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Maybe. Yes. Kinda.
Of course the quality of the renovation makes the house more valuable but no one knows the exact value of anything until someone stumps up and buys that thing. The house with the amazing kitchen might one day sell for less than the house with the shit kitchen another. Depends who is buying that day.
Mortgage company valuers and estate agents can fairly easily get within 5% or so on the type of house that’s regularly sold, but where it sits in that 5% is what the selling process decides. There are too many variables to be more accurate, even on a street of matching Victorian terraces every one has slight differences and if the last one that sold was two months ago maybe the market has risen or fallen since then.
Generally therefore a sale price will need to be >5% above what a mortgage valuer thinks is sensible for them to be confident it’s too dear and to down-value it.
Even if they do down-value a buyer borrowing, say, 50%/£200k of a £400k house might decide to ignore a 10%/£40k down valuation because they really want the house and don’t mind over paying, or they think the valuer is wrong. So long as earnings etc still stack up the lender just sees the £200k loan as
55% of £360k instead of 50% of £400k.TLDR: value of a thing is solely determined by who is buying and who is selling in one specific instance. But no Mash is worth £3000.
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Hefty
Yep, sorry forgot to account for mortgage valuation. But there seems to be (or used to be before recent hikes) some wiggle room even within mortgage valuations. It would be good to know what their criteria are… in my limited experience structural surveys that include valuation are pretty similar to zoopla estimates and yet the house I mentioned above went for £35k extra in not particularly nice area and there is no potential for adding extra value or size as it has been extended to the max. with good quality materials and has a tiny garden (cat litter size). So again whatever floats people’s boats 🤯