Hot Topics

Question 1

Are you aware of any key updates to the RICS Leadership Team?

Answer 1

• Tina Paillet FRICS is RICS President
  –
• Justin Sullivan FRIS is President Elect

Question 2

Please explain your understanding of the term ‘Placemaking’?

Answer 2

• Placemaking is a holistic approach to the development of public spaces that considers planning, design, implementation and management.
• This aims to deliver public spaces that offer unique value to their occupants such as:-
  o A greater sense of belonging.
  o Increased security.
  o A unique atmosphere.
  o Inspiration and experience.
  o A sense of pride in community.
• The concept is thought to result in an improved quality of life to occupants, greater happiness, better work productivity and a possible increase in property values.

Question 3

Are you aware of any guidance that applies to RICS Members when using Social Media?

Answer 3

• The RICS introduced the Guidance Note ‘Use of Social Media: Guidance for Members Version 1.
• This took affect from 30th June 2021.
• The Guidance note sets out the same standards as stipulated in the RICS Rules of Conduct and reminds members that these do not change whether communicating via social media, face to face or traditional forms of media.

Question 4

How do you ensure you operate inline with RICS guidance on the use of Social Media?

Answer 4

• I am always sure to use social media in a responsible and professional manner in the same way that I communicate via face to face or other written forms of communication.
• I am sure to use professional and respectful language when communicating and understand the responsibility in representing the RICS.
• I would never make a post that is dishonest or would cause offence in any way.
• I realise that this could potentially undermine public confidence and trust in the profession.

Question 5

When would the RICS investigate a Social Media post made by one of its members?

Answer 5

An investigation may take place if a social media post is:-
o Discriminatory.
o Dishonest.
o Abusive or threatening.
o Likely to cause significant harm, distress or offence to a person.
o Shows a pattern of frequent or large number of concerning communications.
o Ignores previous advice or warnings about concerns.

Question 6

Please explain your understanding of the recent updates to RICS Professional Indemnity Insurance Cover around Fire Safety?

Answer 6

• During 2019 fire safety insurance cover was removed from the professional indemnity insurance market following the Grenfell Disaster.
• This followed an increase in insurance claims with insurers applying blanket fire safety exclusions.
• Many surveying firms were unable to obtain fire safety cover leaving them exposed on previously completed instructions and non protected for future work.
• During 2020/21 the RICS worked with insurers to restrict blanket fire safety exclusions.
• The RICS agreed with insurers in May 2021 that fire safety exclusions could be used however these would not apply to work on properties with four or fewer storeys above ground level.
• This is contained in the agreement that all insurers sign if they want to participate in the RICS insurance market.
• Cover for completion of EWS1 forms remains excluded from RICS’ policy wording.
• There is limited protection for professionals completing EWS1 assessments on a case-by-case basis at insurers’ commercial discretion.

Question 7

Please explain your understanding of the RICS Inclusive Employer Quality Mark?

Answer 7

• The RICS is launching a scheme known as the Inclusive Employer Quality Mark.
• This is designed to improve diversity and inclusion within the property and construction sector.
• The scheme requires employers to pledge their commitment to adopting and continually improving against the following six principles:
  o Leadership and Vision.
  o Recruitment.
  o Staff development.
  o Staff retention.
  o Staff engagement.
  o Continuous improvement.
• Participating firms will be required to assess their performance against the criteria on a bi-annual basis.
• RICS will use the assessment information to document the outcomes and trends for the profession as a whole.
• Participating firms are able to use the branding of, ‘Signatory to the RICS Inclusive Employer Quality Mark’.

Question 8

What are your views on the Pro’s and Con’s of Hybrid Working?

Answer 8

• Advantages:-
  o Improved work–life balance.
  o Greater ability to focus with fewer distractions.
  o Saved commuting time and cost.
  o Savings on office space.
  o Higher levels of employee job satisfaction.
• Disadvantages:-
  o Loss of social connection.
  o Reduced collaboration.
  o Productivity can be dependent on quality of workspace.
  o Less recognition.
  o Risk of burnout.

Question 9

Please explain your understanding of the importance of Hart vs Large caselaw?

