The New ‘Red Book’ (RICS Valuation – Global Standards, July 2017

The RICS has now issued new global valuation standards with effect from 1st July 2017 in accordance the new mandatory requirements which supersede the previous UK professional standards of 2014.  This document forms the basis of all ‘Red book’ valuations and incorporates the International Valuation Standards to create market consistency, transparency and comparability as a consequence of globalisation and a vibrant property market which accounts for 70% of the nation’s wealth, 60% of all utilised materials used in construction, 60% of energy used on heating and servicing buildings, 40% of carbon emissions from buildings and 10% of workforce employed within this sector.

The standardisation of valuations globally is required for financial acceptability, benchmarking standards and performance, reduced risk to the valuer and client plus creates comparable standards across the world.  This in turn creates confidence and investment by governments, the public, employers, regulators and investors.  The International Valuation Standards Council (IVSC) is an independent body that sets global standards for valuations, especially those to be relied upon by investors and other third parties including stakeholders.  It also promotes development of the valuation profession around the world and collaborates and cooperates with other organisations concerned with standards and regulation in the financial markets.

The purpose of the ‘Red Book’ is to provide an effective framework within the rules of conduct so the user of valuation services can be confident that a valuation by a RICS member is consistent with IVSC international standards.  The RICS Valuation – Global Standards (2017 Global Red Book) provides RICS members with mandatory requirements and advisory Valuation Practice Guidance Applications (VGPAs).  The RICS Valuation – Professional Standards (2014 UK Red Book) provides RICS members with mandatory and advisory and background information.

The changes to the new ‘Red Book’ include additional VGPAs, additional detail and depth to existing standards, certain aspects of the International Valuation Standards (IVS) have been streamlined, clarification as to what is mandatory, includes additional technical information and addressed a number of topics not previously included.  The new ‘Red Book’ is therefore intended as a handbook for RICS members and valuers and aims to be the definitive guide for the implementation and production of compliant valuations and works with the IVS although the coverage of the ‘Red Book’ extends beyond them by combining professional, technical and performance standards to deliver high quality valuation advice which meets the requirements and expectations of the client, government, regulatory bodies and public.

Stratton Creber Commercial has a specific understanding and knowledge of the commercial property market in the South West region. We receive instructions from all major banks and other lending institutions to provide secured lending valuations of commercial and rural property undertaken in accordance with the RICS Red Book tailored to the particular needs of the lender. We also undertake valuations for advisors, solicitors, charities, companies, partnerships and individuals which are used for a variety of reasons including probate, partnership changes, expert witness, taxation, acquisition / disposal, company accounts or internal purposes.  We would be pleased to discuss your valuation requirements and provide a competitive fee quote for any potential instructions.

Robin Wells, BSc (Hons) MRICS, Associate

RICS Registered Valuer