Owning your own home

Same happened with us (35k downvalue).

Maybe play it straight, as you say, and explain transparently that it gives you that extra 5k, so go in 25k less as a starting point. If i was the seller I'd have done those maths and appreciated the honesty / gesture. I'm crap at negotiating though, our sellers barely budged and we borrowed and sucked most of it up.

We've had our house downvalued by our mortgage lender by 30k (~5%) - do we play hardball and just say thats our maximum offer?

To be blunt, fuck off, no.

Although the bank's valuation has the effect of reducing the affordability of the house, your offer is your offer, not the bank's.

That the bank won't lend as much as you want is your problem - from a 'moral' perspective you should not be asking the sellers for anything here, you should find the money. If their position is so weak that they will be willing to meet you somewhere you are then exploiting their position (yeah that old chestnut).

Practically speaking they might meet you somewhere or they might tell you to do one and go to the next buyer on the list, your gamble.

Personally I'd be getting the money together to meet as near to my offer as I felt comfortable with (cash, another lender?) so that when I went back cap in hand they got the impression that I tried and had as few excuses as possible to refuse.

Edit: The implied context here is that you want the house. If you don't want the house, all bets are off.

It really depends how much you want the house and what you can afford but personally I don't think there's anything wrong with going back and saying the mortgage valuation is lower than expected which knocks onto our finances and hence we need to drop our offer by £Xk. You can be very apologetic but that's what the facts are.

The estate agent should be realistic enough to know that will probably knock on to other offers (although I would make that point) and make the point to the vendor. Not dropping by the full £30k would likely get some goodwill but ultimately it's down to what the vendors need out of the sale (maximum money, quick sale, etc)

I would open the conversation with the seller and see where it goes. We’re on the brink of a massive recession and all lenders are tightening their belts and taking extra care. It’s not a time you want to be over paying, if we do go down the shitter as predicted then you could be getting more for your money next year?