Answer 9

• This was a high court case relating to a dispute between the purchasers, Mr & Mrs Hart, and their surveyor, Mr Large.
• Large had carried out a Level 2 Home Buyer Report on a property based in Devon.
• Mr & Mrs Hart experienced problems with damp and water ingress resulting in a claim against Large.
• The court ruled that Large was negligent as he:
  o Failed to identify the issues relating to damp.
  o Failed to advise the purchaser to obtain a Professional Consultants Certificate.
  o Failed to recommend further investigations were undertaken regarding the condition of the property.
• This case is important for surveyors as it highlights the need to:
  o Report on any building elements that have not been inspected, including an explanation as to why this is the case.
  o Recommend further investigations are carried out if the surveyor has a suspicion that a visible defect may affect other concealed building elements. -“Where there is a trail of suspicion, a surveyor must take reasonable steps to follow that trail, which may include recommending further investigations.
  o The need to strongly recommend that a Professional Consultants Certificate should be obtained prior to purchase on recently refurbished properties to protect the property purchaser from concealed defects.

Question 10

Please explain your understanding of the Birchard Review?

Answer 10

• The Birchard Review was an independent review commissioned by the RICS Governing Board in December 2021 into the purpose, governance and strategy of the RICS.
• This was commissioned following the Levitt Review and aimed to create a new sense of purpose and direction of the RICS.
• The review advised on 36 recommendations that are currently being implemented which include:
  o Commercial Activity will now be separated from other activities within the RICS and led by a suitable qualified executive with strong commercial experience who reports to the Commercial Committee.
  o RICS Matrics should give younger members a stronger voice through an improved governance structure with an appropriately selected representative from the community of younger members to sit on the Governing Council.
  o A Diversity and Inclusion Panel will be setup to provide advice to the RICS Board and Standards and Regulation Board.
  o Improvement of Technology within the RICS.
  o A Public Interest Panel will be setup to advise the Governing Council.
• The Governance Structure will be updated to include a Public Interest Panel, Sustainability Panel, Commercial Committee and Audit, Risk, Finance & Assurance Committee.

Question 11

Please explain your understanding of how the RICS define Professional Standards vs. Practice Information?

Answer 11

• Following the Birchard Review and its recommendations the RICS have introduced two new definitions for Professional guidance which are now split into Professional Standards and Practice Information.
• These supersede the former definitions including Professional Statements, Guidance Notes and Codes of Practice etc.
• Professional Standards - set out requirements or expectations for RICS members and regulated firms with a focus on baseline expectations for competence and ethical behavior. They contain mandatory requirements that surveyors must follow, where the word ‘must’ is used with best practice that surveyors should follow, where the word ‘should’ is used.
• Practice Information – set out supporting guidance to advise surveyors in delivering specific services or working in specific areas of practice. The guidance is not mandatory and does not provide explicit recommendations. Practice Information can refer to processes, toolkits, checklists, insights, research and technical information or advice.

Question 12

Please explain your understanding of the guidelines around use of the RICS Logo?

Answer 12

• I am aware of RICS guidelines which are split into:
  o Rules of Conduct for Firms use of the RICS logo and designation.
  o Guidelines for Personal Use of the RICS logo.
• These guidelines contain detailed information regarding correct usage which is approved by the Standards and Regulation Board.
• As a qualified RICS member you have the right to use the logo for personal use for example on Business Cards & Personal E-mail signatures.
• There are specific rules around how the RICS master logo is presented for example the font and colour must not be adjusted and there should be a minimum clearance around the logo equivalent to the size of the capital R in RICS.

Question 13

What is IPMS?

Answer 13

• IPMS stands for the International Property Measurement Standards.
• The IPMS is a coalition of 80 global professional organisations that was first formed in 2013 when it produced its first version of its measurement standards.
• There were various versions of the standards that are targeted at industry specific sectors such as:-
  o IPMS Office.
  o IPMS Residential.
  o IPMS Retail.
• IPMS All Buildings was introduced in January 2023 and now supersedes all previous standards.
• The RICS has been a pivotal member of the coalition since its inception and provided consultation and advice to its members.

Question 14

Please explain your understanding of the recent IPMS Updates?

Answer 14

• IPMS All Buildings was introduced in January 2023 and now supersedes all previous standards and applies to all buildings irrespective of their use or sector class.
• Key Updates to this latest standard include:-
  o A shorter and more concise format has been adopted.
  o Definitions set out within the standards were made to be deliberately unique in an attempt to prevent confusion amongst existing standards across global markets.
  o The IPMS is organized into 4 volumes that can be utilised by different professional groups in various scenarios.
  o This is thought to encourage the adoption of the standards on a global scale as some markets were slow to incorporate IPMS and called for one simplified version of the standards.

