submission Flashcards
Talk me through your industrial comparable valuation in Canning town
What was the guidance note for comparable evidence
(Valuation L2)
RICS Guidance Note ‘Comparable Evidence in Real Estate Valuation’ 1st Edition, 2019
I valued an industrial unit occupied as a warehouse for rating maintenance purposes.
This was a newly built property therefore the rent agreed was significantly removed from AVD.
Utilising the comparable method I gathered rental evidence of similar properties in the locality and formed a basked of evidence.
After adjusting, and analysing each comparable rent to the term certain i weighted my evidence having regard to the hierarchy as well as the statutory definition of rateable value.
I applied good weight to my comparable items given they were agreed on FRI terms and in good proximity to AVD.
I was then able to form an opinion of value of the subject property and updated the rating list.
Plant and machinery? - power, heating, Movement, Structure
Car parking - 10 open surfaced spaces @ £300 per space
Talk me through you valuation of the library in Whitechapel
and what is the guidance note relating to this
(Valuation L2)
(UK Guidance Note) Depreciated Replacement Cost method of valuation for financial reporting, 1st Edition November 2018
I assisted in the valuation of a library in Whitechapel for rating purposes
Given the specialised nature of the property and the limited market evidence i utilised the DRC approach
Firstly I determined the Estimated Replacement cost of a modern equivalent and made adjustments for age and obsolescence using BCIS to come to an Adjusted Replacement Cost
It was 1960s building therefore i applied an adjustment of 60%
York museum case law
I then undertook market research of comparable evidence to calculate the land value and added this to the adjusted replacement cost.
lastly i applied the statutory de-capitalisation rate of 4.4% to come to an annual equivalent of capital value i.e rateable value
Flat roof - prone to leaks, cheaper to construct, more prone to repair.
What advice did you provide for your residential valuation in Royston
and what is the guidance note (professional statement) for Residual valuations
(Valuation L3)
(RICS Professional Statement) Valuation of Development Property October 2019.
I completed the valuation of a detached residential property in Royston for inheritance tax purposes.
The property was large and unmodernised and it had a significant plot of land attached. So for this reason i decided that there was development potential for a potential investor.
I completed market research to assess the Gross Development value of the site looking at what could be constructed and the completed value potential
looking at similar plots of land which had planning schemes approved, i determined that a further single detached property of a similar size could be constructed.
I used BCIS to calculate and deduct the costs for demolishing the existing structure and building two new properties on the land
as well as deducted associated costs of marketing, agents and professional fees, statutory costs and site prep.
As well as finance on a straight line basis assuming 100% debt compounded over the estimated length of development. I estimated a conservative length of 12 months at an interest rate of 5%
I also deducted a profit of 20% and made a contingency allowance of 2.5%
I lastly made a 15% deduction to the full development value in line with fifield v irc case given the risk that planning permission had not yet been granted.
following these deductions i was able to establish the land value which was in line with the value returned.
following approval, I then advised HMRC that the return value was reasonable and reported the case.
What advice did you provide for the retail unit in crouch hill
I completed the valuation of a retail unit in crouch hill for inheritance tax purposes.
The unit was occupied as a coffee shop and located on a high street within a parade of shops.
The shop was let as well as lease terms being provided so i used the investment method of valuation to calculate its capital value at the valuation date.
i completed research of rental evidence within the locality and determined that the property was let below market rent therefore i used the term and reversion method.
I completed market yield evidence to determine an appropriate yield and capitalised the rent to the next review.
I then capitalised the market rent at a revisionary yield (market rent/price) into perpetuity deferring the income by the length of the remaining term
Adding both the term and reversion together allowed me to calculate the capital value of the shop which was in line with the value returned.
Following approval from a registered valuer i then reported this to HMRC.
Talk me through the lease extension valuation in Brentwood
Under supervision, I completed the red book valuation of a 1 bedroom retirement flat in Brentwood for lease extension purposes.
I completed conflict of interest checks and ensured I was competent before issuing a terms of engagement to the client.
I inspected the property measuring to IPMS Residential 3B and noted its condition and value significant factors within my valuation template.
I used the comparable method to determine the market value on the long leasehold value of the subject.
Calculate the value of the existing freehold interest by:
Capitalising the ground rents receivable at 7% till lease expiry
and
deferring the freehold VP value at 5% for the length of the term (sportelli case law)
then Calculated the value of the landlords interest after the grant of a new lease by deferring the future interest for an added 90 years at 5% and took this off the value of the existing freehold value
to calculate the diminution of the freehold interest.
