The ‘Valuation approach for properties in multi-storey, multi-occupancy residential buildings with cladding’ guidance has been issued by the Royal Institution of Chartered Surveyors (RICS), taking effect from the end of 2022. It was intended to promote a ‘consistent and transparent’ approach in mortgage valuation of domestic residential flats, and thereby (it is hoped) unblock the mortgage market and help owners trapped in unsellable flats.
Campaigners at ‘End Our Cladding Scandal’ were not confident that the move would have the desired effect: “While well-meaning, it will not lead to anything close to a proportionate and consistent valuation methodology for properties caught up in the building safety crisis,” it said.
The guidance and comment flow from the problem some owners of high-rise flats have faced since the 2017 Grenfell fire, due to mortgage lenders being reluctant to lend on the properties.
Dame Janet Paraskeva, Chair of the RICS Standards and Regulation Board, said: “Our role is to safeguard the public interest. The protections brought into law for leaseholders and the pledge made by the lending industry to provide mortgages on properties covered by these protections, have enabled us to provide guidance to valuers, ensuring a consistent approach for their lender clients.”
James Burgoyne of Brunel Professions flagged a note of caution, saying: “Valuers should note the suggested wordings the RICS provided for assumptions and special assumptions and consider carefully whether to include these in their valuation report. The RICS also flagged the need to consider contractual terms around liability, liability capping and third-party reliance.”
The RICS guidance can be found here, whilst comment on the new guidance was issued by Property Industry Eye and Mail Online.
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