On 1 May, the rules of engagement change for valuers.
However, it’s one thing for RICS to publish a 129-page set of additional Red Book strictures needed to ‘enhance the integrity, transparency and robustness of all valuations’. Quite another to expect the unwritten rules to change.
Obliging valuers to break up with clients after a decade is a good thing. But, face it, what can alter the power imbalance between payer and those paid for an opinion? A really scary external regulator? Not happening. The watchdog is housed within RICS’s kennel. Not scary enough to frighten the tier-one firms that dominate the market.
“The RICS regulatory function remains deeply conflicted,” a senior member of a tier-two practice said. “Self-regulation of its own subscription paying membership? Really? Particularly, perhaps, of the larger firms paying the most in subscriptions. The big firms have a vested interest in maintaining the status quo, particularly in the fruitful regulated valuation market where they have most market share and earn substantial revenues.
“The discount to NAV of many quoted property companies shows how little confidence the market puts in valuer opinions; largely, I suspect, because valuers are seen as unduly close to management teams and not held to account in truly marking to market.”
Peter Bill is author of Planet Property and Broken Homes
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