The UK property market needs stronger oversight and stricter rules governing property valuation in order to bolster trust in the process, a review has recommended.
The review was commissioned by the Standards and Regulation Board of the Royal Institution of Chartered Surveyors (RICS).
Recommendations include the introduction of a valuation compliance officer role for RICS regulated firms undertaking valuation, the creation of a dedicated valuation panel and further guidance on the culture within this sector and the behaviour expected of valuation professionals.
The proposals apply to major UK and global assets such as shopping centres, offices and business parks.
“The recommended changes for stronger oversight will underpin future stability and market confidence in this major asset class – much of which is funded through pensions and savings – and are therefore very much in the public interest,” said the Standards and Regulation Board’s chair, Janet Paraskeva.
The report pointed out that valuations provided by RICS-regulated members and firms underpin financial reporting and decision-making for trillions of pounds’ worth of land and real estate assets in the UK and globally – "a significant amount of which is ultimately funded by consumers through pensions, savings and investments."
The review’s aim was to ensure that services provided by RICS-regulated professionals and firms operating in the valuation of real estate assets for investment purposes, predominantly for financial reporting, remain relevant and trusted.
Peter Pereira Gray, chair of the valuation review, said: “The recommendations will provide stronger assurance with stricter rules governing property valuation. Ultimately, this will deliver the best possible outcomes for markets and the public.”
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