Question 15

Please explain your understanding of the key definitions set out within the IPMS?

Answer 15

• Internal Dominant Face – The inside surface area comprising more than 50% of the lowest 2.75m measurement vertically from the structural floor surface, or to the ceiling if lower, for each wall section.
• Component – One of the main elements into which the floor area of a building can be allocated.
• Component Area – The floor area attributed to one of the components.
• Standard Facilities – Shared areas in a building that typically do not change over time, such as circulation areas, stairs, escalators, lifts/ elevators, toilets, cleaners cupboards, plant rooms, fire refuge areas and maintenance rooms.

Question 16

What is your view of the IPMS Updates?

Answer 16

• I think the IPMS when established globally will provide an extremely useful set of measurement standards that will hopefully negate ambiguity across international markets.
• In reality this is proving very difficult to achieve due to the existing preferences in place in each market place.
• For example the UK has been slow to adopt the IPMS due to a familiarity and preference of the existing standards.
• I am also awaiting the updated RICS Professional Statement for Property Measurement to find out how the Institution and experts within the profession view the updated IPMS.

Question 17

Following the Grenfell Disaster are you aware of any guidance the RICS has published to support fire safety?

Answer 17

• I am aware that the RICS has published the Guidance note ‘Cladding for Surveyors 1st Edition March 2021’ to support surveyors working on Multi-storey and multi occupancy residential buildings.
• The document aims to improve surveyors knowledge of external wall cladding systems that may be considered within the External Wall Fire Review.
• Whilst the document is useful and provides illustrated examples of cladding systems, I appreciate that fire safety is of great importance and ultimately falls outside my area of expertise. If my clients do ask for advice on first safety I would always recommend that they seek advice via a professional fire risk assessment.

Question 18

What is ACM cladding?

Answer 18

• ACM standards for aluminum composite material
• It consists of two skins of aluminum bonded to either side of a lightweight core of materials such as polyethylene or a mineral core aimed to provided insulating properties.

Question 19

What is the significance of ACM in relation to Grenfell?

Answer 19

• The ACM cladding in use was thought to contain combustible materials that contributed towards the spread of fire across the external elevation of the building.
• As a result the UK government has now banned the use of combustible materials on high rise homes from 29th November 2018.
• The ban means that combustible materials are not permitted on the external walls of new buildings above 18m.
• Local authorities also need to undertake remediation works to replace dangerous ACM cladding on existing buildings.

Question 20

What is an EWS1?

Answer 20

• An EWS1 is an External Wall System Fire Review Certificate.
• They are applicable when a multi-storey residential property is either being bought, sold or re-mortgaged.
• It is not a building safety certificate but a re-mortgaging valuation tool.
• The RICS and mortgage lenders jointly formed the EWS1 form as a way of mortgage lenders assessing the external wall safety of buildings over 18m in height.

Question 21

What is the New Fire Safety Act 2021?

Answer 21

• The First Safety Act was introduced in March 2020 and holds significant legal obligations of organisations deemed to be responsible persons.
• It is introduced as an update to the Fire Safety order 2005.
• The main focus of the act is the amendment of the Fire Safety Order to clarify that it will apply to the structure and external walls as well as anything attached to external walls such as doors, windows and cladding.
• Under the previous regime it was unclear who was responsible for fire safety compliance for these elements of the building.
• This will force owners, landlords and managing agents of multi-occupied residential buildings to take precautions to identify any dangerous cladding on those buildings and remediate any dangerous materials whilst introducing interim measures to ensure the building can be occupied safely.

Question 22

Are you aware of some of the aims highlighted within the RICS Business Plan for 2024?

