Glossary · UK
What is Mortgage Retention?
When a lender holds back part of an agreed mortgage until specified repairs or works on the property are completed.
Full Definition
A mortgage retention is when a lender agrees to a loan but withholds a portion of the funds until certain conditions are met, typically essential repairs or improvements to the property. This often arises after a valuation or survey flags issues such as damp, structural problems, an unsafe roof, or missing essential services. The lender releases the full amount only once the works are completed and, frequently, re-inspected. For the borrower this matters because the retained sum is not available at completion, so you must fund both the purchase and the required works from your own resources in the meantime, which can affect affordability and cash flow. Retentions are common on older or run-down properties and on some buy-to-let purchases. Buyers should clarify the retained amount, the conditions for release, and any deadline early in the process, and budget for bridging the shortfall. It is distinct from a down-valuation, where the lender simply values the property below the purchase price.