UK NATIONAL SUPPPLEMENT

Question 1

What parts of the UK National Supplement are mandatory?

Answer 1

UK PS 1

UK VPS 1/2/3

Question 2

Under UK VPS 3, what valuations count as regulated purposes valuations?

Answer 2

1. Financial Reporting
2. Stock Exchange Listings / inclusion in prospectuses and circulars
3. Takeovers / Mergers
4. Collective Investment Schemes
5. Unregulated Property Unit Trusts

Question 3

What does UK GAAP stand for?

Answer 3

UK Generally Accepted Accounting Practice

Question 4

In secured lending valuations, can the valuer communicate with the borrower?

Answer 4

Only where the lender (client) has chosen to open this communication channel between them, and where this is the case, the valuer should request a written confirmation of these instructions

Question 5

What are the disclosure requirements for regulated purpose valuations?

Answer 5

As per PS2, Red Book Global/UK VPS3 where the asset has been previously valued by the valuer / firm, the following disclosures are required in the ToE and report:

• relationship with the client and the previous involvement
• rotation policy (7 years recommended)
• time as a signatory
• proportion of fees (if proportion of total fees over previous year paid by the client is less/ more than 5% - include range and whether this proportion has or will change)

Question 6

What are regulated purpose valuations?

Answer 6

Valuations which are relied upon by 3rd parties who did not commission the valuation

Question 7

In what case of previous involvement can a valuer not undertake a valuation for regulated purposes?

Answer 7

In the 12 months preceding the valuation date, if the valuer/ firm has:

• acted on the acquisition of 1 or more properties for the client
• received an intro fee

UNLESS
an unconnected firm has valued the property for the client at the time of, or since the transaction was agreed

Question 8

Is the DRC method suitable for secured lending valuations?

Answer 8

Not as the sole valuation method, but can be used as a cross check

Question 9

Under UK VPGA 10, what is the requirement for the valuer with regards to their comment on suitability for loan security?

Answer 9

Ultimately it is the banks decision to assess suitability for loan security

The valuer should provide comments limited to property or market factors that could have an impact on cash flow, value or liquidity, with advice provided only based on information available or reasonably foreseeable.

Question 10

What is the objective of a loan security valuation?

Answer 10

That the valuer understands the lenders requirements and the lender understands the advice given to him

Question 11

What type of valuations does UK VPGA 10 relate to?

Answer 11

Commercial secured lending against investment, development and owner-occupied real property (standard asset classes including operating assets and resi assets considered to fall within the professional investment sector)

Question 12

Which part of the UK National Supplement relates to accounts valuations?

Answer 12

UK VPS 3 and UK VPGA 1

Question 13

Which part of the UK National Supplement relates to loan security valuations?

Answer 13

UK VPGA 10

Question 14

Which part of the UK National Supplement relates to capital gains tax valuations?

Answer 14

UK VPGA 15

Question 15

Which parts of the UK National Supplement relate most to the work you undertake?

Answer 15

I have reference to all of it, but specifically:

• PS 1 (Compliance)
• VPS 1/3 (ToE and Regulated Purpose Vals)
• VPGA 1 (Financial Reporting)
• VPGA 10 (Secured Lending)
• VPGA 15 (CGT Vals)