Answer 22

Incorporating the Levitt Report Recommendations
* Following acceptance of the Levitt Report recommendations in full the RICS looks to:-
o Be more open and transparent with members and the public about the operation of the institution including decision making and finances.
o Developing and implementing new, more effective, internal whistleblowing arrangements
o Reviewing the arrangements for senior executive reward.
Immediate Financial Priorities
* Continue to support the profession as economies recover from Covid-19 and seek to minimise any increases in the cost of subscription levels.
* Utilise any surplus in cash generation to pay back furlough monies received via the UK government’s Coronavirus Job Retention Scheme.
* Reduce RICS’ need to access external financial support
* Reduce any funding deficit in the closed Final Salary Pension Scheme.
Corporate Objectives
* Maintain and increase demand for RICS qualifications with a primary goal to ensure RICS qualifications remain relevant for future generations and that increased numbers of members use RICS to meet their knowledge and training needs.
* To ensure members remain involved and engage with increased participation in RICS communities with increased engagement beyond renewal of professional subscription fees.
* To be recognised as a sustainable 21st century professional body with improved financial sustainability and enhanced transparency of internal governance, while improving the overall satisfaction of members and the engagement of our people.
Geographic Priorities
* Outside the UK Greater China continues to be the RICS’ largest strategic market with India, North America, the Middle East, Europe and Australia providing notable opportunities.
* Many of these markets have positive characteristics such as a major focus on attracting inward investment and significant commitments to infrastructure spending.

Question 23

Explain your understanding of Rule Number 1?

Answer 23

• Having reviewed the example behaviors in adhering to Rule 1 RICS Members and firms should not allow themselves to be influenced improperly through the acceptance of work referrals, gifts or hospitality.
• Members and Firms must also be sure to identify conflicts of interest and not provide services or advice where these conflicts of interest occur.
• This could be a scenario where you have reduced impartiality due to an existing relationship, for example being friends with a Main Contractor who has subsequently been selected to submit a tender would form a conflict of interest.

Question 24

Explain your understanding of Rule Number 2?

Answer 24

• To ensure compliance with Rule 2, Members and firms must only act for clients where they have the necessary knowledge, skills and resources to carry out the work competently.
• Firms must supervise any employees or subcontractors undertaking work on their behalf, for example requesting that a Junior Surveyor undertakes a complex valuation due to resourcing issues would create problems in achieving compliance with this Rule. Instead an experienced and suitably qualified surveyor should be asked to undertake the valuation.

Question 25

Explain your understanding of Rule Number 3?

Answer 25

• As an RICS member or regulated Firm we must also be sure to understand a clients’ project specific requirements before acting on their behalf. The clients’ scope of services should be agreed along with any exclusions and timescales for achieving each of the deliverables before signing up to formal terms of engagement.

Question 26

Explain your understanding of Rule Number 4?

Answer 26

• The RICS also expects its members to respect the rights of others and treat others with courtesy.
• We need to ensure that everyone is treated fairly and look to eliminate any instances of discrimination on the basis of age, disability, gender, pregnancy, race, religion or sexual orientation.
• RICS members and firms also need to adopt a no tolerance policy of bullying or harassment.

Question 27

Explain your understanding of Rule Number 5?

Answer 27

• Members and firms are required to question practices and decisions that they suspect are not right and raise concerns with colleagues, senior management, clients or the RICS.
• When making public statements we need to ensure these do not undermine public confidence in the profession.
• When receiving and processing complaints, we need to ensure these are dealt with promptly, openly and professionally.
• In complying with Rule 5, a useful sense check to ensure compliance is to ask ourselves if we would be comfortable in standing behind our actions if these were brought into the media or a public forum.

Question 28

Are you aware of any impending changes to minimum energy efficiency standards?

Answer 28

• Yes I understand the government has recently proposed changes to the EPC requirements for commercial property and buy to let properties which are due to take effect from 2025.
• Currently the minimum required energy efficiency rating for domestic rental property requires an E rating however this is expected to increase to a C rating or above from 2025.

Question 29

Please explain your understanding of Green mortgages?

Answer 29

• A mortgage that rewards someone for buying or owning an energy efficient home by offering favorable terms than as standard.
• This typically result in lower interest rates or receiving cashback when you take out the mortgage.

Question 30

What is Urban greening factor?

Answer 30

• The urban greening factor is a tool that evaluates and measures the amount of urban greening (vegetation cover and planting around buildings) to aid the appropriate planning of greening on future developments.
• The aim is to increase the amount of green cover around buildings and support its consideration at the design and outset of developments.
• Councils can develop their own targets with the plan for London being a target score of 0.4 for residential developments and 0.3 for commercial developments.

Question 31

What is the Levitt Report?

