Every Kenyan bank, SACCO or mortgage lender will ask for one thing before it lends against a house or plot: a valuation report. Property valuation for a mortgage in Kenya tells the lender what the property is worth and how much it could recover if the loan went bad. Understanding how the process works helps you prepare the right documents, avoid delays and respond sensibly if the figure is lower than you hoped.
This guide is part of our main article on property valuation in Kenya, which covers valuation methods and how to choose a valuer. Here we focus only on valuations for mortgages and construction loans.
Need a valuation for your mortgage or bank loan? Tell us the town and the lender: WhatsApp 0789 217 685
What is property valuation for a mortgage in Kenya?
A mortgage valuation is an independent opinion of value prepared for a lender. Unlike a valuation you order for your own decision, its main reader is the bank or SACCO, which uses it to decide how much to lend and on what terms. Valuation is one of the recognised disciplines of the surveying profession in Kenya, alongside land surveying and property management, as the Institution of Surveyors of Kenya explains. Practising valuers are registered with the Valuers Registration Board, and lenders normally accept reports only from registered valuers on their approved panel.
Mortgage lending in Kenya is also supported by institutions such as the Kenya Mortgage Refinance Company (KMRC), which is licensed and regulated by the Central Bank of Kenya and refinances eligible mortgage loans made by banks and SACCOs. Whichever lender you use, a credible valuation is part of the file.
Who instructs the valuer, and who pays?
In most mortgage applications the lender either appoints a valuer from its panel or gives you the panel list to choose from. The borrower usually pays the valuation fee, either directly or through the loan account. Before you pay anyone, confirm with your lender:
- that the valuer is on its approved panel;
- whether the report must be addressed to the lender by name;
- how long a report remains acceptable before it must be updated;
- whether it needs any extra values, such as an insurance (reinstatement) value.
Ask the valuer for the fee in writing before the inspection. Fees vary with the value and type of property, so a written quote avoids surprises.
Step by step: how a mortgage valuation works
- Instruction. The lender (or you, from the lender’s panel) instructs the valuer and shares the property details.
- Document check. The valuer reviews the title and supporting documents before or during the visit.
- Site inspection. The valuer visits, measures the buildings, notes construction and condition, checks services and access, and takes photographs.
- Market research. The valuer compares recent sales and rents of similar properties in the area and, where relevant, the cost of rebuilding.
- Report. The report is issued to the lender, usually with market value, forced sale value and, where requested, insurance value.
- Lender decision. The lender applies its own lending policy to the value to decide the loan amount.
Documents to prepare
Missing paperwork is the most common cause of delay. Have copies of these ready:
- Title deed or certificate of lease (and the lease document for leasehold property)
- A recent official search, if the lender requests one
- Sale agreement, if you are buying
- Approved building plans and, for completed houses, the occupation certificate if available
- Survey or mutation map showing the plot
- Land rates or rent clearance where applicable
- For a property under construction: drawings, the Bill of Quantities and the construction contract
- Contact of someone who can give the valuer access on the day
If you are buying, make sure your own checks are done too. Our sister site explains how to conduct a land search in Kenya.
Market value vs forced sale value
Mortgage reports usually show two main figures. Market value is the price the property should achieve in a normal sale between a willing buyer and willing seller. Forced sale value is a lower figure reflecting what the lender might recover if it had to sell quickly, for example after a default. Lenders pay close attention to the forced sale value, which is one reason the amount they offer can feel lower than you expected.
Construction loans: stage valuations
If the loan is to build a house, the lender typically releases money in tranches. Before each release, a valuer inspects the site and confirms the work completed and its value. Good records make this smooth: keep the BQ, stage photos and contractor invoices together. Planning your build in clear stages also helps; see how to build a house in phases in Kenya.
What if the valuation comes in low?
- Read the report. Check that measurements, plot size, tenure and the description of the building are correct.
- Share missing facts. If recent improvements or comparable sales were missed, send evidence to the lender and ask whether the valuer can review it.
- Renegotiate the price. If you are buying, a low valuation is useful evidence in negotiations with the seller.
- Adjust the loan. Increase your deposit or reduce the amount borrowed rather than overstretching.
How long does it take?
Timelines depend mostly on how quickly documents are provided and access is arranged, the distance to the property, and how busy the lender’s panel is. Ask the valuer for an inspection date and report date in writing when you instruct them, and send all documents at the start rather than one by one.
Questions to ask before you instruct a valuer
- Are you on my lender’s approved panel?
- What is your fee, and what does it include?
- When can you inspect, and when will the report reach the lender?
- Which values will the report show?
- Do you know the local market in this town?
Valuations by West Kenya Real Estate
Our valuations are carried out under licensed valuer Ken Otumba; registration details are available on request. We value property for lenders and institutions including Real People Kenya, Kanisa Sacco and Great Lakes University, as well as many individual property owners. We work across Western Kenya and Nairobi; see also our page on property valuation in Kisumu.
Need a valuation for your mortgage?
Send us the property location, the type of property and the name of your lender. We will confirm the next steps, the documents needed and a fee quote in writing.
Or call 0789 217 685 / 0724 481 087.