The valuation memorandum: how to put your case to a valuer

The short answer

A valuation memorandum is a short, honest pack of evidence you give the valuer before they visit: what the building is, what you intend to do with it, the basis of value you are putting forward, a table of every flat, three to five sold comparables with full addresses and dates, photos, plans, and proof of any refurbishment. You send it about three days before the appointment, you turn up on the day, and you let the valuer reach their own number. Done properly it makes the difference between a valuer working a building out from scratch in an afternoon and a valuer confirming a case that has already been made for them. Done badly, with an inflated figure or a cherry-picked comparable that falls over, it costs you their trust in everything else you have said.

We prepare one on every block we buy. The method below is the one we teach, and it is built on a simple idea: a valuer is an independent professional with a duty to the lender, so your job is to give them complete evidence, clearly presented, and never to lean on them for a number. If you are reading this looking for a way to get a valuer to inflate a figure, this is the wrong page. If you want the number to reflect the building rather than the valuer's afternoon, read on.

Why the memorandum matters more on a split than anywhere else

On an ordinary purchase a low valuation is a nuisance. On a title split it is the deal. The lender lends against the aggregate value of the flats, usually around 75% of it, and that advance has to cover the block purchase price plus the costs of the split. The valuation is the single riskiest step in the whole process. Everything before it, the sourcing, the negotiation, the comparables, is preparation for it, and everything after it, the leases, the plans, the completion, is mechanical once the number is agreed.

Valuers also come to a block with less to go on than they would with a three-bedroom semi. Blocks are thin markets, the comparables are scattered, and a cautious valuer in a thin market protects themselves by going low. The memorandum is how you replace "I could not find much" with "here is the evidence". The two valuation bases, and why a split moves a building from one to the other, are explained in how a valuer decides what your split units are worth; this guide is the practical companion to it.

Call it a memorandum, not a report

Small point, large effect. A "valuation report" is what the valuer writes. A "valuation pack" sounds like something assembled to get a result. A "memorandum" is information, offered. We never call it anything else in front of a valuer, and the framing is true: it is their opinion, formed with the benefit of evidence we have collected because we know the building better than they can in two hours.

What goes in it, section by section

Ours is a short slide deck turned into a PDF, ten to fifteen pages, delivered personally rather than emailed into a void. In order:

1. Site information. The address, a block plan, the number of flats, the tenure, and a sentence on what you are buying and why.
2. The strategy. What the building will be on the day the valuer is valuing it: a block of separately titled long-leasehold flats, let on ordinary tenancies. If the valuation is on a special assumption that the split has happened, say so plainly, because that is the instruction the lender has given.
3. The area. A short, factual narrative. This matters most where an area reads as tired: real regeneration schemes, employers, investment, with sources. On our forty-flat block in Pembroke Dock we wrote about the renewable energy and oil and gas industries around the port, because a valuer from outside the area would not know they were there.
4. The basis of valuation. Stated plainly, and labelled "bricks and mortar", never the abbreviation. On that block we set out a figure of £119 per square foot across the flats, excluding communal areas, which reached about £2.23 million. State the method so the valuer can test it, rather than the conclusion so they can argue with it.
5. The flat-by-flat table. Flat number, floor, bedrooms, size, EPC rating, current rent, and estimated rental value where you are showing it. This is the page a valuer uses most, so it has to be right to the square metre.
6. The comparables. Three to five, to the standard in the next section.
7. Photos and floor plans. The official Land Registry plans where they exist, otherwise the lease plans you have had drawn. A valuer who can see the layout before the visit asks better questions on the day.
8. Refurbishment evidence. Invoices, before-and-after photos, certificates. Condition should never be guesswork.
9. The commercial tenant, if there is one. Who they are, the rent, the years left on the lease, any break clause. A ground-floor unit let to a three-month-old single-site business is worth far less to a valuer than the same unit let to a national chain on a long lease, and the valuer needs to know which they are looking at.
10. Your contact details, so the questions come to you and not to the agent.

The comparables: the rules we do not bend

Comparables are the evidence, and one weak comparable undermines the rest. Two approaches work. The stronger one, where the area supports it, is to pull the average price per square foot for the area and ask the valuer to apply it: if they think your flats are of average standard they have no reason to withhold the average. The second, where the average does not support your figure or there is no reliable average, is a small set of chosen comparables. Even on the average approach, include supporting sales.

