Shirley Mushet, an ESPC Mortgages independent mortgage adviser, gives insight into what lenders consider in the valuation process.

We are currently experiencing a buoyant market, where properties are often selling in excess of their Home Report valuation.

The first thing to consider is the Home Report valuation. A lender will only lend up to the Home Report valuation, and not what you have paid for the property. If you offer more than this, you need to account for it within your own funds. Equally, if you manage to purchase for below the valuation, the lender will use the purchase price rather than the Home Report valuation for their mortgage offer.  

But how does this work? For instance, if a property has a Home Report valuation of £200,000 and is purchased for £200,000. The buyer has a deposit of £20,000 (this excludes any fees). In this case they could be offered a 90% loan to value mortgage, with the 10% deposit.  

If you pay £210,000 for the same property, you will need to supply the £10,000 over the Home Report valuation, which means you are then left with a £10,000 or 5% deposit and as such are looking for a 95% loan to value mortgage.  

If you are lucky enough to pay under the Home Report value, the lender will use the purchase price as the value NOT the Home Report value. In our example above, if an offer was accepted at £190,000 this becomes the value NOT the £200,000 Home Report valuation.  

However, this isn’t the only element considered by lenders when considering a mortgage application. Keep in mind that all lenders differ on the type of property they want to lend money on. They want to know that the property they are mortgaging is desirable (resaleability) and each lender differs in their view of this. 


What do lenders look for in a property? First of all, it must be habitable which generally means wind and watertight with a working kitchen and bathroom. Lenders will also have individual views on the construction of a property and whether it is something for them, such as; flat roofs, multi storey blocks, steel frames, concrete construction and other non-traditional construction types. In addition, lenders will also have differing views on properties above or adjacent to commercial premises.  

The condition of a property can also cause concern for a lender. For example, if a property is showing signs of structural movement, damp or infestation they may want a specialist report undertaken and could decide to retain money until work is carried out or may decide not to lend at all.  

What's the next stage? At ESPC Mortgages we can help you check which lender would accept an application on a particular property. As such, if you are happy with the home valuation, and a mortgage lender has confirmed the potential to lend you can go ahead and make an offer.  

Get mortgage advice today  

ESPC Mortgages is a team of independent mortgage advisers based in Edinburgh. With many years of experience, they are well-placed to help you purchase your first property. Get in touch with the team on 0131 253 2920 or 

The information contained in this article is provided in good faith and is relevant for six months. Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain.  

The initial consultation with an adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 for first time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.  

ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.