Hot Topics Flashcards
Have there been any recently published Guidance Notes that have affected your work?
RICS Guidance Note on Japanese Knotweed and Residential Property, effective, March 2022
RICS Guidance Note ESG & Sustainability in Valuation, eff. Jan 2022
RICS Independent Review of Real Estate Investment Valuations
Economic Crime (Transparency and Enforcement) Act
Withdrawal of global COVID-19 valuation practice alert
Update to EWS1 form and RICS valuation guidance
What does the RICS Guidance Note on Japanese Knotweed say?
- Produced a flow-chart to assist surveyors with their assessment of Japanese knotweed, which leads to four ‘management categories’.
- Its purpose is to limit the number of ‘opportunistic’ claims against surveyors
What is the RICS Independent Review of Real Estate Investment Valuations
- Review was conducted by the Standards and Regulation Board
- Conducted to ensure the Investment Valuation approach remains relevant and trusted
- Review called for greater utilisation of DCF in Investment Valuation
- RICS has said the creation of a formal Valuation Compliance Officer role within regulated valuation providers may be adopted
What is the Economic Crime (Transparency and Enforcement) Act
- the creation of a public register of beneficial owners of non-UK entities that buy or own land in the UK
- the strengthening of the Unexplained Wealth Order (UWO) regime
- the broadening of sanctions law
What does the Economic Crime (Transparency and Enforcement) Act mean for real estate?
If overseas entities don’t register, they won’t be able to become legal owners of the property, because they won’t be able to register their acquisition at the Land Registry.
What does the withdrawal of the Global COVID19 Valuation Practice Alert mean?
Withdrawal of:
- General valuation practice and process recommendations related to COVID-19
- COVID-19 market conditions explanatory note
- Suggested material uncertainty wording related to COVID-19
- Archiving of the Impact of COVID-19 on valuation- Supplement to the RICS Practice Alert. It will have ‘no longer current’ status but will remain available here for information purposes.
What are the updates to the Update to EWS1 form and RICS valuation guidance
The EWS1 form now includes reference that those who have completed the EWS1 Assessment Training Programme are now able to complete the EWS1 form and covers whether interim measures are required
The guidance note is still valid and remains under review by RICS’ independent Standards and Regulation Board.
Any factors affecting development appraisals?
Construction materials costs in the UK reached a 40 year high based on the annual growth of the BCIS Materials Cost Index in Q4 2021 - increased by 20% compared to a year earlier.
Why are construction costs increasing?
- contractors no longer being able to absorb the additional cost of following social distancing
- a number of contractors going into liquidation
- strong upward pressure from input costs
- rising demand
- materials and labour shortages
- logistics problems
How is the war in the Ukraine affecting your work?
RICS Global professional statement “Countering bribery, corruption, money laundering and terrorist financing” requires members to confirm whether a customer or client (or their ultimate beneficial owner) is under any relevant sanctions that would prohibit you from establishing a business relationship with them.
Members and firms should consider the risk to their reputation, the reputation of the profession and the public interest in deciding whether to accept instructions from specific clients.
What does the RICS Guidance Note say on ESG and Sustainability in Valuation?
- Transactional evidence must be considered when adjusting values.
- There continues to be a shortage of evidence demonstrating the existence of either a ‘brown discount’ or ‘green premium’ and, as a result, the guidance note provides a rather ‘flexible’ framework.
- A valuer’s ability to account for ESG factors will be limited, principally due to a lack of available market evidence.
- The likely outcome, therefore, is that the market will naturally adjust for ESG considerations based on transactional evidence, investor sentiment, further regulations and their associated costs.
What is the purpose of the RICS Guidance Note Sustainability and ESG in Valuation?
The Guidance is a first of many steps that will accelerate the incorporation and adoption of ESG best practice and consideration of climate related risks within the wider industry.
When reporting on ESG matters, what must you do?
- Only outline observations of fact which may affect values.
- Know your limitations
- Offer the specialist services of Savills Earth for further commentary
What are the key takeaways from the Levelling Up White Paper
- Minimal detail on planning reform but developing plans for a new infrastructure levy
- National Landlord Register, and bring forward other measures to protect tenants
- Does not contain any new policy measures or funding for net zero.
