Hot Topics - RICS

Question 1

What is the current Bank of England base rate?

Answer 1

5.25%

Question 2

What is the current rate of inflation?

Answer 2

The Bank reported that in February 2024 inflation was 3.4%

Question 3

Did the Spring 2024 budget change anything in respect to VAT?

Answer 3

The Spring Budget 2024 raised the VAT threshold from £85,000 to £90,000 with effect from 1 April 2024.

This is the threshold businesses must register for VAT.

Question 4

What did the Court confirm in the Hope Capital v Alexander Reece Thompson, 2023?

Answer 4

The Court confirmed that the purpose of the valuer’s opinion or advice will define the extent of their duty and found that the purpose of a valuation is central to the extent of the valuer’s duty when considering a negligence claim.

Question 5

Any update with the reform of the L&T Act 1954 Part 2?

Answer 5

The Law Commission announced in March 2023 a wide-ranging review to consider options for reform. However the consultation paper originally scheduled to be published at the end of 2023 has been pushed back, initially to early 2024 and now to Autumn 2024.

Question 6

Any updates in respect to the Fire Safety Act 2021?

Answer 6

Fire risk appraisals of external walls (FRAEW) need to be carried out on all blocks with cladding where appropriate.

The need for an EWS1 form will reduce.

Question 7

Any Planning Updates you are aware of?

Answer 7

Yes, the government announced in March 2024 proposals to require planning permission for short-lets such as Airbnb.

This is to tackle the ‘hollowing out’ of communities under a proposed new Use Class C5 category.

Question 8

Any updates from the RICS?

Answer 8

Yes, the renaming of RICS documents continues as existing professional statements and guidance notes are renamed as professional standards.

Further to this, the RICS has issued new material in respect of diversity, equity and inclusion (DEI) in March 2024 to reinforce Rule 4 of the Rules of Conduct, 2021 which require RICS firms and members to encourage diversity and inclusion. The new material provides background information, advice and best practice to encourage diversity and inclusion.

Question 9

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

Answer 9

A recent report by JLL 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 and collaboration space.

A recent RICS Modus report highlighted that around 70% of Commercial Space in London currently falls below a EPC B rating.

The cost of upgrading this space to reach 2030 sustainability standards is expected to be around £40 p.s.f

Question 10

What is your view of the IMPS updates?

Answer 10

I think the IMPS 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.

I am also awaiting the updated RICS Professional Statement for Property Measurement to find out how the RICS and experts within the profession view the updated IPMS.

Question 11

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

Answer 11

The RICS is launching a scheme known as the Inclusive Employer Quality Mark designed to improve diversity and inclusion within the property and construction sector.

Question 12

What are the main benefits of Diversity and Inclusion ?

Answer 12

• Attract skills professionals from diverse backgrounds
• Establishes a sense of belonging among employees
• Encourages employees to feel more connected.
• Increases productivity
• Reduces staff turnover.
• Allows employees to feel valued and accepted.

Question 13

What are the RICS doing to improve Diversity and Inclusion?

Answer 13

The RICS has setup ‘Diversity & Inclusion leadership’ which is a knowledge hub allowing the RICS to share ideas on how and why D&I is so important to the RICS.

An example initiative includes ‘International Women’s Day”

Question 14

Please explain your understanding of the Birchard Review?

Answer 14

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:

• A Diversity and Inclusion Panel will be setup to provide advice to the RICS Board and Standards and Regulation Board.

Question 15

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

Answer 15

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

Professional Statements set out the requirements or expectations for RICS Members and Regulated Firms

Practice Information set out supporting guidance to advise surveyors in delivering specific services or working in specific areas of practice.

Question 16

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

Answer 16

I am aware of the RICS guidelines which are split into:

• Rules of Conduct for Firms use of the RICS logo and designation.
• 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.

Question 17

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

Answer 17

Yes, Tina Paillet FRICS is now President of the RICS effective from the 1st January 2024.

Question 18

What are the general requirements regarding Professional Indemnity Insurance set by the RICS ?

Answer 18

• The policy cover must be made on an ‘each and every’ case basis.
• The RICS sets out the minimum levels of indemnity.
• The policy must be fully retroactive.
• Run off cover must be in place.
• RICS set out the maximum levels of uninsured excess.

Question 19

What is the RICS Levitt Report ?

Answer 19

The Levitt Report was commissioned by the RICS following a Treasury management audit in 2018.

Question 20

Why did the previous Rules Of Conduct change?

Answer 20

The previous rules had been in place since 2007 and the change was to provide a single document to enable greater clarity for RICS members and firms.

Question 21

Talk us through your understanding of the changes?

Answer 21

The RoC October 2021 Global Practice Statement will overhaul the previous separate documents:

• Rules of conduct for members.
• Rules of conduct for firms
• Global Professional and Ethical Standards.
• Appendix A of the Rules of Conduct now contains the professional obligations of Members and Firms.

Question 22

Explain your understanding of Rule Number 1?

Answer 22

Having reviewed the example behaviours 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.

Question 23

Explain your understanding of Rule Number 2?

Answer 23

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 e.g. requesting that a Junior Surveyor undertakes a complex valuation due to resourcing issues would create problems in achieving compliance with this rule.

Question 24

Explain your understanding of Rule Number 3?

Answer 24

As an RICS member or regulated firm, we must also be sure to understand a client’s project specific requirements before acting on their behalf.

The Client’s scope of services should be agreed along with any exclusions and timescales.

Question 25

Explain your understanding of Rule Number 4?

Answer 25

The RICS 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.

Question 26

Explain your understanding of Rule Number 5?

Answer 26

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.

Question 27

What steps would you undertake in the event of a Main Contractor Insolvency?

Answer 27

I would first refer to the RICS Guidance Note - Termination of Contract, Corporate Recovery and Insolvency.

I would consider if the appointment of an insolvency expert is required.

I would keep detailed records of current progress.

Question 28

What key challenges does the potential Global Economic Recession present to your area of surveying?

Answer 28

In my area of surveying, the speculation of an economic recession has impact the financial viability of ongoing maintenance programmes with the increased borrowing costs, energy prices and labour costs increasing.

The shift to home working and hybrid working also has resulted in a scaling back of office space requirements, which is the sector I am most involved with.