As the lease was under 80 years I calculated marriage value by:
adding together
Value of tenant’s future interest
Value of landlord’s future interest
less
Value of tenant’s current interest - using graphs of relativity
Value of landlord’s current interest
Then split this 50% to get the landlords share in marriage value
Added the diminution of the freehold interest to get he premium payable
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Capitalise ground rents receivable at 7% for the remaining number of years left on the lease (no ground rent on retirement flats)
Capitalise the reversionary Freehold long lease value at 5% deferring for initial length of the term
Less reversion to freehold vacant possession value capitalised at 5% and deferred for an extra 90 years
To work out the dimunition in value of the freehold interest.
MARRAIGE VALUE
Add together the freehold value and freeholders interest post lease extension to get the value of the combined interest.
less the value of flat with its existing lease from GOR and Freeholders interest pre extension to get the marriage value
then split 50/50 to get freeholders share and add this to the original diminution in freehold interest to work out the premium
Talk me though the valuation for the office in Millbank tower
I completed the valuation of a 4th floor office assessment in Westminster for rating purposes where I negotiated the withdrawal of a challenge.
The agent had submitted a challenge and sought a reduction in rateable contending the underlying rate was excessive and out of line with market rent
I used the comparable method of valuation to analyse, adjust and weight the subject and comparable rents within the building.
The rent on the subject was a rent review with a deed of variation attached whereby the rent was subsequently lowered significantly below market rent. - I therefore attached little weight to this evidence.
Adjusted and analysed rents within the subject building provided support for the adopted rate and existed as new lettings agreed close to AVD. - I attached good weight to this evidence and provided this within my initial response to the interested party who agreed to withdraw.
Talk me through the valuation for Leadenhall Market
I completed the valuation of a retail unit in central London for rating purposes using the comparable method where I agreed a revised rateable value.
The agent had submitted a challenge and sought a reduction in rateable contending the underlying rate was excessive and out of line with market rent
The subject rent was almost 2 years post AVD therefore I attached little weight to this evidence.
I then gathered, adjusted and analysed a basket of comparable rents in agreed as new lettings and in close proximity to AVD
These supported a revised rateable value in line with the passing rent was reasonable therefore an agreement was reached with the rating agent and the rating list was updated.
I also completed consequential valuations to those comparable properties in the basket who’s rents supported a revised underlying rate.
What advice did you provide for the retail unit in Knightsbridge
I valued a retail unit in Knightsbridge for non-domestic rating purposes using the comparable method of valuation to disagree a challenge proposal and maintain the 2017 rateable value.
The two contentions were that the RV was out of line with the rent passing and secondly that the unit should be valued as a car showroom in line with a use clause in the lease.
I advised the agent that the unit wouldn’t be considered in a different mode and category as we value vacant and to let use clauses do not run with the land i.e a shop is a shop but not any particular kind of shop as outlined in the fir mil case.
I also made reference to Section 2 Part 7 & 5a of the rating manual which details a list of examples of uses which could be considered as being in separate modes or categories. 5a details survey requirements for car showrooms i.e that measurements should be taken to GIA and that all car showrooms have a requirement for land to display cars for sale, customer and service parking, and car storage.
In regard to tone - identical units either side were agreed new lettings significantly closer to avd and provided support for the underlying rate adopted.
I therefore maintained the 2017 rateable value.
What advice did you provide for the retail unit in Mayfair
I dealt with a proposal to delete the retail unit from the rating list due to water damage.
After reviewing the photographs it was clear that the property was merely in a state of disrepair, with peeling wallpaper and damp to the walls and ceilings.
It was an objective fact that the subject was not undergoing a scheme of works nor incapable of beneficial occupation.
where Such works included full stripping out of the property, structural demolition, removal of internal wall and floor coverings etc.
therefore determined the repairing assumption would apply in this case.
and maintained that the hereditament should remain within the rating list
What advice did you provide for the Retail West Kensington
I received a proposal to split a corner high street retail unit into front and rear parts for non-domestic rating purposes.
It was also contended that the front should be valued as an office in line with its use as a solicitors.
Each was leased by a separate occupier, had separate entrances, had no form of intercommunication and satisfied the 4 components of rateable occupation therefore couldn’t be merged under PICO 2018.
I therefore split the unit into 2 separate hereditaments.
I also advised the ratepayer that the mode and category should remain as retail as we value vacant and to let and therefore on this basis would be valued as a shop in line with the rents commanded by the subject and comparable units in the parade.
