Bank lending valuations: Basel 3.1 prudently conservative valuation criteria adjustments
Published October 2025
This practice information is a vital resource for RICS members providing valuation services for bank lending purposes globally. It is designed to assist professionals, lenders and regulators in understanding the implications of the Basel 3.1 prudently conservative valuation criteria for their work.
Addressing how these global criteria might impact bank lending valuations, it supplements the RICS professional standard Bank lending valuations and mortgage lending value, Europe, 2nd edition, which focuses specifically on the European context.
The document clarifies the key concepts and criteria for valuation in a post-global financial crisis (GFC) environment, including:
Market value: It reaffirms market value as the primary basis for valuations while addressing its limitations as the sole measure for secured lending.
Long-term value: It explains the concept of long-term value, including its most well-known form, mortgage lending value (MLV). The document highlights the key difference between these models and market value.
Basel 3.1 criteria: The practice information provides a detailed breakdown of the new Basel 3.1 criteria, including the requirement that a valuation must not exceed market value and that adjustments should be made to account for prices that may be ‘significantly above the value that would be sustainable over the life of the loan’.
This document acknowledges that the implementation of these criteria is variable across different jurisdictions. It recommends that valuers identify how their specific jurisdiction has implemented and interpreted the Basel 3.1 guidance before accepting an instruction.
This practice information is part of RICS' commitment to providing up-to-date, relevant guidance to help members navigate the evolving global financial landscape.