What is a valuation report?

Updated October 2026

A valuation report is a chartered surveyor’s written opinion of what a property is worth on a stated basis at a stated date, prepared for a named client and purpose. On a commercial mortgage, a bridging loan or a development loan the client is the lender, the purpose is secured lending, and the report is prepared under the RICS Valuation Global Standards, the Red Book, which sets out what a valuer must inspect, consider, state and assume. The lender lends against the figure in the report, not against the price the borrower has agreed.

The borrower usually pays for the report and usually sees it, but it is addressed to the lender and the valuer’s duty of care runs to the lender. A report commissioned by a buyer for a purchase decision is a different instruction, even from the same surveyor. We have access to a range of UK commercial finance lenders through our principal, White Rose Finance Group Limited. Each lender instructs its own valuer from its own panel and sets its own requirements.

What the report contains

The property: its address, tenure, description, construction, condition as observed, accommodation and site. The location and the market: comparable transactions and lettings the valuer has relied on. The basis of value and the valuation date. The figure or figures, with the method used: comparison with similar sales, investment method where the property is let, residual method on a development site, or the profits method on a trading property such as a hotel or a care home. The assumptions and special assumptions, which say what the valuer has taken as given. And the matters the lender should know: planning, environmental risk, structural concerns, flood risk, the lease terms, the tenant’s standing, anything that affects saleability.

The bases of value a lender asks for

Market value: the estimated amount for which the property should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction after proper marketing, as the Red Book defines it. Market rent, where the property is or could be let. On an investment property, the value with the existing tenant in place and sometimes with vacant possession. On a development or refurbishment, the current value and the gross development value on completion of the works. And on many secured-lending instructions, a value on the special assumption of a restricted marketing period, commonly 90 or 180 days, which tells the lender what a forced sale might realise. Reinstatement cost for insurance is often reported alongside, and is a different figure for a different purpose.

Why the valuation decides the loan

Every lender publishes a maximum it will advance as a percentage of value, and the value is the valuer’s figure. Where the report comes in at the agreed price the loan is as expected; where it comes in below, the loan is recalculated on the lower figure and the borrower finds the difference, renegotiates the price or withdraws. The report’s conditions matter as much as its figure: a lender can make its offer conditional on a structural report, a planning confirmation or a lease variation that the valuer has flagged. The loan to value answer works the arithmetic.

Types of valuation a lender may accept

A full inspection and report, where the valuer visits and reports in full. A drive-by or external inspection, where the valuer sees the property from the road and reports on that basis, used by some lenders on lower-risk cases. A desktop valuation, where the valuer reports from records and comparables without a visit. And an automated valuation, a statistical model rather than a surveyor’s opinion, which some bridging lenders accept on suitable security to take the survey off the critical path. Each lender publishes which it accepts, on what property and up to what loan size, and the fee reflects the work.

What is in the borrower’s hands

Paying the fee, which the lender needs before it instructs the valuer and which is not usually refundable if the loan does not complete. Arranging access, including to tenanted parts. Having the documents the valuer asks for ready: leases, planning consents, the schedule of works and the cost plan on a refurbishment, floor plans, the energy performance certificate. And reading the report when it arrives, because the conditions in it become conditions of the offer, and a lender rarely waives what its own valuer has raised.

For property-secured lending we work with UK limited companies and LLPs only, for business and commercial purposes. Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file.

Frequently asked questions

Who pays for the valuation report?

The borrower, in almost every case, and before the lender instructs the valuer. The fee is set by the lender’s panel valuer for the property and is usually not refundable if the loan does not complete.

Can I use my own surveyor’s valuation?

Rarely for the loan itself. The lender instructs a valuer from its own panel and relies on a report addressed to it. Some lenders will re-address or accept a recent report from an approved firm; each publishes its own policy.

How long is a valuation report valid?

The report speaks as at its valuation date. Each lender sets how long it will rely on one before asking for an update, and a report that predates a change in the property or the market is likely to be refreshed.

What if the valuation is lower than the price?

The lender lends against its valuer’s figure, so the loan falls. The borrower can find the difference, renegotiate with the seller, ask the lender to consider further comparables, or withdraw. The valuation fee is spent either way.

Is CapExpand regulated?

CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. If you have a complaint, our complaints page explains how it is handled.

How is CapExpand paid?

We will receive commission from lenders. On some cases we also charge a fee, which we set out in writing and agree with you before you proceed.

Before the valuation fee is paid

The property, the price and the loan wanted are enough for us to check the case against lenders’ published criteria, so the fee is paid to a lender whose criteria the case meets.

Check your options

Sources

Checked 26 October 2026. The bases of value follow the RICS Red Book definitions; each lender publishes which valuation types it accepts and instructs its own valuer, and nothing on this page is a quote.

Important information

Think carefully before borrowing. Property or other assets offered as security may be at risk if you cannot keep up repayments.