Scottish and newcastle v williams - physical and use limb
Talk me through the part 1 claims in Milton Keynes
I assisted with several Part 1 claims under the Land Compensation Act 1973 relating to a smart motorway scheme in Milton Keynes.
The scheme involved adapting the hard shoulder to an open lane between Junctions 13 and 16 on the M1 motorway.
I undertook research for comparable properties, analysing sales evidence, and assessing environmental factors using National Highways reports.
Through site inspections and discussions with claimants, I determined there to be no deviation in comparable sale value or disturbances such as noise, environmental impact, and light pollution from the relevant day to the first claim date.
Consequently, I concluded no compensation was warranted and communicated this to a Registered Valuer colleague.
Talk me through the land cost estimate in Colchester
I assisted in providing a National Highways land cost estimate for the A12 road widening scheme from Junctions 11 to 28.
I utilised both internal and external land transaction databases to compile comparable sales evidence of various land types to produce a £/acre for each type, recording this within the master spreadsheet.
I then summarised value trends within each land type and reported this to a Registered Valuer.
Talk me through your residential valuation in Chingford
I undertook an IHT 50% undivided share valuation involving a residential property in London.
I adopted the comparable method of valuation and arrived at an entirety figure. The co-owner resided at the property, therefore having regard to appropriate case law, I applied a 15% share discount to the 50% value.
My valuation suggested the returned IHT figure to be too low therefore I entered into negotiations and presented my evidence to the Executor. A revised 50% share valuation was agreed, and I advised HMRC of this uplift.
Talk me through your mixed use valuation in Walthamstow
carried out an IHT valuation of a mixed-use freehold property in East London.
The property comprised a high street retail unit and a self-contained two-bedroom flat above.
I adopted the investment method of valuation collating rental and yield evidence within proximity to the valuation date.
Following appropriate adjustment and analysis, I ascertained the market rent was in line with passing rent.
I then capitalised the rent by a gross yield to arrive at a market value for the entire property.
I considered the concept of prudent lotting valuing each part separately.
It was confirmed the property had a higher value as two separate lots rather than as one. The returned value was in line with my valuation decision.
Talk me through your residential valuation in carsharlton
I was instructed to value a two storey semi-detached property in Carshalton for IHT purposes.
Following a desk-based review, utilising the comparable method, I determined the returned value to be too low.
I therefore inspected and measured the property to GIA, noting all value significant features.
On return I reviewed the evidence and attached weight to a sale on the subject street that occurred a few months before valuation date.
I was mindful the valuation date was shortly after the change in interest rates. I
advised client of my higher opinion of value who instructed me to negotiate.
I presented the evidence and how these had been adjusted and analysed. Following discussions, a revised IHT valuation was agreed which I reported to HMRC accordingly.
What advice did you provide for the mixed use property in Ilford
I provided the apportionment values for a mixed-used property in Ilford for CGT purposes.
I utilised the investment method to value the property as one
to which I then had regard to the apportionment values valuing each part separately
I used the comparable method of valuation to value the residential above and the investment method to value the ground floor office below.
which resulted in a higher value for the offices and a lower value for the residential part.
Entering into negotiations with the taxpayers representative I advised that a 10% allowance for the fact that the flat was ancillary to the offices would not be applicable as each part had their own separate entrance from the roadside and presented comparable evidence showing that the value was in line with comparable flats above retail and office accommodation.
I also advised that although the loft space accessed via an internally constructed staircase didn’t have building regulations approval nor nor planning permission for a living space, that I had adjusted for the fact that the property was a 1 bedroom flat with easily accessible loft room space taking into account the hope value that minor works could be completed to turn this into a 2 bedroom flat and significantly increase value.
Through negotiation a revised higher value for the flat and a lower value for the offices were agreed to which i reported these apportioned values to my client
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I provided the apportionment values for a mixed-used property in Ilford for CGT purposes.
I utilised the investment method to value the property as one - completing market rent and yield research determining the property was let at market rent and so capitalised the rent passing into perpituity at a suitable yield.
I then valued each part seperately adopting the comparable method for the residential part and the investment method for the retail part.
This resulted in a higher office value and lower residential value than what had been put foward therefore i entered into negotiations with the taxpayers representitive.
I advised that a 10% allowance would not be applicable in regard to the flat above being ancillary to the offices below given that both parts had separate access via two distinct doors from the street. I provided comparable evidence of similar properties where separate entrances existed showing no allowance had been granted for this consideration.
