Valuation competency level 3

Question 1

Comparable method - Tamworth
What advice did you give to your client?

Answer 1

I advised a senior valuer of the market value of the property. This allowed the client to begin negotiations with the tenant who wished to purchase the property as was no longer required.

Question 2

Comparable method - Tamworth
Why did you ignore the presence of the tenancy agreement?

Answer 2

As the client requested a market value without adjusting for the tenancy. The tenants were the potential purchasers so would not be an issue to remove from the property.

Question 3

Comparable method - Tamworth
What are some differences between GIA and IPMS 3B?

Answer 3

IPMS 3B measures the floor area in exclusive occupation including walls and columns. GIA also does this. IPMS 3B includes but states separately and excludes but states separately, whereas GIA excludes certain items.

Question 4

Comparable method - Tamworth
What specific things differ between IPMS 3B and GIA?

Answer 4

IPMS 3B includes but states separately:
- Attics, basements/cellars
- Balconies and verandas in exclusive use
- Enclosed garages
- Limited use areas
Excludes but states separately:
- Patios
- Unenclosed parking areas (defined by number of spaces)
- Staircase openings
- Voids where the area is greater than 0.25m2
- Vertical penetrations that form part of common facilities.
GIA excludes:
- Perimeter wall thickness
- External open sided balconies, covered ways and fire escapes
- Canopies
- Voids over or under structural, raked or stepped floors.
I particularly made a difference for the garage which was included in the GIA calculation.

Question 5

Comparable method - Tamworth
What was your valuation advice?

Answer 5

I advised the market value meaning negotiations could begin between landlord and tenant. I advised the best evidence was the neighbouring property due to the nature of the subject.

Question 6

Comparable method - Birmingham
What is market rent?

Answer 6

The amount an asset would let for on the open market at the valuation date in an arms length transaction between a willing lessee and willing lessor who both acted knowingly, willingly and without compulsion.

Question 7

Comparable method - Birmingham
What lease terms did you adjust for when calculating the market rent?

Answer 7

The lease terms were in line with Doctors Rents and Rates scheme in NHS England Directions 2013. This instructed:
- 15 year lease
- 3-yearly rent-reviews
- Tenant internal repairing basis.

Question 8

Comparable method - Birmingham
Do you feel you were competent to undertake the instruction?

Answer 8

Yes, as I had dealt with market rent before and I had also valued surgeries/doctors before but for rating purposes.

Question 9

Comparable method - Birmingham
What is guidance note 60 you say you had regard to while inspecting?

Answer 9

It is guidance in respect of measuring and valuing of surgery premises in England.

Question 10

Comparable method - Birmingham
What value significant features of a surgery are there?

Answer 10

• Low height reception desk
• Automatic double door entry (with ramp if necessary)
• Coved flooring
• Hygiene sinks with minimal touch
• Privacy curtain
• Data trunking
• Handrails in disabled toilets and low toilet
• Reception area separate to consulting rooms
• ## Minimum size consulting rooms

Question 11

Comparable method - Birmingham
GN60 is from 2010 why have you had regard to such an old document?

Answer 11

Due to there being no update to the guidance and this being the best guidance in relation to this property type. However, I am aware there is some consultation on going to update GN60.

Question 12

Comparable method - Birmingham
Did you issue the report to the client?

Answer 12

No, an RICS registered valuer did as I am not allowed.

Question 13

Investment method - Staffordshire
Define market value for IHT and where is it found?

Answer 13

The estimated amount an asset would sell for on the open market at the valuation date but the estate does not flood the market. Found at S.160 of the Inheritance Tax Act 1984.

Question 14

Investment method - Staffordshire
Why did you request the valuation report instead of inspecting?

Answer 14

So I could get a better idea for the property. I chose not to inspect as the valuation report had the required detail and images. So value for money for the client.

Question 15

Investment method - Staffordshire
Were there any lease arrangements?

Answer 15

No, the property was empty.

Question 16

Investment method - Staffordshire
The property required remediation works, what were they?

Answer 16

There were waste materials present that required removal.

Question 17

Investment method - Staffordshire
How did you adjust for the remediation works?

Answer 17

I researched the market for removal of waste and deducted this from the capital value. I advised my senior colleague that £40,000 was reasonable for removal.

Question 18

Investment method - Staffordshire
Did you adjust anything other than market rent and yield?

Answer 18

Yes, I adopted a 6 month void period in my valuation for remediation works, marketing and any rent-free periods.

Question 19

Investment method - Staffordshire
What sort of yield did you adopt?

Answer 19

Gross yield as per IHT valuations.

Question 20

Investment method - Staffordshire
Why was the property in a poorer condition?

Answer 20

The property had some damage to the internal walls and water damage to the roof lights.

Question 21

Investment method - Staffordshire
What valuation advice did you give?

Answer 21

I advised a senior surveyor the returned figure was reasonable after further research and adjustments. We were then able to advice HMRC on the value of the property.