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1
Q

What are the different methods of valuation?

A

Comparative, Investment, Residual, Profits/Accounts and contractors

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2
Q

What is the Investment Method?

A

Market Rent x Years Purchase (at an appropriate yield) = Market Value

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3
Q

What is the contractors Method

A

Gross replacement Cost less depreciation is the net replacement cost

plus site value is value as existing.

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3
Q

Whats the profits/ Accounts Method

A

Turnover less cost of generating that turnover= net operating profit which is then capitalised.

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4
Q

Define a Yield?

A

-A yield can be simply defined as the annual return on investment expressed as a percentage of capital value.

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5
Q

Give me some examples of statutory Due diligence

A

Asbestos Register, Business Rates, Contamination, Equality Act Compliance, EPC and Flood Risk.

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6
Q

Define Market Value

A

The amount that a property would transaction for on a given date between willing buyer, willing seller, proper marketing and arm’s length transaction. Acting knowledgeably prudently and without compulsion.

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7
Q

Describe a Residual Valuation

A

Gross Development Value, less building costs and development value = Site Value.

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8
Q

What is an initial yield?

A

the net income (or passing rent) at the date of purchase expressed as a percentage of the Purchase Price

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9
Q

What is a reversionary yield?

A

the Market Rent expressed as a percentage of the Market Value (or Purchase Price)

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10
Q

What is an equivalent yield

A

the weighted average of the Initial Yield and the Reversionary Yield

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11
Q

What is an equated yield?

A

It is the overall rate of return, taking into account the growth.

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12
Q

What are the usual acquisition costs?

A

1% agent’s fees, 0.50% legal fees and 20% VAT on agent’s legal fees (0.30%) giving 1.8%

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13
Q

What are the STAMP Duty Numbers

A

0% on First £150,000 - 2% on Next £100,000 - 5% above £250,000

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14
Q

Explain the process of the term and reversion technique?

A
  • We capitalise the passing rent until review or reversion (to market rent)
  • (Do this, by multiplying the passing rent by the YP for the number of years to the reversion)
  • We take the market rent to be received at review/reversion and then capitalise that into perpetuity (gives value at that moment in time) to get the market value.
  • Capitalisation = multiplying by the YP
  • We then defer it further, at a PV of £1, for the period of the term
  • The reversion gets capitalised at market rented rate, but the term gets capitalised at a lower rate due to the lower risk (if over-rented, then term would have higher yield and reversion would have lower yield)
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15
Q

How do you value a property that is over rented?

A
  • Need to capitalise market rent into perpetuity and then capitalise the top-slice income (the over-rented portion) up to review/reversion
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16
Q

How did you calculate developers profit?

A

either 15 - 17% of GDV or 22-25% of total development costs

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17
Q

What are the usual acquisition costs of a development site?

A

Purchase price of the site)

Stamp duty land tax

Acquisition agents fees , Legal fees VAT on the agent and legal fees.

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18
Q

How do you value a leasehold interest?

A

capitalise the profit rent.

(passing rent higher than the market rent.)

capitalise it yp single, yp dual tax adjusted, yp dual. the options are.
What are the two rates in the yp daul rate? accumulative and renumivate rate.

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19
Q

What are the exceptions to MEES?

A

Properties where improvements are not cost-effective (e.g., the payback period
exceeds seven years).
* Buildings listed or in conservation areas where compliance would alter the
character or appearance.
* Temporary buildings with a planned use of less than two years.
* Buildings due to be demolished.
* Certain buildings not required to have an EPC (e.g., places of worship

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20
Q

What are the penalties for not complying with MEES?

A

Local authorities enforce MEES and can issue fines for non-compliance.

  • Penalties depend on the type and duration of the breach but can range up to £5,000
    for residential properties and up to £150,000 for commercial properties.
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20
Q

What does BREEAM stand for?

A

Building Research Establishment Environmental Assessment Method

21
Q

What does BREEAM aim to do?

A

BREEAM aims to assess, improve, and certify the sustainability of buildings based on their environmental, social, and economic impacts. It encourages developers, designers, and building owners to strive for higher environmental standards and sustainability practices.

22
Q

What are the BREEAM Criteria?

A

? Energy, Health and Wellbeing, Management, Pollution, Materials Water and Waste.