I also advised while the loft space didn’t have building regs approval nor nor planning permission for its current use as a living space, the alterations to construct in internal staircase up to the loft room did indeed add value. I advised that the property should be valued in its entirety i.e . as a one-bedroom flat with the added benefit of easily accessible loft space rather than a one bedroom flat only.
I also noted that the lack of building regulations could be overcome by replacing the current Velux window with a dormer and additional strengthening which would then allow it to be utilised as a second bedroom.
I made reference to comparable properties and applied an uplift regarding the added value of having easily accessible loft room space and the reasonable prospect of converting this space into a living space accounting for risk.
What advice did you provide in regard to the residential property in crouch hill
I provided the valuation for a residential terraced property in disrepair in crouch hill for IHT purposes.
I adopted the comparable method of valuation gathering transactions of properties in a similarly poor condition sold close to the valuation date and made appropriate adjustments based on the subjects condition.
I deemed the value returned to be too low and agreed an uplift returned figure.
I advised that the property was in a poor state of repair and after making relevant adjustments comparable evidence presented the value returned to be too low to which a revised return value was agreed and returned to HMRC.
What advice did you provide for the residential property in Beckenham
I provided the valuation of a detached residential property in Beckenham for IHT Purposes.
I advised that while there was no hope value for for redevelopment, using the comparable method, I determined the value returned was too low.
In gathering, adjusting and weighting a basket of comparable evidence I was able to agree a revised uplifted return value and reported this to HMRC.
The property was unmodernised and on a large corner plot of approximately 0.13 hectares.
I considered hope value could be possible for the development of a second dwelling.
My findings established the property was in a conservation area and so any further development was limited. Furthermore, my investigations confirmed a number of planning applications for extensive large scale redevelopment had been declined to preserve the locations character.
I gathered comparable evidence of similar detached unmodernised houses, which I adjusted and analysed and reported an agreed revised value to HMRC.
Talk me through your inspection in Stamford Hill
I inspected a terraced house for IHT purposes
firstly I completed health and safety procedures and and adhered to the VOA lone worker policy - diary, manager, skyguard, PPE
I then undertook an inspection of the local area noting amenities such as transport links, shopping and leisure facilities, green areas, and comparable properties.
I then externally inspected the property noting age, location condition, construction
before internally inspecting the property measuring to GIA and taking photographs and noting internal condition, bedrooms, bathrooms, modernity etc.
Located on a no through road less traffic quieter. - reasonable state of repair.
I then concluded my inspection returning to the office and saving my documents on a secure file.
Talk me through your inspection in tower hamlets for the retail premises.
I inspected a three story retail unit occupied as a salon and premises for rating purposes.
firstly I completed health and safety procedures and and adhered to the VOA lone worker policy - planning my route, diary, manager, skyguard, PPE
I then undertook an inspection of the local area noting trade, transport and comparable properties.
I then externally inspected the property noting age, location condition, construction at each level
before internally inspecting the property measuring to NIA noting fit out, air conditioning, and other value significant features.
I then concluded my inspection returning to the office and saving my documents on a secure file.
Zoned 6.1 - no RF - full air conditioning, wall mounted fan coil.
fan coil, comfort cooling, static cooling, variable air volume, variable refrigerant volume.
what advice did you provide for your inspection at the strand office
I completed the inspection of a 3 story office assessment in Westminster for rating purposes
The property has been recently refurbished however I advised that the property was not indicative of category A fitout therefore an uplift in value for fit out should not be applied.
Grade A would have
State of the art it infrastructure
Triple glazing
high efficiency air conditioning, heating and ventilation
sustainable building features
High quality design and materials
full access raised floors w/floor boxes
excellent natural lighting
What advice did you provide for your inspection at the industrial in Stratford
I completed the inspection of a warehouse for rating purposes.
The property had a basic fit out with an ancillary office found on a mezzanine floor.
I measured to GIA noting
Eaves Height
floor loading capacity
construction
site area
plant and machinery
and car parking
After noting 10 car parking spaces directly assigned to the subject, I advised these should be included within the survey.
£400 per space in line with subject and comparable evidence
What advice did you provide for your inspection for the residential property in Muswell hill
I inspected a semi detached residential property for inheritance tax purposes.
I advised that the internal condition and state of repair was poor due to a number of wall cracking to the ground floor as well as rising damp in corners of the property.
I advised that after gathering comparable evidence of similarly poor properties that the return value was acceptable.
