Valuation of residential leasehold properties for secured lending purposes
Published 27 May 2021
Effective from 1 July 2021
This guidance note is intended to support valuers undertaking valuations for secured lending purposes on residential leaseholds in England and Wales.
The guidance supplements RICS Valuation – Global Standards (Red Book Global Standards), the UK national supplement 2018, and mortgage specification in appendix 10 of the 2014 edition of the latter, as revised in 2015.
The new guidance note gives practical advice and highlights key considerations for residential leasehold valuation.
The guidance has particular application for valuing diminishing lease terms of less than 80 years remaining, when marriage value becomes payable and, in many markets, there starts to be a material impact on market value.
Although the publication refers to the process for lease extension and enfranchisement, it is not a guidance note for undertaking valuations to that end.
RICS is aware of pending government and regulatory reform of residential leasehold, and it plans to update the contents of this guidance note in due course to take account of such reform. Readers of guidance related to leasehold should therefore familiarise themselves with the latest position before applying any advice.
Erratum: Please note that this guidance note has been reissued on 11 June 2021 to address a typographical error in the relativity calculation on p.21.