A glossy valuation report says a London block is worth £20m, so a 25% “discount” makes £15m look like a bargain. Here’s the problem: the report is eighteen months old, the developer behind it went bust, the lender has repossessed, and the number on the page is closer to fiction than fact. If you are buying £1m+ blocks or portfolios, the fastest way to get wiped out is to trust someone else’s valuation instead of sanity-checking it yourself. This is how to tell a real number from a dangerous one before you spend a penny on legals or surveyors.

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Why an old valuation report is dangerous fiction

A valuation is a snapshot of one moment, on one set of assumptions, for one purpose. An eighteen-month-old report was written for a different market, often for the developer’s own funding, and it tells you almost nothing about what the block is worth to you today. Markets move, lending appetite moves, and a distressed block that has sat unsold for a year and a half is telling you something the report is not. When a sale is being marketed off a stale number — “25% below the £20m valuation” — the discount is measured against a figure that may never have been real. The right question is never “how big is the discount?” It’s “discount off what, and says who?”

Flats priced like houses don’t sell

One of the quickest ways a block valuation inflates is when the units are priced as if each flat were a standalone house. In today’s London market that logic breaks down. A block of flats sold as a block competes with itself: a single buyer taking the whole thing is not going to pay the sum of optimistic individual flat prices, because they inherit the concentration, the management, and the exit risk all at once. Price the flats like houses and you get a headline number that looks impressive on paper and finds no buyer in practice. That gap between the paper price and the achievable price is exactly where investors lose years and deposits.

Working back to a number that’s actually real

So how do you get to a defensible figure? You start from what the block would truly fetch in today’s market, not what a report claims. On a deal like this, a realistic open-market value might be closer to half the headline — think in the region of £10m rather than £20m, once you strip out the flats-as-houses inflation and price it as the single asset it is. Then you go further, because as a buyer relying on lending you care about the number a lender’s surveyor will actually support, and how the deal performs as a long-term hold. That can push the figure at which the deal genuinely works down again — closer to £7m in this example — where the yield stacks and the finance holds together. None of these numbers are promises; they are illustrations of a method. The point is that you build the value up from reality, rather than accepting a discount off someone else’s fantasy.

Structuring it so the deal actually stacks

Once you have a real value, the structure decides whether the deal is viable. On a discounted block bought for the long term, a considered finance structure — for example a “90/75” approach that leans on higher leverage going in and a refinance at a sensible proportion of true value later, without relying on an expensive bridge — can leave you with cash still in your pocket rather than trapped in the walls. The mechanics matter, and they are specific to each deal, the ownership change involved, and the lender. What is universal is the sequence: establish the real value first, confirm what a lender will support, then choose a structure that keeps your money working. Do it in that order and you avoid being the next buyer who overpaid against a glossy report.

Sanity-check the deal before you commit

The buyers who avoid disasters on £1m+ blocks are the ones who pressure-test the valuation, the yield and the lending structure before instructing anyone. That is the entire point of getting a specialist eye on it early. This is the finance-and-execution side of a portfolio purchase that almost nobody explains, and it connects directly to how you build a portfolio that holds up under scrutiny and how you structure the SPV a lender will actually back. This article is educational, not advice — the numbers are illustrative and every deal is different.

Book a free Portfolio Fit Review

If you are looking at a £1m+ block or portfolio and want to know whether the “discount” is real before you spend anything, the first step is a free fifteen-minute Portfolio Fit Review. We look at the valuation, the yield and the finance and tell you straight whether the deal stacks and where the risks sit. We are a structured-finance specialist on large portfolio purchases, and we work alongside your tax adviser and solicitor rather than replacing them.

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The guidance contained within this article is subject to the UK regulatory regime and is primarily targeted at customers in the UK. SPV Mortgages does not provide tax or legal advice; we work alongside your tax adviser and solicitor. Your property may be repossessed if you do not keep up repayments on your mortgage.