What Does Below Market Value Mean? A Guide to BMV Property Purchases

BMV property deals can offer real opportunities for savvy buyers.

Below market value deals can work out well, but only if you know what to look for.

Spotting a property listed well under its expected price can set your pulse racing.

Is it too good to be true? Not always.

Below market value (BMV) properties can offer real opportunities for buyers ready to move quickly – whether you’re eyeing your next home or adding to your investment portfolio.

You might wonder why any seller would accept less than their property’s worth.

The reasons vary, from chain breaks to probate sales, but one thing’s constant: these deals need swift action. That’s where many buyers hit a wall.

Mortgage lenders move too slowly for BMV purchases, leaving you watching that bargain slip away.

But there’s good news.

Bridging loans can help you seize these opportunities when they arise. They’re specifically designed for quick purchases, making them perfect for BMV properties where speed matters.

Understanding Below Market Value Properties

A property sells below market value when its price falls significantly under what similar homes in the area would fetch in normal conditions.

In the UK property market, “below market value” often means a discount of 15-25% off the expected sale price – though the exact percentage varies by situation and location.

Professional valuers look at several factors to work out a property’s true market value.

They compare recent sales of similar properties nearby, assess the building’s condition, and consider local market trends. They’ll also factor in things like transport links, school catchment areas, and upcoming developments that might affect prices.

But why would someone sell for less?

A landlord might need to free up cash quickly for their business. Someone handling a probate sale might want a quick, straightforward process rather than months of viewings.

We’ve seen cases where property chains have broken down, leaving sellers desperate to complete their onward purchase – they’d rather take a lower offer than lose their dream home.

You’ll spot genuine BMV deals through certain signs.

The property might need updating but sit in a sought-after area. Perhaps it’s an auction lot with a motivated seller, or a probate sale where family members live far away and want a hassle-free process.

One of our clients recently bought a BMV flat in Manchester when its overseas owner needed to sell quickly due to family circumstances – they saved £45,000 on the market value by being ready to move fast.

Watch out for warning signals too.

If a property’s price seems unusually low, check for issues like short leases, structural problems, or legal complications. Be wary of properties that have bounced on and off the market at different prices, or where the seller can’t explain why they’re accepting such a low offer.

A bridging loan can certainly help you act fast on genuine opportunities – just make sure you’ve done your homework first.

Property Values vs Asking Prices

Asking prices don’t always match a property’s true market value. While some sellers set realistic prices based on solid research, others might pick a number without much basis.

You won’t usually know who chose the asking price or what method they used to set it. An estate agent might have suggested it, the seller might have looked at similar properties online, or they might simply have picked a number they’d like to achieve.

That’s why doing your own research matters so much. Check what similar properties have sold for recently, get professional valuations, and look into local market trends. This homework helps you spot when a price is too high, too low, or about right.

Don’t take asking prices at face value – they’re just the starting point for finding out what a property’s really worth. Good research helps you make better offers and avoid overpaying.

Finding Below Market Value Properties

BMV properties pop up in several specific situations in the UK market. Here’s where experienced buyers tend to find genuine opportunities.

Repossessions often present real BMV opportunities. When lenders need to recover their funds, they’re more focused on covering the outstanding loan as quickly as possible rather than achieving maximum market value. However, these sales can involve complex legal processes and may need fast completion.

Probate sales frequently offer BMV potential.

When someone passes away, their executors might prioritise a straightforward sale over maximum price, especially if beneficiaries live far away or want quick resolution. Building relationships with solicitors who handle probate cases can help you hear about these opportunities early.

Chain breaks create unexpected BMV situations.

A seller who’s found their dream home but lost their buyer might accept a lower offer from someone who can complete quickly to save their onward purchase. Local estate agents often know about these situations before they appear online.

Look out for genuine ‘quick sale required’ scenarios. These might involve divorce settlements, retirement moves abroad, or business owners needing fast capital.

In these cases, sellers often prioritise speed and certainty over maximum price.

Property auctions

Let’s look at how auction properties fit into your BMV property search.

Auction properties are a unique market segment – while they’re not automatically BMV, they can lead to good opportunities if you know what to look for.

Property auctions work differently from standard sales.

The guide price you see in the catalogue isn’t generally a sign of market value – it’s often set low to attract interest. By the time bidding finishes, many properties sell at or above their true market worth.

That’s why you need to do your homework before auction day.

But some auction lots do offer real value. You might find properties that need modernisation, have short leases, or come with sitting tenants.

These factors can put off some buyers, reducing competition and potentially leading to better prices. For example, we recently helped a client buy a run-down shop with upstairs flat at auction.

Most buyers couldn’t get standard mortgages because of its condition, but using a bridging loan, our client secured it at 20% below local market rates.

Speed matters at auctions. When you win a bid, you’ll need to pay 10% immediately and complete within 28 days. Miss that deadline and you could lose your deposit. That’s where bridging loans come in – they can be arranged much faster than standard mortgages.