23
What are the different BREEAM ratings?
Pass (lowest) to Outstanding (highest), with intermediate ratings including Good, Very Good, and Excellent.
24
What is the BREEAM Certification Process
Licenced BREEAM assessor goes to site and collects evidence to make a determination.
25
How long is an EPC valid for and whens it required?
Valid for 10 years. Required when a building is built, sold or rented.
26
What are the exceptions to an EPC?
places of worship, temporary Buildings standalone buildings with a usable area of less than 50 square meters, buildings due to be demolished
27
Who produces an an EPC?
EPC’s must be produced by an accredited nondomestic energy assessor.
28
Can landlords rent a property with a low EPC?
Landlord cannot rent a property with a rating lower than an E without a legitimate reason.
29
What IBOS?
(International Building Operation Standard) - IBOS uses the latest IoT technology to provide a cloud-based platform to monitor, aggregate and analyse multiple data sets – links into the BMS.
29
Can you tell me of any RICS guidance on Sustainability?
RICS Surveying Sustainability 2007 Sustainability and ESG in commercial property valuation and strategic advice 3rd edition May 2023
30
What is Surveying Safely?
2018 – It is a Practice Statement
31
Whats contained within Surveying Safely?
Relevance to RICS professional groups * Assessing hazards and risks * RICS members places of work * Occupational hygiene and health * Visiting premises or sites * Fire Safety * Residential property surveying * General procurement and management of contractors
32
Can you describe the typical makeup of an Industrial Building?
* Minimum 8m clear eaves height with 10% roof lights * Minimum 30kn psm floor loading capacity (institutional requirement is 40kn) * 3 phase electricity * Plastic coated steel profile cladding with brick or blockwork walls to approx. 2m * Loading & Unloading – Roller Shutter doors (electric or manual)
33
What are typical building defects?
Subsidence, Heave, Wet Rot and Dry Rot.
34
What is IPMS3?
The floor area available on an exclusive basis to an occupier, but excluding standard facilities and shared circulation areas, and calculated on an occupier-by-occupier or floor-by-floor basis for each building.
35
What is the difference between NIA and IPMS 3?
Internal walls and columns are excluded in NIA, and included for IPMS 3 Common walls with adjacent occupier are measured to dominant face in NIA, and centre line with IPMS 3 Enclosed walkways or passages excluded from NIA, but included in IPMS 3
36
What are the main reasons for Property Measurement?
Valuation, Purchase and Sale, Leasing and Letting, Reinstatement Cost Assessments, Business Rates and Property Management
37
What is the Data Protection Act 2018?
UK’s implementation of the General Data Protection Regulation (GDPR)
38
What are the GDPR Principles?
Lawfulness, Fairness and Transparency, Purpose Limitation, Data Minimisation, Accuracy, Storage Limitation, Integrity and Confidentiality
39
What are the rights of Data Subjects?
be informed, access, rectification, Erasure, Restrict Processing, data Portability, right to object
40
Whats the difference between a Data controller and a Data Processor?
A Data Controller determines the purposes and means of processing personal data a data processor processes data on behalf of the data controller.
41
What do you do if there is an Information beach?
If Breach, Inform the ICO within 72 hrs.
42
What are the powers of the ICO?
ICO The ICO has the power to issue fines for non-compliance, which can be significant, reaching up to £17.5 million or 4% of annual global turnover, whichever is higher.
43
What is the Freedom of Information Act 2000?
– any person has the right to request information held by public authorities. Information is allowed unless the exemption outweighs the public interest
44
What are the 7 rules of conduct for members?
1. Ethical behaviour 2. Competence 3. Service 4. CPD 5. Solvency 6. Information to the RICS. 7. Corporation
45
Why do you want to be a member of RICS?
Because of the status, recognition, knowledge and network that it allows me access to.
46
What are the principles of better regulation?
Proportionate, Accountable, Consistent, Transparent, Targeted.
47
What are the key steps in setting up your own practice?
Inform RICS of new practice and register for regulation (by Regulatory Board) Appoint a Responsible Principal for RICS communication Arrange Professional Indemnity Insurance - send details to RICS Set up Complaints Handling procedure - obtain RICS approval Set up Complaints Log Appoint Complaints Handling Officer Appoint Money Laundering Officer Have a locum in place in case of illness/death if sole practitioner
48
How do you identify a conflict of interest?
Financial, personal, commercial and interests of the Firm.
49
What are the 5 rules of conduct?
1. Act with honesty and integrity 2. Professional competence 3. Good quality service 4. Treat with respect and diversity and inclusion 5. Act in the public interest
50
What are the principles of handling clients money?
* The RICS make it clear that it is a firm’s responsibility to ensure that client’s * money is handled correctly. * Accounting systems and client data are securely controlled and protected * Client accounts must be named and have the word ‘client’ in the name of * the account * Client money should be available on demand and should always be in * credit * Details of the accounts must be provided to the client and agreement must * be made in writing if the firm is to retain interest * A ‘3 way’ reconciliation is completed once every month where clients * money is held in a general client account
51
What is a bribe?
Giving, accepting, promising or receiving an advantage such as a payment, gift or service in return for an action which is illegal or a breach of trust

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