The adage about knowing the price of everything and the value of nothing could easily be the lament of us registered and qualified chartered surveyors in professional practice. Valuations are more than just a number and we often struggle to make the case to clients about the importance of a comprehensive valuation report carried out by a registered valuer.
Valuations are a serious business for a serious purpose and, as such, should be carried out by a RICS registered valuer who knows and adheres to UK and international valuation standards. The RICS Valuation Global Standards are the registered valuers’ bible with mandatory rules and best practice guidance
Valuation reports are required by property owners for a myriad of financial reasons: loan security, due diligence in acquisition or disposal transactions, pension fund management, Inheritance Tax or Capital Gains Tax purposes or regular accounting and financial statement reporting.
In producing a valuation report, a professional valuer will need to source and obtain relevant documentation - such as leases or plans - make at least one site visit to measure and photograph, undertake desktop research into comparable properties’ planning history and rateable values, check and chart any updated or forthcoming legislation or other statutory compliance issues which may affect the property’s current or future value.
As well as researching the property in question’s history and legacy of previous ownership, the process of producing a report might also flag-up opportunities to enhance value: perhaps there may be an opportunity to re-gear the lease, the property may be under-rented with an outstanding rent review that could be implemented or there may potential for redevelopment.
A valuation report may also highlight areas which require attention. For instance, repairs may be recommended to ensure the property remains in good order and marketable. There may be a need to obtain Asbestos Surveys, Energy Performance Certificates (EPCs), Fire Risk Assessments or similar – all in order to meet legislative requirements. Such elements are required before a lender will release funds. Early identification of outstanding issues such as these can prevent unnecessary delays to a transaction.
While there are very clearly defined areas to examine and cover in producing a professional valuation report which meets the required industry standards, it’s far from a tick-box approach. Each property is as individual as its owner. To produce a good quality report usually takes a minimum of eight to 12 hours solid work depending on the size and complexity of the property – most reports are in excess of 20 pages long.
A professional report takes time and money but you can be sure that you get what you pay for.
For more information about valuation services see www.bsm.uk.com/valuations/ or contact Mark Critchley, 01223 467155, firstname.lastname@example.org.