Residential Property Surveyors
Association
Peter Bolton King FRICS, FNAEA, FNAVA, CIPS
Global Residential Director
1.
INDEPENDENT REPORT ON VALUATION
By Dr Oonagh McDonald CBE
2.
THE NEW DIPLOMAS
INDEPENDENT REPORT ON VALUATION
“Balancing Risk and Reward: Recommendations for a Sustainable Valuation Profession in the UK”
• Dr McDonald CBE issued her report in January after consulting widely across the
sector throughout last year. Oonagh met lenders, valuers, insurers, lawyers and
regulators to prepare and research her report and received a large number of
written submissions
• Her report contains 12 recommendations which she believes will help address the
challenges facing the sector to help ensure its sustainability.
1. Surveyors on Valuer Registration (VR) should be obliged to report to RICS
immediately on receiving a formal notification of a negligence claim, rather than
just recording this in the annual return
2. Lenders should instruct their solicitors to withdraw notifications of claims (the
‘confetti’ letters)
3. That the introduction of Valuation Specific Professional Indemnity Insurance
(VSPII) and Valuation Risk Management (VRM) or equivalent contingent insurance
products should be carefully assessed and introduced, with recognition by RICS.
4. VSPII requires property inspection data to be captured on a portable electronic
data device. This should have a standard format for use by all lenders
5. The Prudential Regulation Authority specifically places the responsibility of
assessing the value of the property on the lender. Valuers should therefore
carefully examine the contract offered to them for the valuation and its implications
and seek to limit their third party liability, bearing in mind that the valuation of the
property is at a particular point in time.
6. That RICS should retain a register of all the panel management companies and a
list of staff surveyors employed by the companies on an annual basis
7. That panel management companies under the auspices of RICS should set up a
working group, including other stakeholders, to develop a Code of Best Practice for
panel management
8. That all residential surveyors should develop their understanding of Automated
Valuation Models (AVMs) so that they can select an appropriate AVM and ensure
that the appropriate policies are in place for its use
9. That the professional standards set out in the Red Book be amended to include a
requirement for the surveyor’s valuation to be retained in a durable medium, one
copy of which will be retained by the creditor and another copy held by the surveyor
for a period of at least six years
10. One possibility might be to introduce the Home Report in England and Wales. The
Scottish Government initiated a review in December 2013 of the way in which the
Home Report has performed in the first five years of its operation. Await the
outcome of this review
11. The recommendation is that the lender should pay for the valuation report
Marketing and communication of the valuation profession as a career choice needs
to be supported by the RICS, Higher Education Institutes (HEIs) and professionals
from industry
12. Marketing and communication of the valuation profession as a career choice needs
to be supported by the RICS, Higher Education Institutes (HEIs) and professionals
from industry
What was clear was that the sector acknowledged that the balance of risk and reward
for valuation for secured lending work is not right and that this means there is a
serious challenge to the sustainability of the sector. It is in everyone’s interests that we
have enough fully qualified valuers available to carry out this important work but
unless we tackle issues of risk, reward, PII cover etc then there is a risk that younger
surveyors will not see residential valuation as an attractive career option
RICS has had positive feedback from across the sector for facilitating this work – there
is real enthusiasm and commitment from all sectors to address the challenges and
change behaviours to ensure a sustainable valuation profession for the future. This is
in everyone’s interests
So what happened next?
• We held two roundtable groups in February – one for residential, one for
commercial
• We are in the process of setting up two cross-sector groups which will work with
RICS staff and relevant RICS boards to focus on the output from the report and
roundtable sessions. The key themes will be around conflicts of interest and terms
and conditions of engagement/instructions.
• Specific workstreams highlighted by Oonagh’s report will be considered eg
considering Pay as You Go insurance. The groups will work on a task and finish
basis so that momentum is maintained
This is your opportunity to shape and change your profession for the future so post
your comments at the following link: http://www.rics.org/uk/knowledge/newsinsight/news/mark-gerold-frics-reports-back-on-roundtable-discussions-on-theindependent-valuation-commission/
Or
http://tinyurl.com/nmcsp68
Diploma in Residential Surveying(DipRSurv)
Diploma in Residential Valuation (DipRVal)
RICS has worked with RPSA to ensure that both qualifications meet the
requirements for entry to AssocRICS
Holders of the Diploma in Residential Surveying with one year’s relevant experience
are eligible for the RICS Associate Assessment
Holders of the Diploma in Residential Surveying and Valuation with two years’
relevant experience as eligible for direct entry to AssocRICS
The On-Line Ethics module will still have to be taken but cost is included in the
application fee.
Please remember that AssocRICS, along with any other qualification, does not mean
you can carry out ‘red book’ valuations without applying to be a registered valuer
RICS website already shows the new qualifications as being suitable for Assoc entry.
THANK YOU