Valuation what's new?
As part of RICS' response to the COVID-19 pandemic and its effect on the built environment, each isurv channel has moved to a rolling update cycle to ensure content is as up to date as possible. This page will be updated with new updates to reflect the changing situation as it develops.
RICS has also released guidance in the form of our Beyond COVID-19 guides, available on isurv here:
- Beyond COVID-19: Valuation approaches and evidence during the COVID-19 health crisis
- Beyond COVID-19: Residential valuation physical inspections and surveys
- Beyond COVID-19: Data protection and reopening the property market
- Beyond COVID-19: Inspections and visits for non-domestic properties
Red Book guide
Author Anthony Banfield has now finished his update to the Red Book guide, bringing it in line with the most recent editions of Red Book Global Standards and IVS, both of which came into effect on 31 January 2020.
Newly updated material for autumn 2020 includes:
- Valuations for financial statements
- Valuations for secured lending
- Material valuation uncertainty
- Specialist valuations
- Applying Red Book outside of the UK
- Valuation reports - common practical problems
- Frequently asked questions on the following topics:
This section has been updated to reflect both the primary impacts of COVID-19 (such as declining use of airport car parks) and secondary impacts as a result of government legislation.
This section has been updated to reflect the impact of COVID-19 on care homes and how that may affect the valuation.
While cinemas have of course been affected by COVID-19, updates to this section also reflect longer-term trends such as the move to lower-capacity luxury seating and the emergence of 'boutique'-style cinemas.
Educational premises: children's day nurseries
Educational premises: independent schools
Although golf courses – being overwhelmingly outdoor facilities – have not been quite as badly hit as some other specialist areas, COVID-19 has still had an impact on market size and potential purchasers.
Updates to this section obviously include the impact of COVID-19 on this sector. This is reflected clearly in the updated average hotel market performance in key cities comparison between January-June 2020 and the same period in 2019, as well as some shocking statistics from surveys and reports featured under Impact on trading.
Industrial and distribution properties
Updates here reflect recent changes in RICS and technical guidance, such as the recent publication of the RICS guidance note Valuation of intellectual property rights (2nd edition), and AICPA's Accounting and Valuation Guide: Valuation of Portfolio Company Investments of Venture Capital and Private Equity Funds and Other Investment Companies.
There have been major changes in this sector in the past 5 years, reflected in the Barber Wadlow Forecourt Property Value Index, which is discussed in the Market update subsection, as is the impact of COVID-19, which is expected to be limited once economies reopen fully.
Residential owner-occupier transactions
This section has been heavily updated throughout, with a lot of new material at various points, including a new page on COVID-19 pandemic, lockdowns and advice for residential surveyors.
Updates throughout this section provide added explanation of the points covered. Also, a new subsection, Valuing in a wider uncertain market, looks at the impact of external events (Brexit, COVID-19) on the valuation process.
This year has obviously been an extremely difficult time for retail. This major update therefore unsurprisingly focuses on valuation notifications and market issues, particularly the RICS valuation notification July 2020. The 2020 market addendum provides further advice for valuers.
Also, when it comes to investigations into statutory, town planning and highway matters, 2020 has seen radical changes to use classes with the aim of supporting the retail sector in the face of the COVID-19 pandemic, and these changes are also covered.
Spa businesses have been particularly hard-hit by COVID-19. Not only have they - like many businesses - been forced to close for a large part of 2020, but they also often involve treatments that require close contact.
Therefore, this major update focuses on the impact on trading from the perspective of both the operational measures spa owners/managers must put in place and the specific safety measures service providers must adopt, in order to keep customers safe. Although it is still too early to accurately predict long-term consequences, COVID-19 is expected to have an impact on yield selection.
This section has been updated to include more in-depth discussion of the effects of the Electronic Communications Code (ECC), which author Philip Morris scathingly refers to as 'a sledgehammer to crack a walnut', noting that it 'all but removed the market for amicable commercial agreements over mobile phone mast sites'.
Further information on the rollout of 5G is also included, including the mixed effects of the COVID-19 pandemic: on the one hand, lockdown measures have brought into stark focus our dependence on communications technology; on the other, baseless conspiracy theories have linked the 5G rollout to the spread of coronavirus.
As a response to structural shifts in the market that have been accelerated by COVID-19, RICS has commissioned an independent review of real estate investment valuation practices. Read more and get involved in the process here.
See iConsult to review the latest RICS standards and guidance drafts.