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RICS issues updated guidance for residential block valuations

  • 06/12/2022
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RICS issues updated guidance for residential block valuations
The Royal Institution of Chartered Surveyors (RICS) has issued updated guidance for the valuation of multi-storey buildings, which it said would bring clarity and confidence to the mortgage market.

This builds on its guidance which was published in 2021 and advised surveyors about how to identify when a property might need remediation by instructing an EWS1 assessment. At the time, the body said this would “unlock the market”.

In response, lenders stated their willingness to lend on blocks of flats but continued uncertainties around associated costs and the timeframe for works to be completed failed to relieve industry caution. 

The new guidance released today is against the backdrop of the Building Safety Bill which now limits how much leaseholders must pay towards cladding remediation and other safety related costs. It also considers property owners who have either applied for funding to complete construction or committed money to cover these costs. 

If a fire assessment has been completed and the need for works has been identified, RICS said a valuer could assume that these costs will also be included in the capped limits. 

It must also be assumed that any disruption will be temporary and have no material impact on the property’s value. 

The likely desirability of a property which requires works must be considered and set out in a surveyor’s valuation report. 

The guidance is effective from 6 December and applies to residential blocks in England which are five storeys or over, or 11 metres tall or more. The policy can apply to shorter properties alongside the information from last year’s guidance, depending on an agreement between the surveyor and the lender regarding the valuation approach. 

RICS said: “As the number of sales and purchases increase on this property type, the evidence base will grow, giving valuers and lenders more certainty in their valuations. This in turn will bring confidence to the housing market on these types of properties.” 

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