Before bidding at auction, get a bridging loan agreed in principle. You’ll also want to:

  • Read the legal pack thoroughly
  • Instruct your solicitor
  • Get a survey if possible
  • Set your maximum bid based on true value
  • Factor in all costs, including auction fees

Auction purchases aren’t always below market value

A property is only worth what someone is prepared to pay for it.

So while you think you’ve won a BMV bargain at auction, what you’ve paid could end up being just the market price at the time.

Investors often want a BMV property so they can borrow based on the (higher) value rather than the price paid. Some lenders do offer this option, but only if they agree on the higher price.

Let’s talk bridging loans!

Book your free consultation today and let’s discuss how we can help you achieve your property goals.

Using Bridging Loans for BMV Purchases

When you spot a BMV property, moving quickly can make the difference between securing a good deal and missing out.

Standard mortgages are no good but bridging loans can be arranged in as little as 5-7 days, letting you act fast when speed matters.

But speed isn’t the only advantage.

Bridging lenders can look at the property’s real value, not just its purchase price. If you’re buying a house worth £400,000 for £320,000, they’ll often lend based on the higher figure. This means you might need a smaller deposit than you’d expect.

These loans also work well with properties that need work.

Let’s say you’ve found a house that’s unmortgageable due to its kitchen and bathroom being stripped out. While regular mortgage lenders might say no, bridging lenders understand that these issues can be fixed. They’ll consider your plans to improve the property when making their lending decision.

Key Considerations When Buying BMV

Smart BMV buyers check every angle before they commit.

Start by getting an independent valuation – don’t just rely on local estate agents’ estimates.

A RICS surveyor will give you a clear picture of the property’s true worth and highlight any issues that might affect its value.

The legal work needs special attention with BMV deals. Your solicitor should check for any restrictions on the title that might explain the low price. They’ll look into planning permissions, rights of way, and whether there are any disputes with neighbours. These searches often reveal why a property’s going cheap – and whether that reason should worry you.

Building surveys matter even more with BMV properties. Maybe book a full structural survey rather than a basic homebuyer’s report.

Pay special attention to elements like the roof, foundations, and any signs of subsidence. One of our clients nearly bought a BMV house before a survey revealed £40,000 of urgent repairs – knowledge that helped them negotiate an even better price.

Check local market trends.

  • What are similar properties selling for?
  • Are there any planned changes to the area that could affect values?

Local estate agents and property websites can help build this picture.

Risk Assessment

Every below market value purchase comes with its own set of risks.

Title issues pop up more often than you might think – from flying freeholds to restrictive covenants. Some can be fixed easily; others might make getting a future mortgage tricky.

Property condition needs careful weighing up. That bargain price might reflect serious problems that would cost more to fix than you’d save on the purchase. Get detailed quotes for any work needed before you commit.

Market changes can affect your plans too. If you’re buying to sell on quickly, remember that property values can shift while you’re doing any renovations. Build some wiggle room into your calculations.

Your bridging exit strategy also needs a backup plan.

If you’re planning to refinance onto a standard mortgage, check lending criteria now. If you’re aiming to sell, research how long similar properties take to sell in that area. Having a plan B gives you options and can save you stress later.

Bridging Loans Explained

Bridging loans offer a fast way to buy property when you need to move quickly.

As short-term funding, they last anywhere from 3 months to 2 years, though most run for 6-12 months.

You can borrow from £150,000 right up to £50 million or more.

The exact amount depends on your property’s value and your plans for it. Most people use these loans to buy BMV properties, fund auction purchases, or carry out quick renovations before selling on or refinancing.

Lenders will usually offer up to 75% of the property’s value, even if you’re buying it for less.

So if you’re eyeing a property worth £400,000 but paying £300,000, they’ll look at the higher figure. Some lenders stretch to 80% for strong cases, while others might ask for more security if you want to borrow more.

Who can get a bridging loan?

They’re open to individuals, companies, SPVs, and partnerships. Age limits start at 18, and while some lenders cap at 75, others have no upper age limit.

Your credit history matters less than with standard mortgages – lenders are more interested in your property and how you’ll pay back the loan.

Speaking of repayment, you’ll need a clear exit strategy. Most borrowers either sell the property or switch to a long-term mortgage. Lenders will want to see that your plans make sense before they approve your loan.

The property itself needs to be in England, Wales, or Scotland. It can be residential, commercial, or even land – though different rules apply to each type.

Remember that bridging loans cost more than standard mortgages because they’re so flexible and designed for short-term use. But when you spot a genuine BMV opportunity, they can help you act fast and secure a good deal.

How a Broker Helps with BMV Purchases

Getting a good BMV deal isn’t just about finding the right property – it’s about having the right support team.

A specialist broker brings insider knowledge that can make your purchase smoother and faster.

Many BMV deals need lenders who think differently.

High street banks shy away from these purchases, especially if the property needs work or you need to complete quickly, it’s just too risky for them.

A good broker knows which specialist lenders suit different scenarios – whether you’re buying at auction, handling a probate purchase, or snapping up a property that needs renovation.

They’ll also help you present your case properly.

Under-value properties often need extra explanations to lenders about why the price is low and how you’ll add value. Your broker will package this information in a way that makes sense to lenders, helping you get better terms and faster decisions.

