It’s never much fun selling property in a sticky market.
You get the agent round, they tell you what you want to hear, everyone nods sagely at the “strong local demand”, the property goes online, and then… tumbleweed.
Well, perhaps not tumbleweed. That would at least be movement.
The BBC has been reporting that homes are getting harder to sell as higher mortgage rates frustrate buyers. That won’t come as a shock to anyone actually trying to sell. Buyers are cautious. Mortgage payments are higher. Affordability is tight. And, as ever, everyone seems to be waiting for someone else to blink first.
But just when sellers think they’ve found a buyer, agreed a price, and things are finally working out, along comes another potential problem: the down valuation.
What’s A Down Valuation?
A down valuation is when the lender’s valuer looks at the property and says, in effect, “Nice try, but no.”
The buyer may have agreed £250,000. The seller may have mentally spent £250,000. The estate agent may have already moved on to telling everyone they achieved £250,000, with the usual modesty agents are famous for.
But the lender’s valuer might say it’s worth only £235,000.
And that’s a problem because, for mortgage purposes, the lender usually works from the valuer’s figure, not the agreed price. So the buyer either has to find more cash, renegotiate, try another lender, or walk away.
None of which is ideal if everyone has already ordered boxes, booked removals, and emotionally moved into the next house.
Why Is This Happening?
Partly because the market is not as strong as some sellers would like to believe.
That’s not a criticism. We all anchor to the number we want. Investors do it. Homeowners do it. I’ve probably done it while pretending I was being terribly objective and professional. Being an ex-surveyor doesn’t make you immune to optimism. Sadly.
But valuers are looking at actual evidence. Recent sales. Mortgage risk. Local demand. Whether similar properties are sitting around unsold. Whether prices are drifting. Whether buyers are stretching so hard their affordability calculations look like a yoga class.
And in a higher-rate market, they are likely to be more cautious.
The problem is that caution can feel brutal when it lands late in the transaction. A buyer might love the property, but lenders are not in the business of loving things. They are in the business of getting their money back.
The Awkward Bit For Sellers
The most uncomfortable part is that a down valuation might not be “wrong”.
Sometimes the agreed price is simply ahead of the market. Sometimes an enthusiastic buyer has overpaid. Sometimes an agent has overvalued to win the instruction.
And sometimes the valuer may be too cautious. That happens too. Valuation is not an exact science, however much the clipboard gives the impression otherwise.
But either way, the result is the same: the sale becomes harder.
For investors selling, this is important because time costs money. Holding costs, mortgage payments, council tax, utilities, insurance, service charges, and the general joy of waiting around while solicitors discover yet another ancient covenant about not selling whisky from the front garden. Yes, I had a solicitor’s inquiry about that regarding a house I was selling a few months ago. Where is the common sense?
If the sale falls through, you may have lost weeks or months. In a falling or flat market, that can be expensive.
What Can Investors Do?
Be realistic from the start.
Don’t just price from asking prices. Asking prices are hopes, dreams, and occasionally works of fiction. Look at sold prices. Look at what is actually completing. Speak to agents who will tell you the truth, not just the one who waves the biggest number under your nose.
If you’re buying, leave room for things to go wrong. If a deal only works because the valuation comes in exactly where you need it, the refurb costs behave beautifully, and the market remains cheerful, then it probably isn’t going to happen.
And if you’re selling, don’t assume the highest offer is the best offer. A proceedable buyer with strong finances may be worth more than a buyer stretching every penny and hoping the lender doesn’t notice.
The Bigger Point
This market isn’t dead. But it is harder work.
Good properties, priced sensibly, still sell. Sensible investors can still buy. There are still opportunities, especially where sellers need certainty and buyers understand the numbers.
But the days of assuming values will just glide upwards and bail everyone out are not the market we’re in.
Hope is lovely.
But it doesn’t usually get past the valuer.
Here’s to successful property investing.
Peter Jones
Author, property investor and ex-Chartered Surveyor
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