In September 2008, the industry agreed changes to the Red Book which encouraged valuers to ask for incentives to be disclosed on new build properties. Now RICS has moved a step further by pulling together all issues in a best practice Guidance Note which will provide valuers with the foundations to undertake with confidence, the valuation of new build properties.
The guidance also puts into context new-build valuations in the wider economic environment emphasising the relevance of the guidance to all market conditions, both in the heady days of a boom and the gloomy days of a recession.
The note stresses the need for valuers to differentiate between the new build premium – that portion of the price paid which will evaporate as soon as a newly-built property is occupied - and those value-adding factors (such as better building materials, enhanced insulation levels, or more efficient heating systems) which are intrinsic to a new property and which will remain when the home is sold.
Commenting, RICS spokesperson Barry Hall said: “All parts of the property industry are in agreement that standards must be maintained and this guidance note will provide the foundations stones for valuers working in the new build market. Developers and lenders agree that raising standards in the profession will benefit business and the consumer.”
