Most terms put the percentage in the headline and the valuation basis in a line further down, which is the line that decides how much you can borrow.
The figures in a valuation report
Open market value is market value as RICS defines it: what the property should sell for between a willing buyer and a willing seller, at arm's length, after proper marketing, with neither under pressure to deal. When people talk about what a property is worth, this is usually the number they mean.
A 180-day value is the same exercise with one change. The valuer assumes the property has to sell within six months. A 90-day value assumes three. The Red Book treats both as market value on a special assumption, and the restriction has to be written into the valuer's terms of engagement, with the reason for it, before they start. The valuer can also report the unrestricted figure next to the restricted one.
Many lenders ask for all three figures in the same report: open market value, a 180-day value and a 90-day value. A lender might lend on any one of them, or it might have a rule that if the 180-day figure comes in more than a set percentage below open market value, it lends on the 180-day figure instead or takes a deduction off the open market value. Those rules are not always in the headline terms, so the basis has to be checked lender by lender.
What the gap does to a 75% loan
In my experience a 180-day value on a residential bridge usually comes in around 10 to 15% under open market value. It moves with the property and the market, and it is wider where a quick sale is harder, on an unusual building or a rural house for instance.
On a property with an open market value of £1,000,000, this is what 75% looks like on each basis:
| Value used | Loan at 75% | As a share of open market value | |
|---|---|---|---|
| Lender sizing on open market value | £1,000,000 | £750,000 | 75% |
| Lender sizing on a 180-day value 10% lower | £900,000 | £675,000 | 67.5% |
| Lender sizing on a 180-day value 15% lower | £850,000 | £637,500 | c.64% |
On those numbers you would need to find another £75,000 to £112,500 yourself, and a cheaper rate on the smaller loan can still cost you more once that shortfall has been funded from somewhere else.
The headline on a bridge is normally gross as well, with retained interest and fees taken out of the loan before any money reaches you, and that widens the gap. As an illustration, take 0.85% a month retained for 12 months and a 2% arrangement fee, both worked on the gross loan:
| Lender on open market value | Lender on a 180-day value 15% lower | |
|---|---|---|
| Gross loan at 75% | £750,000 | £637,500 |
| Interest retained, 12 months at 0.85% | £76,500 | £65,025 |
| Arrangement fee at 2% | £15,000 | £12,750 |
| Cash on day one | £658,500 | £559,725 |
| As a share of open market value | c.66% | c.56% |
Both offers say 75%, and the difference in day-one cash is c.£98,800. How bridging works goes through how retained interest is worked out.
90-day values
Lenders rarely size a loan on a 90-day value. When one asks for it, it usually wants to know what it would get back in a fire sale. The report will still call it a 90-day value, because the Red Book does not allow "forced sale value" as a basis: a forced sale describes the circumstances of a sale.
A lender is entitled to ask. But if a lender is already thinking about the fire sale before the loan has started, I'd question whether it's a lender you want to be in bed with.
Where the broker comes in
A broker's first job here is to understand what basis each lender is lending on, and the second is to make sure the right type of valuation is being reported. We know the basis for the lenders we place with, and it shapes which of them see a case.
The basis is set in the valuer's instruction. If the lender lends on open market value but the report only gives a 180-day figure, the loan gets sized on the 180-day figure, so we check the instruction before the valuer is booked.
A down-valuation is a separate problem. It is the valuer's view of the property and it can happen on any basis. Getting the basis right only makes sure the 75% is applied to the figure you were expecting.
Getting the best valuation you can
Whichever basis a lender uses, the figure starts with the valuer, and the most useful thing you can do is make their job easy. That mostly comes down to being prepared.
Have comparables ready: recent sales of similar property nearby, with addresses, dates and prices, and a line on why each one compares. The valuer will do their own research, but they will look at evidence you put in front of them.
If you have done work to the property, show it. A schedule of the works, photos from before and after, invoices, and any sign-offs or certificates let the valuer see the quality of the work instead of guessing at it.
Be there for the inspection, or send someone who knows the property, with keys to every part of it. The valuer is instructed by the lender and independent of you, so the aim is to give them evidence, not to argue for a number.
Development, land and part-built sites
This article is about bridging on standing property. Development finance looks at more than one figure. A lender uses the gross development value of the finished scheme and the residual value of the site, which is the gross development value less the cost of building it, alongside other measures such as loan to cost. Development land and part-built sites are valued on a residual basis, with the cost left to complete taken into account on a part-built site. Market and restricted values play a smaller part in all of them.
If you are buying at a discount, below market value bridging finance covers how lenders that lend on open market value treat it, and the purchase bridge page sets out how we place a purchase.
Sources
- RICS, Valuation: Global Standards (Red Book), effective 31 January 2025: the definition of market value (glossary and IVS 102 A10), and VPS 2 section 11 on marketing constraints and forced sales (11.3 and 11.4 on special assumptions and reporting the unrestricted figure, 11.5 on stating the reason for a time limit, 11.7 on forced sale value).
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