuation.

Common Reasons You Could Be Declined for a Mortgage Due to the Valuation

Although this isn’t an exhaustive list, the most likely reasons for being declined for a mortgage after the valuation are as follows.

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Declined for a Mortgage Due to a Down Valuation

A down valuation means the surveyor thinks the property isn't worth the sale value – they might not issue a mortgage decline letter but might set a maximum cap on the amount the lender will offer.

Solutions include offering a higher deposit, renegotiating the amount you’re willing to pay with the seller due to being declined for a mortgage, or applying to a different lender, who might return a different outcome.

You can also lodge a mortgage declined appeal if you think the survey results are wrong or don't include relevant factors, such as another similar property recently selling for a higher-than-average value in the area.

How many mortgage applications are declined due to a down valuation? Roughly 400,000 property purchases a year are affected.

Declined a Mortgage Due to Structural Issues

Serious defects in the building that are likely to affect the property's value can also result in being declined for a mortgage, including cladding, invasive plant species, and issues such as subsidence, asbestos, and damp.

The lender might reconsider their mortgage declined decision if the seller is happy to rectify the problems or if the repair or removal costs have already been accounted for in the sale value.

You can address this by requesting the seller cover the cost and fix the issue or using a mortgage lender who is less likely to issue a mortgage decline letter if the problems are not critical.

How many mortgage applications are declined because of structural issues? Thousands of purchases stall due to problems such as subsistence, Japanese knotweed, cladding, asbestos and damp.

Being Declined for a Mortgage Due to a Non-Standard Construction

Many lenders, particularly mainstream banks and high street mortgage providers are reluctant to lend on any property that isn't built from bricks and mortar. Any alternatives are considered non-standard and could mean being declined for a mortgage because these properties cost more to maintain and are harder to sell.

Examples of non-standard constructions that could result in a mortgage declined notice include:

  • Rural homes with thatched roofs
  • Flats or apartments in high-rise buildings
  • Properties built with a single brick external wall
  • Timber framed houses

If you have been declined a mortgage due to a non-standard construction, the positive is that there are several lenders within the Revolution Finance Brokers network who specialise in this type of home and are likely to be able to help.

How many mortgage applications are declined because the property is non-standard? Approximately 23% of applicants are rejected, many because the home or structure falls outside of the lender’s criteria.

How Many Mortgage Applications Are Declined Post-Valuation?

Lenders don’t publish public statistics about how many applicants are declined for a mortgage for a specific reason. Still, roughly 10% of all applications are declined a mortgage for one reason or another.

The important next step is to ensure you know why you have been declined a mortgage, and the exact reason, valuation, or factors. If your lender has said you have had a mortgage declined after valuation, they should provide you with a detailed report to identify the specific cause.

Understanding the primary factors is important if you wish to file a mortgage declined appeal or approach an alternative lender.

How many mortgage applications are declined after the valuation? As we’ve seen, as many as 10% of mortgages fall through for any reason, a large proportion after the initial surveys.

What to Do If Mortgage Declined After a Valuation?

After having a mortgage declined, the best option is to review the justification and contact Revolution Finance Brokers to consider your next move. Our specialist advisors can help if you have been declined for a mortgage for any reason, including after a valuation.

Once we know the circumstances and why you have had a mortgage declined, we can recommend alternatives.

We do not suggest reapplying immediately after being declined for a mortgage, even with a different lender, because there is the potential to have a further mortgage declined, which could work against you when you come to submit additional applications.

Instead, we advise you to investigate the mortgage declined issue and identify the opportunities to rectify the problems, address the lender’s concerns, or renegotiate the sale to improve your chances of approval elsewhere.

In some scenarios, you can increase your deposit offer if you've had a mortgage declined after valuation because the surveyor calculates that the property is worth a little less than expected. Some properties command a premium based on features which a surveyor might not perceive as increasing the market value enough to match your offer price.

Where you have the funds available, increasing a deposit to around 20% or above will significantly reduce the lender's risk and may mean the loan value is now beneath the valuation, ensuring you won't be declined for a mortgage on the revised borrowing amount.

A common outcome is to notify the seller you have been declined a mortgage due to a down valuation and discuss the price or whether they can address the issues before the sale proceeds.

If the surveyor returns, finds the problems have been corrected, and returns a higher assessed value, you shouldn’t have a further mortgage declined after valuation.

However, getting declined for a mortgage for other reasons, such as non-standard construction, likely means you need to apply to an alternative lender with more flexible lending policies or who specialises in these types of structures.

Can a Mortgage in Principle be Declined After the Valuation?

Potentially, a lender could withdraw an agreement in principle if the value ‘on paper’ does not match the survey – being declined a mortgage at this stage can be disruptive when you have an agreement on the table from your lender.

Many lenders charge the buyer for the valuation, and if you have already paid a fee and then received a mortgage decline letter, you may be unable to recoup the cost.

Reapplying without assessing why your lender has declined a mortgage may mean repeating this same process, reducing your chances of approval, and increasing the fees paid – without a successful resolution or getting declined for a mortgage again.

If a more suitable lender can step in to support applicants who have been declined a mortgage with favourable terms, lower fees, and an agreeable valuation, this may be the best possible solution to ensure your purchase can proceed after having a mortgage declined.

Expert Advice After Having a Mortgage Declined After Valuation

Revolution Finance Brokers is an independent, specialist team of mortgage brokers who can help if you have been declined for a mortgage.

We are whole-of-market, meaning we aren't limited to any specific lender or product, and we will always do our utmost to help you find the right lending after being declined a mortgage.

Please complete our enquiry form to arrange a good time to talk with one of our skilled consultants after you have had a mortgage declined or read through our below FAQs for more information about getting declined for a mortgage – and what to do next.

Almas Uddin
Almas Uddin

Founder and Mortgage Advisor

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The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature.

We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

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