Answer 31

• The Levitt Report was commissioned by the RICS following a Treasury management audit in 2018.
• Prior to the Audit the RICS had to extend its overdraft facility by circa £3m due to inaccurate cashflow forecasting.
• The treasury management audit offered a ‘no assurance verdict’ on RICS internal financial control procedures and following this the Levitt report was commissioned as an independent review.
• The conclusion of the Levitt report illuded to an internal power struggle due to its two board structure made up of a Management Board and Executive Board.
• Following the report, the RICS accepted each of Levitt’s recommendations including:
  o The RICS Governing Council are to have more oversight over internal dealings of the RICS.
  o The RICS Governing Council are to be briefed by the Management Board as opposed to a single CEO.
  o The RICS Governing Council are to oversee executive management bonuses.
  o The report called for greater transparency as the CEO could have involved the management board in order to rectify the treasury issues.
  o No evidence of improper or illegal conduct was discovered.

Question 32

What is meant by the term embodied carbon?

Answer 32

• Embodied Carbon refers to the carbon emissions generated as a result of energy consumption and chemical processes during the extraction, manufacture, transportation, assembly, replacement and deconstruction of construction materials or products.
• In construction terms, embodied carbon is the resultant emissions from all the activities involved in the creation and demolition of a building less the operational carbon impact.

Question 33

What is the RICS futures report?

Answer 33

• In 2015 the futures report was launched and highlighted key trends such as urbanisation, the disruption of big data and technology on the sector and the climate crisis as presenting key challenges to the property and construction industries.
• The futures report aims to ensure that the surveying profession is ready to act in the publics interests in addressing global challenges.
• Since 2015 the RICS have analysed these trends by engaging with the profession to keep its members best informed on how to address these key challenges.
• Resulting findings highlighted in the 2020 futures report include:-
  o Construction produces the second largest amounts of data behind financial services however it is estimated that 95% of this is currently wasted. The RICS is setting up an innovation and technology hub to provide a centre of expertise on how data can be put to good use.
  o The rapid urbanisation in China was also highlighted where formation of mega-cities is creating key challenges. The amount of land classed as urban has doubled since 2000 resulting in polluted, congested and expensive areas. The RICS aims to encourages it members working in these regions to adopt a more sustainable approach to the development of these areas through utilsation of outer urban areas.
  o The rapid increase in the use of drones within the industry was also highlighted as presenting key challenges in terms of compliance issues for surveyors taking into account current and emerging regulatory trends, national and international legislation standards. The RICS has developed online courses to support surveyors in this area to ensure the technology is being utilised efficiently, safely and legally.

Question 34

Are you aware of any RICS Guidance covering the use of drones?

Answer 34

• Yes the RICS has produced ‘Drones: applications and compliance for surveyors’.
• This provides advice on the different types of drones available, how they can be applied within the industry and advice on current industry legislation.

Question 35

What different types of drones are you aware of?

Answer 35

Drones with mounted optical cameras are used to monitor the external envelope of buildings and infrastructure.
* Drones with thermal or heat detection sensors are also available however a qualified thermographer may be required to interpret the results. This may be radiometric data where a specific temperature is provided for each pixel or non-radiometric data which shows a general temperature differences.
* LiDAR Airborne laser scanning technology is also available for topographical surveying and mapping.

Question 35

What legislation applies to drone operators in the UK?

Answer 35

• The use of drones is covered under several pieces of legislation in the UK however regulators are currently in catch up mode due to the rapid evolution of this technology.
• Key pieces of legislation include:-
  o Air Navigation Order (ANO) 2016
  o Air Navigation (Amendment) Order 2018
  o Data Protection Act 2018
  o Aviation and Maritime Security Act 1990
• It is important for surveyors to have a familiarity of the regulations in places where general aviation rules specify that:-
  o A person must not recklessly or negligently act in a manner likely to endanger an aircraft, or any person in an aircraft and;
  o A person must not cause or permit an aircraft to endanger person or property.
  o The Civil Aviation Authority specify that commercial drone operators must have a PfCO (Permission for Commercial Operations) issued by the CAA before conducting any operations.

Question 36

What is meant by the term inclusive design?

Answer 36

• Inclusive design aims to ensure that the differences in the way people use the built and natural environment can be accommodated for through dignified, equal and intuitive use by everyone.
• Inclusive design is the responsibility of everyone who works in the built environment: planners, those who commission new buildings and places, access consultants, designers, architects, engineers, surveyors, property owners and facilities managers.
• Danny Medcalf FRICS and RICS RICS Trainer for Rules of Conduct, Ethics and Professional Practice advised that:-
  o “Whether it is a building, a car park, a football stadium, or any other part of the built environment, the key thing is that the space must promote intuitive and inclusive use,”
  o “This means it has to be both welcoming and easy for people to use, regardless of their age, status, gender, physical or mental ability and all other individual characteristics.”

