Possible Brexit clause for Valuations

by Property 118

11:39 AM, 23rd August 2016
About 2 years ago

Possible Brexit clause for Valuations

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Possible Brexit clause for Valuations

RICSThe Royal Institution of Chartered Surveyors (RICS) has suggested a possible Brexit clause that can be added by member surveyors to be added to Valuation reports. This is intended to offer protection for Surveyors against the uncertainty of future house price movements while the issue of Brexit and its repercussions are still uncertain.RICS

The RICS website says, “As the process for exiting the EU is a long one, markets may remain uncertain for a protracted period of time, in which case valuers must continue to sound a cautionary note about the potential for longer term outcome uncertainty.

“At this point it’s important to give thought to wording that might be appropriate for your reports in this immediate post-referendum period.”

RICS stated to members that until more data about the effects of Brexit are known, Valuers  should consider using the clause below:

“Following the EU referendum held on 23 June 2016 concerning the UK’s membership of the EU, a decision was taken to exit.  We are now in a period of uncertainty in relation to many factors that impact the property investment and letting markets.

“Since the referendum date it has not been possible to gauge the effect of this decision by reference to transactions in the marketplace.

“The probability of our opinion of value exactly coinciding with the price achieved, were there to be a sale, has reduced.

“We would, therefore, recommend that the valuation is kept under regular review and that specific market advice is obtained should you wish to effect a disposal.”

RICS is leaving it to its members to decide whether or not to use the clause and that it will not be compulsory.

Colleys surveyors have confirmed that they are not yet using the above clause, but will consider the option in the future.

Valuation director Fiona Haggett said “The feedback I had from the lenders was they did not like this. I can see why. I had one lender say ‘I can’t sue a valuer on this’.

“It isn’t valuers trying to watch their backs and not be sued, it’s them taking responsibility and saying ‘I am still going to hang my hat on my valuation’.”



Comments

Luke P

14:40 PM, 23rd August 2016
About 2 years ago

What a load of twaddle! Nobody knows exactly what Brexit will look like at this stage so, '...while the issue of Brexit and its repercussions are still uncertain,' DON'T CHANGE ANYTHING.

Romain Garcin

16:48 PM, 23rd August 2016
About 2 years ago

This clause means nothing at all apart from pointing out that during high uncertainty periods things can change fast.

Alan R

21:18 PM, 23rd August 2016
About 2 years ago

CYA by the RICS!

The housing market was uncertain before Brexit, so why didn't they need a pre-Brexit CYA clause.

Yes indeed - what a load of twaddle!

Fraser Maldoom

11:39 AM, 24th August 2016
About 2 years ago

"We would, therefore, recommend that the valuation is kept under regular review..." By whom and to what purpose?

Nick Pope

9:18 AM, 27th August 2016
About 2 years ago

At the risk of annoying the RICS (though they have been annoying me since 1968) I think that this response to Brexit is not only late but also wrong.
In my view the lending institutions are much better placed to assess the risks of Brexit and to adjust their lending criteria. I value properties on the day and in the light of the evidence. If lenders are unhappy that there is insufficient post referendum evidence then they can lend less or charge a higher rate of interest.
Having said all that (and I can only speak for the south-east) there are sales going on and recent evidence suggests that prices are holding up well and that very few agreed sales fell through as a result of the vote.
My opinion? - Don't Panic!

Glenn Ackroyd

11:57 AM, 27th August 2016
About 2 years ago

Hometrack provide what I believe to be the best summary of market activity. In their latest report they suggest that the rate of house price growth is softening in London and the South East, but still strong in the UK Cities, like Manchester, Liverpool etc.

The market is therefore different throughout the UK - and London/SE has had 6 years of above average growth. Whatever happens there filters out across the rest of the UK a number of years later and that's what we are seeing now.

We're not seeing any sign of slowdown in listings, or viewers .

luci h.

13:16 PM, 12th September 2017
About A year ago

Nobody knows exactly what Brexit will look like at this stage so...
How much is my house worth?

Jay James

13:30 PM, 12th September 2017
About A year ago

What a load of croc. Who or what is behind the website? The terms do not give the named individual(s) or limited company that owns the website.


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