What is an RICS valuation?
An RICS Valuation is a professional assessment of the market value of property or land, taking several factors into account. It is often carried out for mortgage purposes, financial matters, building insurance purposes or as part of a building survey to ensure that the property is a sound investment.
Guided by a strict set of guidelines, best practices, ethics and professional standards as set out in the RICS Valuation Standards, often referred to as the ‘Red Book’, it ensures that properties are valued as accurately as possible by considering several factors.
Different from the valuations offered by estate agents, RICS valuations are carried out by experienced Chartered Valuers, who are registered members of the Royal Institute of Chartered Surveyors (RICS).
Whether you’re buying or selling a home, applying for a mortgage, applying for probate or working through a property dispute, you could need an RIC Valuation, it calculates the market value of your property or land and provides a valuation report.
Keep reading to find out more about RIC valuations, including who needs one, how much they cost and how long they are valid for.
How much does an RICS valuation cost?
The cost of a property valuation carried out by an RICS surveyor usually costs from £450. This will depend on a variety of factors including the property value, size and location.
RICS Valuation Quote
How long does an RICS valuation last?
Residential property valuations are valid for a three-month period due to changing market conditions.
Do I need an RICS valuation?
A formal valuation of a property or building should be carried out when required for taxation purposes or legal proceedings. This includes the following:
- Buying or selling a home
- Getting a mortgage
- Probate or transfer of estate
- Tax planning purposes
- Calculating Capital Gains Tax
- Transferring assets into a SIPP pension fund
- Court proceedings such as divorce (Matrimonial Valuation Report)
- Shared ownership
- Disputes being resolved through mediation or arbitration
- Rent reviews or negotiations
What is a Red Book valuation?
A red book valuation is simply another name for RICS valuations. The name refers to the RICS code of practice, the ‘red book’ that explains the rules, guidelines, best practices and ethical standards that chartered surveyors must adhere to when creating their valuation report.
Why can’t my estate agent carry out a valuation survey?
When buying or selling a property, your estate agent may offer to provide you with a property valuation. Although they are professionals and should act accordingly, they will have their own business interests at heart and are not likely to be impartial. Generally speaking, they’ll be most focused on making a sale, earning a commission or earning you as a client so will may be biased.
A Chartered Valuer, on the other hand, is guided by strict rules, regulations and best practices that ensure they remain impartial at all times and provide you with a professional, trustworthy service.
Summary of an RICS Valuation
An RICS valuation provides you with a professional valuation of your property or land. Following strict RICS guidelines and standards and calculated followingusing one of five methods, they provide you with a market value analysis you can trust. For an accurate, professional RICS valuation on your property or land, contact us today.
About Harding Chartered Surveyors
At Harding Chartered Surveyors, we aim to be direct, open, and honest. As members of the Royal Institution of Chartered Surveyors (RICS), we must abide by strict ethical standards. We benchmark ourselves against the client feedback we receive. We deal with complex matters but interpret all the jargon for you to give you a common-sense opinion.
Contact our professional and RICS registered valuers to arrange the valuations that will save you time and money, and make the whole procedure smooth and easy.
What are the five methods of valuation?
There are five methods of property valuation that are globally recognised. Each considers a variety of factors in order to assess the value of a property as accurately as possible. These are as follows:
Method 1: Comparative Method
This is the most common method used when professionally valuing residential property, shops and offices. The valuer uses a selection of carefully chosen factors including comparable evidence and local knowledge to analyse similar properties and calculate an estimated market value. This is the method used for homebuyer reports.
Method 2: Investment Method
For buy-to-rent or commercial properties, the investment method can be useful. It determines the market value of a property based on its potential to generate future income using discounted cash flow techniques.
Method 3: Residual Method
If a piece of land is vacant and/or under development or with development potential and there are no comparable properties available, this method will be used. It uses the gross development value minus the cost to create a valuation report and can vary according to fluctuating costs.
Method 4: Profits Method
As the name suggests, this method estimates the business’ gross profits then deducts expenses. It’s most often used to provide property valuations for pubs, hotels, nursing homes, cinemas and other unique properties without comparable variables.
Method 5: Replacement Cost Method
The replacement cost method is often used by surveyors for specialist properties where other valuation methods cannot be used. This includes buildings such as churches and schools. It considers how much the property would cost to rebuild to its current state, the cost of the land and any other relevant factors.