• Sold, never asking. Somebody has to have actually paid it.
• Within a quarter of a mile and the last six months is the gold standard. Half a mile if that gives a better and still credible picture. Rarely beyond a mile. Say which radius you used.
• Three to five. Three is the minimum, five is plenty.
• Full address, price and date on every one, so each can be checked in a minute. Size and EPC rating are useful extras.
• Filter, and say that you have. Retirement and over-55 developments, often with "Court" in the name, are restricted and drag an average down. Auction sales are often short-lease or unmortgageable. Take them out, and write a line saying so and why. Silent trimming looks like hiding.
• No hope value. A nearby new-build scheme can be mentioned as context. It cannot be the basis, because unbuilt future value is not something a lender will lend on.
• Sense-check every one before it goes in. Filter by size as well as distance, because a "comparable" that turns out to be a house gets spotted, and once one falls over the valuer stops trusting the rest.

Do not cherry-pick the top of the range either: build the case on a likely day, not your best one, because the valuer will know which it is. And remember that price per square foot holds roughly steady in a normal band and breaks down at the extremes, so very small or very large flats need the strongest comparables of all.

The rents: show them or leave them out

Here is a judgement most people get wrong by default. If the block comfortably passes the lender's rent stress test on the rent it collects today, show both the current rent and the projection, with the reasoning. On our Pembroke Dock block we showed £14,000 a month at the point of valuation, projected to £16,500 by month end and £19,000 by quarter end. The valuer went away and wrote an estimated rental value of £19,500, higher than we had claimed, because every figure we had given him checked out and he trusted the direction of travel.

If the deal is borderline on the stress test, leave the rental data out entirely and let the valuer form their own view of market rent. Some valuers assess market rent rather than the passing rent anyway, which can help on a below-market rent roll. Either way, do not draw attention to a weak story. And be careful with your own rent roll analysis: long-standing tenants are often below market through inertia, while recent re-lets have been repriced on turnover, so a projection built from the newest lettings can overstate what the whole building will achieve.

Which valuer, and how to ask

Two kinds of valuation turn up on a split. A full Red Book valuation, typically a long report costing a few thousand pounds for the whole block, usually ordered by a bridging or commercially minded lender through a specialist panel whose valuers understand blocks, HMOs and title splits. Or a lender's short-form valuation, ordered per flat on the direct-to-mortgage route, costing a few hundred pounds a unit and sometimes nothing. If you are being asked for a Red Book, you are probably heading onto a bridge; if it is short-form per flat, you are probably going straight to mortgages. The memorandum helps either way, and it matters most on the full valuation, where the valuer is being asked to understand the whole structure.

On the panel route you can sometimes influence who comes out. Find valuers who know blocks, at property networking events and through other investors, and then ask your broker to request that valuer by name. Make the request through the broker and not straight to the lender, because a borrower asking for a particular valuer can read as trying to pick the answer, and that helps nobody.

Three days before, and on the day

Send the memorandum about three days ahead. Long enough to be read, short enough to be fresh. Then attend. We go to about eight out of ten of our own valuations, partly to see the building again and partly to correct the assumptions a valuer can make on the spot: a private garden missed because the gate was shut, parking at the back that is not visible from the road, an access route that looks awkward until someone shows you the better one. Walk the valuer round, answer what you are asked, and stop talking when you have answered.

Know your walk-away number before the day. Aim the figure you put forward a little above the minimum you actually need, so a knock-back still leaves the deal standing, and a higher agreed value helps later when you move from the bridge to term mortgages. Then, honestly: if the valuation came in 10% under, would this deal still work? If the answer is no, the memorandum is not the problem.

The line you do not cross

A valuer's duty is to the lender, not to you. Your job is complete evidence, presented clearly, full disclosure on day one, and then silence while they form a view. Your job is never to lean on them for a number, and never, not once, not a little, to alter a document. Get caught doing that and you are finished with that lender and probably with that valuer's whole firm, and deservedly so. The memorandum works because it builds a picture of a serious, data-driven operator rather than someone shooting from the hip. The moment it stops being honest it stops working, and it takes the rest of your credibility with it.

Questions people ask about valuation memorandums

Related reading

• How a valuer decides what your split units are worth. The two valuation bases, the aggregate value, and the four traps that kill otherwise good blocks.
• Can you get a mortgage on individual flats in a split block? The two finance routes, and which kind of valuation each one brings.
• Bridging finance on a title split. Why the bridge valuation is the riskiest step, and what a low number does to the exit.
• The title split checklist. The paperwork to demand early, much of which ends up in the memorandum.
• Title splitting and the Land Registry. What happens to the valued flats once the titles are registered, and how to make that quick.
• The Title Split Boardroom. Session fifteen walks the 2023 memorandum for our forty-flat block section by section, and then yours.