RICS removes material uncertainty reporting from residential property valuations
The Royal Institution of Chartered Surveyors (RICS) Material Valuation Uncertainty Leaders Forum has ruled that reporting material valuation uncertainty may no longer be appropriate for certain residential properties.
These include: houses of multiple occupancy (HMOs); houses in use by a single person or family; houses in use by up to six people living together as a single household and receiving care; and groups up to six living together as a single household that do not fall under the HMO definition, such as small religious communities or homeowners with lodgers.
Joe Arnold, managing director at Arnold & Baldwin Chartered Surveyors, said: “At the start of the COVID-19 pandemic, surveyors wanted the Material Uncertainty Clause (MUC) included in residential valuations because we were in a period of material uncertainty.
“There was no knowing how long the lockdown would last and whether the market would return in any recognisable form.
“We are now in a position where we can see that the lockdown was just a pause on the market and not a complete reset.
“We now have more than two months’ worth of transactional evidence to show that the market has returned.
“Indeed in some areas, such as parts of London and the wider South East, the market is actually stronger now than it was prior to lockdown and the temporary reduction in Stamp Duty Land Tax will provide a further fillip for property values.
“There is still clearly uncertainty.
“We do not know, for example, what impact increased unemployment will have on the market – but this is more standard market uncertainty than the material uncertainty we experienced earlier in the year.
“It is worth noting that surveyors will still have the option to apply the MUC to a valuation if they have particular concerns about the asset or area.
“This is likely to be reserved for properties where there has been less transactional evidence in recent weeks such as, for example, HMOs or very high value properties.”