And why do I need one?
What is a Red Book valuation?
A Red Book valuation is a formal opinion of value which can be relied upon by the instructing party. They are often confused with a ‘market appraisal’ which is an informal opinion on a suitable guide price for a property, and which are provided by estate agents in the hope of being instructed to sell a property.
Chartered Surveyors who assess the value of properties and land are required to work within strict professional standards set by RICS, the Royal Institution of Chartered Surveyors – and the publication that covers these valuation standards is known in the industry as the ‘Red Book’.
The Red Book sets out the professional standards that valuers should follow, and its formal title is the ‘RICS Valuation Global Standards’. These standards ensure that high standards of inspection, investigation, analysis, definitions, justification and presentation are met.Â
Individuals undertaking this type of valuations are known as ‘RICS Registered Valuers’.
When do you need a Red Book valuation?
There are lots of circumstances when a Red Book valuation might be needed. These valuations can be specified by institutional lenders, such as banks and mortgage providers. In addition, a Red Book valuation is often requested by a solicitor or accountant where formal legal proceedings or tax calculations are involved.
The main situations where a documented Red Book valuation is essential are:
- Tax purposes (e.g., tax planning / probate / capital gains tax)
- Transferring assets into a SIPP pension fund
- Divorce proceedings, or other legal court proceedings
- Disputes being resolved through mediation or arbitration
- Financial reporting
- Loan security
- Partnership dissolution
Benefits of a Red Book valuation
The Red Book is recognised globally as one of the most rigorous sets of criteria for valuations. The standards which ensure the quality of assessment mean that these valuations are ideal to use in circumstances that are subject to legislative requirements.
Red Book valuations are fully researched and documented written valuations, which should be of a standard and clarity that stands the test of time and can be referred back to and understood in the future.
Red Book valuation vs market appraisal
Market appraisals are general estimates of a property’s market value. Usually conducted by estate agents, they give a feel for average selling prices in the area with a view to marketing and selling a property for you.
A valuation however is conducted by a RICS Registered Valuer who has the professional expertise to provide an accurate evidence-based market valuation based on the property’s condition and local knowledge.
How can we help?
Howkins & Harrison has a number of RICS qualified Registered Valuers who are able to provide professional reports across all types of agricultural, rural, residential and commercial property. Alongside our qualified professionals team, our estate agents are able to provide a market appraisal if you are considering a sale of your property without one of the situations highlighted above.
If you’d like to obtain a quote or find out more about how we can help you with a Red Book valuation, please do not hesitate to get in touch with one of our offices:
Ashby Office – 01530 877977
Atherstone Office – 01827 718021
Rugby Office – 01788 564 666
Towcester Office – 01327 353575
