The impact of RICS latest guidance on bridging
In a bid to boost confidence in valuations, the Royal Institution of Chartered Surveyors has launched an up-to-date Valuation of Individual New Build Homes Guidance.
The latest guidance was made in order to deliver confidence between valuers, lenders, brokers, and borrowers and, as a result, improve lending on new and self-build houses.
Peter Bolton King, RICS Global Residential Director, expressed:
“There have been significant changes in the new and self-build market – and a renewed range of buyer incentives has sparked some uncertainty on if and how these should be factored into valuations.
“This updated guidance will increase confidence amongst valuers, lenders, and borrowers in their valuations by equipping surveyors with the information they need to carry out accurate and market consistent valuations.”
As per RICS, the guidance was launched following a rising trend, which has witnessed surveyors value new builds differently to older homes.
Matt Sanders, of Levene Chartered Surveyors, mentioned:
“A significant percentage of valuations we undertake for bridging lenders involve new build and development properties due to the nature of the funding required. Therefore, I expect these guidance notes are intended to have some effect on bridging and development lenders; whether they do in reality is another matter.
“Having read the new guidance notes they are always useful to refresh your knowledge on topics and help you consider your approach. Most valuers working in the field are experiencing the changes as they happen due to their exposure working with property professionals such as developers. I believe they do help promote consistency and have a valid purpose, however I wouldn’t expect the impact to be significant due to the existing knowledge and experience of surveyors.”
The guidance gives a consistent methodology to employ when carrying out valuations for new and self-build properties. RICS said that the paper has been designed to ‘reflect and ensure that recent market changes in buyer incentives and mortgage indemnity schemes for instance the Government’s NewBuy scheme do not significantly change how valuations are carried out’.