Question 37

Tell us about the Williams vs Network Rail Japanese knotweed caselaw?

Answer 37

• In 2018, the claimants Mr Williams and Mr Waistell, the owners of two adjacent properties in South Wales pursued damages from Network Rail due to encroachment of Japenese Knotweed onto their land.
• The Claimants requested that Network Rail treat and eliminate the knotweed on their land in addition to paying them damages under various heads of claim.
• This case law is important because the court has ruled that Japanese Knotweed infestation has caused a loss of quiet enjoyment of the claimants property.
• Mortgage companies are cautious of lending against properties that have knotweed within seven metres of the boundary.
• The claimants property value was effected significantly by knotweed growing close to the boundary and the ruling will have a wide reaching impact for other home owners in a similar position.
• In conclusion this case law highlights that surveyors need to be ever more vigilant to the potential presence of Japanese Knotweed on adjacent boundaries and to ensure the risks around this are appropriately caveated in surveys and any marketing literature.

Question 38

BS Part N repealed incorporated into part K?

Answer 38

• Approved Document N was withdrawn in England in 2013 and moved into Approved Document K.
• The aim of the 2013 revision to the Building Regulations was to remove inconsistencies and overlapping guidance.
• Part N (Glazing) has been deleted and its requirements transferred to Part K (Protection from falling, collision and impact).
• The key changes include:-
  o The common stairs in a block of flats with no lift must be a general access stair. Where a lift is provided then there should be, as a minimum, a utility stair suitable for those with impaired sight.
  o Handrails should now have a radius of 32–50 mm (previously 40-45 mm), or, if not circular, be 50 mm wide and 39 mm deep with minimum radius of 15 mm.
  o Stairs within buildings share a common classification across AD K and AD M. A general access stair is intended for all users of a building on a day-to-day basis, while a utility stair is used for purposes such as escape or maintenance access, but not as a usual route between levels.

Question 39

What is the Fitness for Human Habitation Act?

Answer 39

• A new law was introduced on March 2019 to ensure that rented houses and flats are ‘fit for human habitation’.
• The Fitness for Human Habitation, Act 2018 aims to help tenants currently living in properties that could cause them harm and to ensure that irresponsible landlords improve their properties.
• If rented houses and flats are not ‘fit for human habitation’, tenants can take their landlords to court.
• The court can make the landlord carry out repairs or put right health and safety problems.
• The court can also make the landlord pay compensation to the tenant.
• For example, if the property in question is too cold or damp and heat cannot be provided this could effect the tenants health.
• It also places an obligation on the landlord to provide their tenant with a ‘how to rent guide’ with information on the landlord’s duties and responsibilities prior to moving in.

Question 40

What is meant by the term Lifetime homes?

Answer 40

• The Lifetime Homes Standard was introduced by the Joseph Rowntree Foundation ‘Lifetime Homes Group’ in 1991.
• The standards aim to provide adaptable homes that cater for the needs of everyone from young families to older people with temporary or permanent mobility issues.
• The principles aim to allow people to remain in their homes for longer and reduce the demand on the care sector.
• The concept is based on 5 key principles:-
  o Inclusivity.
  o Accessibility.
  o Adaptability.
  o Sustainability.
  o Good value.
• A number of local planning authorities now require that the Lifetime Homes standard is adopted in new build developments for example in Wales and Northern Ireland, new publicy funded homes are required to comply with the standard.

Question 41

Please explain your understanding of the Future Homes Standard?

Answer 41

• The future homes standard is a set of criteria that will be introduced from 2025 to ensure new homes produce fewer carbon emissions.
• Prior to the changes being introduced a technical specification will be consulted on by the Department for Levelling Up Housing and Communities with legislation introduced in 2024 ahead of implementation in 2025.
• The Future Homes Standard will:-
  o Ensure new homes built from 2025 produce 75-80% less carbon emissions.
  o Existing homes and certain home improvements will be subject to higher standards.
  o New buildings such as offices and shops will have to produce 27% fewer carbon emissions.
• Experts predict this could be achieved by introducing mandatory requirements for hot water storage and improvements to insulation and airtightness.

Question 42

Please explain your understanding of the Electrical Safety Standards in the Private Rented Sector?

