Better oversight for property valuations

A review of property valuations has recommended stronger oversight and stricter rules to support trust in the process.

The review commissioned by the Standards and Regulation Board of the Royal Institution of Chartered Surveyors (RICS) featured several recommendations.

The Board wants to see the introduction of a valuation compliance officer role for firms regulated by RICS when they are undertaking valuations.

They also recommend the introduction of a dedicated valuation panel and further guidance around the culture of firms in the sector, along with the expected behaviour of professionals involved in valuations.

These proposals to strengthen the valuations process will apply to property assets in the UK and overseas, including shopping centres, offices and business parks.

Janet Paraskeva, chairman of the Standards and Regulation Board, said:

The recommended changes for stronger oversight will underpin future stability and market confidence in this major asset class – much of which is funded through pensions and savings – and are therefore very much in the public interest.

Within the report, the Board explained that valuations provided by members of RICS underpin financial reporting and decision making for trillions of pounds of land and real estate assets. The report noted: “a significant amount of which is ultimately funded by consumers through pensions, savings and investments.

By publishing this review, RICS aimed to ensure that valuation services provided by the firms and professionals it regulates remain relevant and trusted.

Peter Pereira Gray, chair of the valuation review, said:

The recommendations will provide stronger assurance with stricter rules governing property valuation. Ultimately, this will deliver the best possible outcomes for markets and the public.

There are 13 different recommendations within the review, including that valuers should ensure that the separation of valuation from advisory activities within firms is consistently applied regarding the use of valuation data and instructions.

The Board also recommends RICS should ensure it has signposted processes for its regulated members and other stakeholders to raise concerns about ethical conduct and address, amongst other issues, improper pressure placed on valuers.