Bank lending valuations and mortgage lending value
Published October 2025
Effective from 1 January 2026
This updated professional standard, effective from 1 January 2026, is essential for RICS members providing valuation services for bank lending purposes in or subject to EU jurisdictions. It also serves as a valuable resource for borrowers, lenders and regulatory authorities to better understand the evolving valuation landscape.
The second edition of this standard has been revised to reflect significant regulatory changes, particularly the new Basel 3.1 guidance and the EU's Capital Requirements Regulation (CRR III). These updates introduce ‘prudently conservative valuation criteria’, which will have a major impact on how property valuations are conducted for secured lending.
The standard comprehensively covers:
Market valuation: It clarifies the role of market value as the primary basis for bank lending valuations and its relationship to the new Basel 3.1 criteria.
Mortgage lending value (MLV): The standard addresses the evolving role of MLV, noting its continued use for covered bonds in certain jurisdictions. It also provides a detailed overview of established MLV practices in countries like Germany and Spain.
The RICS valuer's role: It outlines the responsibilities of RICS members in MLV valuations, emphasising the need to explicitly state the valuation basis and methodology and to differentiate MLV from market value.
This professional standard, alongside the related new global RICS practice information on Basel 3.1, Bank lending valuations: Basel 3.1 prudently conservative valuation criteria adjustments, 1st edition, ensures RICS members are equipped with the latest information to navigate the complexities of European bank lending valuations.