Answer 42

• The Private Rented Sector Regulations 2020 require that landlords renting out property are obligated to ensure that national standards for electrical safety are met as defined in the wiring regulations and British Standards.
• The electrical installation in their property must also be inspected and tested by a qualified and competent person a least every 5 years.
• Landlords must obtain a copy of the inspection report and supply a copy of this prior to new tenants moving in or to existing tenants no later than 28 days after the inspection and test.
• Where the report shows that remedial or further investigative work is necessary, this work must be completed within 28 days or any shorter period if specified as necessary in the report.

Question 43

What are the new RICS Professional Indemnity Insurance Requirements for 2022?

Answer 43

• The requirements for professional indemnity insurance were updated following issue of the UK Professional indemnity insurance requirements Version 9 with effect from 1st April 2022.
• The new requirements introduced a change to the maximum uninsured excess of Professional indemnity insurance.
• This means that for larger companies with a turnover in excess of £10m, this is no maximum limit of uninsured excess.
• Whereas for companies with a turnover of less than £10m, the maximum uninsured excess is the greater of £10,000 or 2.5% of the insured sum.

Question 44

What were the previous requirements for Professional Indemnity Insurance maximum uninsured excess?

Answer 44

• The previous requirements were based on the level of indemnity cover provided.
• This meant that for indemnity cover of £500k or less the maximum excess was the greater of £10,000 or 2.5% of the insured sum.
• For levels of indemnity cover over £500k, the maximum excess was 2.5% of the insured sum.
• These requirements have now been overhauled.

Question 45

Are you aware of the changes the RICS recently made around its
use of Membership Cards?

Answer 45

 Historically the RICS issued plastic cards to its members for each year of their ongoing
subscription.
 However now members receive a digital card which offers a more sustainable way to confirm
proof of membership and designation via each members online account to desktop or mobile
device.
 The new digital membership card was implemented following feedback from the profession
about reducing the amount of plastic we produce.
 This offers a more sustainable alternative to the plastic membership cards and forms part of the
RICS’ efforts to make the profession more sustainable and cost effective.

Question 46

Please explain your understanding of the rotation rules for
valuation contained within the RICS Red Book UK Supplement?

Answer 46

 The RICS released an updated UK supplement of the Red Book in January 2022 to update its
recommendations around mandatory rotation cycles for regulated valuations.
 The new rules mean that firms undertaking valuations for regulation purposes will not be able to
repeat this service for more than ten consecutive years.
 This will require a change or rotation to an alternative valuation firm with the aim of improving
transparency and serving the public interest.
 The new regulations will take effect on 1st May 2024 with the RICS providing a series of
briefings to help the industry understand this new requirement.

Question 47

What key market conditions would you highlight when providing
Development Appraisal advice to a client?

Answer 47

 I would highlight the importance of considering current rising interest rates and high levels of
inflation that result in the following:
o Rising borrowing costs depending on the financing model being adopted for the
development could mean a lower level of return.
o Falling demand for commercial office space following the impact of Covid-19 and a shift
towards home working could result in lower levels of rental income, longer void periods
and a reduction in the Gross Development Value.
o There has been recent pull back of borrowing products from specialist lenders who are
withdrawing competitive borrowing rates and being much more selective.
o High levels of inflation and a strong demand for specialist labour and building products
has resulted in building costs remaining high resulting in increased build costs and lower
levels of return for developers.

Question 48

Please provide an overview of the current market trends at play
within the Commercial Real Estate Sector?

Answer 48

 A recent report by Jones Lang LaSalle highlighted that 60% of office workers prefer to work in a
hybrid style with a mix between home and office working.
 This preference could have an impact on the overall demand for commercial space and change
the way it is utilised with a shift to space that can accommodate hot desking, breakout space,
lounges, collaboration space and a range of meeting rooms.
 A recent RICS Modus report highlighted that around 70% of Commercial Space in London
currently falls below the mandatory EPC B rating.
 The cost of upgrading this space to reach 2030 sustainability standards is expected to be around
£40 per square foot which may result in a larger demand for commercial space with an EPC
rating of B or above.
 With commercial landlords selling off second tier space within their portfolios to afford the EPC
upgrades required, Knight Frank highlighted a significant increase in the number of European
investors who plan to refurbish and repurpose them whilst benefiting from a significant currency
advantage against a weaker pound.