Matt - Valuation - Level 2 Flashcards
Why did you value by the DRC method?
Given the specialised nature and use of the property as a library, the DRC method was the most appropriate.
How did you decide on the land value to adopt?
I had regard to comparable development land comparables in the locality that transacted close to the valuation date using sources such as EIG.
How did you depreciate for age and obsolescence?
Depreciated for age by having regard to the remaining life of the building. Straight line depreciation of 1% per year.
Depreciated for obsolescence by:
Functional - Building as it stands now it doesn’t serve the purpose of a modern equivalent
Physical - Aspects of the library such as the flat roof, I had regard to how long was left of it, and the remaining life which is about 50 to 60 years to calculate a percentage which I applied in the valuation.
Economical - I had regard to the Bank of England base rate which is currently 5.25%, and also the economic climate such as the increase in costs for materials due to conflicts in Ukraine and high inflation.
How did you establish the replacement cost of a modern equivalent?
I had regard to BCIS and I’m aware of SPONS.
These give market estimates derived from other valuations and valuer opinions. I also adjusted to reflect location.
You mention you valued a retail shop in Solihull as part of a Rating Challenge case.
Tell me how you valued the property?
I was required to value the property as part of a 2017 Rating List Challenge, where the agent was disputing the tone or adopted Zone A rate for the property.
What was the compiled 2017 List Zone A rate for the retail property in Solihull?
£350/sqm ITZA
What did you do to establish whether the Zone A rate was reasonable to adopt?
I had regard to the rent on the subject property and the rent of similar properties in the locality as per the steps detailed within Lotus & Delta.
What rental evidence did you have to consider in this scenario?
I had a rent on the subject property and the rents for 2 other properties.
How strong was the rental evidence in this scenario?
I had good evidence for both the subject property and comparables.
They were new lettings agreed in 2014 and required minimal adjustment to meet the definition of RV such as for fit out and to be on FRI basis.
What did your analysis come out to in terms of unit rate?
£300/sqm ITZA
What did you do as a result of your analysis?
I detailed my findings to a senior colleague and proposed a revised Zone A rate of £300/sqm ITZA.
Did the Agent accept your revised Zone A rate?
Yes they did. Although our analysis differed slightly, I ultimately contacted them to explain my thoughts and evidence on the case and to propose this new Zone A rate.
Because you got an agreement in this case, did that mean the ratepayer had a right to appeal?
No they didn’t because it was an agreement.
They can only go to appeal if the case is resolved by a decision notice being issued.