Of course when you find a genuine opportunity, you want to move fast. Brokers can speed things up by knowing exactly which lender suits your situation, what paperwork they’ll need, and how to handle any quirks in the valuation process.

Application Process

Getting a bridging loan for your BMV purchase starts with a quick chat about your plans.

You’ll need basic information about the property, its value, and how you’ll exit the loan. Your broker will use this to find suitable lenders.

The first thing to establish is whether the price you’ve agreed is actually below the usual market value.

From this point your broker can approach some lenders and then see who looks the most suitable for your needs.

Then you will complete a formal application and the lender starts their assessment. This usually begins with a credit check and then booking a valuation.

Meanwhile your solicitor will need to do their bit, checking the Land Registry details, local searches and contracts.

Bridging lenders can process loans really quickly, often in just a few days. But the legal work still needs to be completed, so many loans won’t start for 1-2 weeks.

Read more: The Bridging Loan Application Process Explained

BMV properties can offer great opportunities if you do your homework and move quickly.

While they’re not all massive bargains, having a bridging loan ready means you can act fast when you spot a real deal.

Success comes down to careful research, solid exit planning, and having the right support team. A specialist broker can guide you through the process, find the right lender, and help you avoid common pitfalls.

Ready to look for BMV opportunities?

Start by talking to a broker about getting a bridging loan agreed in principle. That way, you’ll be ready to move when the right property comes up.

FAQ

Genuine BMV deals usually range from 15-25% below market value. The exact percentage depends on factors like property condition, location, and reason for quick sale.

Get an independent RICS valuation and check recent sold prices of similar properties nearby. Local estate agents can provide insights, and Land Registry data shows actual sale prices.

Standard mortgages can be harder to secure on BMV properties as lenders often question why the price is low and want to lend against the purchase price. Bridging loans are more suitable as they’re designed for these situations.

There are several genuine reasons why property owners accept lower prices.

When someone needs to sell after a divorce, they often want the property sold quickly to move on with their lives. We helped a client buy a three-bedroom house in Leeds last year where the divorcing owners accepted 15% below market value to achieve a fast, clean break.

Probate sales frequently lead to BMV opportunities. When someone passes away, their beneficiaries might live far from the property. In one case, two sisters living in Australia sold their late father’s London flat at 20% below value because managing a UK property sale from abroad was too challenging.

Business cash flow needs drive some BMV sales. A property developer might sell one project below value to free up money for a time-sensitive opportunity. For instance, a local builder recently sold a newly renovated house at 12% below market price because he needed capital for a promising commercial project.

Chain breaks create urgent situations too. Imagine you’ve found your perfect home and are about to lose it because your buyer pulled out. You might well accept a lower offer from someone who can move quickly to save your dream purchase.

Other common reasons include:

  • Moving abroad for work
  • Paying off urgent debts
  • Properties needing extensive repairs
  • Retirement planning
  • Portfolio restructuring by landlords

The key point? These sellers prioritise speed and certainty over maximum price. They’re making a conscious choice to trade some equity for a faster, simpler sale.

But remember – always check why a particular property is offered below value. A genuine seller should be able to explain their situation clearly, and their reason should make practical sense.

Yes, auctions can offer BMV opportunities, but properties often sell at market value anyway due to competitive bidding. Research thoroughly before auction day.

Most lenders require 25-30% deposit, though some may ask for more or less depending on the property and your exit strategy.

Read more: Do You Need a Deposit for a Bridging Loan?

Yes, bridging lenders work with individuals, SPVs, limited companies, and partnerships for BMV purchases.

Read more: Getting a Bridging Loan Through Your SPV

Let’s look at how to identify genuine BMV opportunities from misleading ones.

First, check the price history. Look up the property on Rightmove or Zoopla to see its previous selling prices and listing history. A house that’s been listed multiple times with falling prices might indicate problems rather than a true bargain.

Research local sold prices using the Land Registry.

If similar properties nearby have sold for significantly more, ask why this one’s so much cheaper. Sometimes there’s a valid reason – but if the seller or agent can’t explain the discount clearly, be cautious.

Watch out for these warning signs:

  • Pressure to decide quickly without proper viewing time
  • No access to full structural surveys
  • Sellers who won’t allow your solicitor to do searches
  • Properties marketed only through BMV networks
  • Unusually high service charges or ground rents
  • Claims of guaranteed rental income

Here’s what genuine BMV deals often share:

  • Clear reason for the quick sale (divorce, probate, etc.)
  • Full legal access for surveys and searches
  • Sellers who are open about any property issues
  • Verifiable market values of similar properties
  • Transparent communication about price and terms

Get independent advice. A RICS surveyor can give you an unbiased valuation. Local estate agents often know the area’s true values and any problems with specific properties.

Remember, if the discount seems too steep with no clear explanation, there’s usually a catch. Genuine BMV deals exist, but they rarely come through unsolicited offers or property clubs.

Still have more questions?

Just give us a call on 0330 030 5050 to get matched with an expert.
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