We undertake valuation work for a variety of purposes, most commonly:

Pre-purchase valuations, Help-to-Buy valuations (in accordance with the Homes and Communities Agency, Target etc), Housing Association Valuations for Councils, as well as matrimonial, probate and taxation valuations. We also provide property reinstatement costs for building insurance purposes, as well as current market Rental Valuations for landlords.

What is a 'Red Book' Valuation?

A Red Book valuation refers to the best practice guidelines and rules for professional valuation services set by the Royal Institution of Chartered Surveyors. A Red Book valuation is not to be confused with a 'market appraisal', which might be called a ‘valuation’, but in reality is just an informal opinion, often provided by an estate agent in the hope of being instructed to sell a property. 

If you appoint a RICS registered valuer, you can be confident that you are working with regulated and qualified professionals who will provide clients with a clearly identifiable designation of international standards, quality and the consistent application of Red Book standards. 

In other words, you’re getting a professional, independent, accurate and honest valuation – a valuation that you can trust. Think of it as a seal of approval or quality mark for your property valuation.

How much does it cost?

Generally, for a standard residential property, usually a RICS Valuation costs around £400 to £700, but it can be higher depending on the size and value of the property. Please note that our prices include VAT - some firms will quote excluding VAT, so be careful!

When would you need a Red Book valuation?

There are lots of circumstances when a Red Book valuation might be needed. Essentially, any time you need a formal valuation for tax purposes or legal proceedings, that valuation must be done by a RICS Registered Valuer, acting in line with Red Book standards.

This might include valuations for:

• Tax planning purposes
• Calculating probate, or Capital Gains Tax
• Transferring assets into a SIPP (self-invested personal pension) fund
• Properties being sold by charities (as set out in the Charities Act)
• Divorce proceedings, or other court proceedings
• Disputes being resolved through mediation or arbitration

A Red Book valuation can also be helpful for rent reviews and other negotiations.

What is Market Value?

The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

What’s involved in a Red Book valuation?

In simple terms, a Red Book valuation involves a RICS Registered Valuer assessing the property and providing a formal report on the current market value of the property. To help calculate the market value for residential properties, the valuer will usually use the Comparable Method as it’s directly linked to current market transactions. This carefully assesses three main comparable properties that have recently been sold in the same or similar area. Further comparable evidence is also used to inform and provide a further range of values and provide a broader picture. Where comparables differ from the subject property, the selected comparables are adjusted to reflect differences in type, size, location, date of sale, demand in the area and other attributes where applicable. From here a tighter valuation range is established, alongside taking a hierarchical view of the comparable evidence, before arriving at a final opinion of value. 

The valuation is generally valid for three months, but it can be extended in some circumstances, for example if a Help-to Buy application runs over this period, then as long as the market has not changed substantially, a simple letter from us saying our valuation remains the same will usually suffice. If it runs over six months then it is good practice for the valuer to return to the property for another inspection, prior to providing a revised valuation.

Other methods of valuation can be used, depending on the type of property and its use. (If you are only in need of a residential valuation with limited development potential, then there is probably no need to read further):

The Profits Method could be applied when no comparable rental/sale transactions are available, and it’s often used for pubs, hotels, nursing homes (typically a business property with an element of a monopoly, with results in lack of comparable variables). The method estimates a business’ gross profits and thereafter deducts all working expenses excluding any rental payments made; this gives the divisible balance, or the amount of capital to be shared between tenant (for running the business) and landlord (for rent).

The Residual Method could be used to value property with development potential or vacant land that is having its current use changed to something more profitable. When calculating land value one must take the gross development value minus the cost of development (including the developer’s profit). The residual sum is then the capital that the developer can spend on the property in its undeveloped form. This method is well known for being inaccurate due to number of inputs and costs that are challenging to determine, and also have a tendency to change over time.

The Contractor’s Method is a cost method of valuation, and can sometimes be used when comparative, profits or investments methods cannot be used. The situation often occurs if a property has a specialist nature, meaning there are no market transactions. The method assesses all the costs of providing a modern equivalent property, and thereafter adjusting it to reflect the age of the subject property. This method is often referred to as the ‘method of last resort’ due to its unreliability, as the market value is determined by the economic forces of supply and demand, not by the cost of production.

Lastly, the Investment Method can be applied to determine the market value of a freehold or leasehold interest in property from its potential to generate future income. It is typically used for the main forms of properties where a tenant is providing the landlord with an investment return on his capital cost (purchasing the building). Using this method, the comparable property transactions of sales and lettings are analysed to find the revenue. The profit is thereafter applied to the future rental income, which is discounted back to the present day giving the net present value (NPV). This is finally used as an indicator of how much the building is presently worth.