Residential Property Surveyors Association

1. Residential Property Surveyors Association Peter Bolton King FRICS, FNAEA, FNAVA, CIPS Global Residential Director

2. 1. INDEPENDENT REPORT ON VALUATION By Dr Oonagh McDonald CBE 2. THE NEW DIPLOMAS

3. INDEPENDENT REPORT ON VALUATION • “Balancing Risk and Reward: Recommendations for a Sustainable Valuation Profession in the UK” • Dr McDonald CBE issued her report in January after consulting widely across the sector throughout last year. Oonagh met lenders, valuers, insurers, lawyers and regulators to prepare and research her report and received a large number of written submissions • Her report contains 12 recommendations which she believes will help address the challenges facing the sector to help ensure its sustainability.

4. Surveyors on Valuer Registration (VR) should be obliged to report to RICS immediately on receiving a formal notification of a negligence claim, rather than just recording this in the annual return Lenders should instruct their solicitors to withdraw notifications of claims (the ‘confetti’ letters) That the introduction of Valuation Specific Professional Indemnity Insurance (VSPII) and Valuation Risk Management (VRM) or equivalent contingent insurance products should be carefully assessed and introduced, with recognition by RICS. VSPII requires property inspection data to be captured on a portable electronic data device. This should have a standard format for use by all lenders The Prudential Regulation Authority specifically places the responsibility of assessing the value of the property on the lender. Valuers should therefore carefully examine the contract offered to them for the valuation and its implications and seek to limit their third party liability, bearing in mind that the valuation of the property is at a particular point in time. That RICS should retain a register of all the panel management companies and a list of staff surveyors employed by the companies on an annual basis That panel management companies under the auspices of RICS should set up a working group, including other stakeholders, to develop a Code of Best Practice for panel management

5. That all residential surveyors should develop their understanding of Automated Valuation Models (AVMs) so that they can select an appropriate AVM and ensure that the appropriate policies are in place for its use That the professional standards set out in the Red Book be amended to include a requirement for the surveyor’s valuation to be retained in a durable medium, one copy of which will be retained by the creditor and another copy held by the surveyor for a period of at least six years One possibility might be to introduce the Home Report in England and Wales. The Scottish Government initiated a review in December 2013 of the way in which the Home Report has performed in the first five years of its operation. Await the outcome of this review The recommendation is that the lender should pay for the valuation report Marketing and communication of the valuation profession as a career choice needs to be supported by the RICS, Higher Education Institutes (HEIs) and professionals from industry Marketing and communication of the valuation profession as a career choice needs to be supported by the RICS, Higher Education Institutes (HEIs) and professionals from industry

6. What was clear was that the sector acknowledged that the balance of risk and reward for valuation for secured lending work is not right and that this means there is a serious challenge to the sustainability of the sector. It is in everyone’s interests that we have enough fully qualified valuers available to carry out this important work but unless we tackle issues of risk, reward, PII cover etc then there is a risk that younger surveyors will not see residential valuation as an attractive career option RICS has had positive feedback from across the sector for facilitating this work – there is real enthusiasm and commitment from all sectors to address the challenges and change behaviours to ensure a sustainable valuation profession for the future. This is in everyone’s interests So what happened next?

7. We held two roundtable groups in February – one for residential, one for commercial • We are in the process of setting up two cross-sector groups which will work with RICS staff and relevant RICS boards to focus on the output from the report and roundtable sessions. The key themes will be around conflicts of interest and terms and conditions of engagement/instructions. • Specific workstreams highlighted by Oonagh’s report will be considered eg considering Pay as You Go insurance. The groups will work on a task and finish basis so that momentum is maintained

9. This is your opportunity to shape and change your profession for the future so post your comments at the following link: http://www.rics.org/uk/knowledge/news-insight/news/mark-gerold-frics-reports-back-on-roundtable-discussions-on-the-independent-valuation-commission/ • Or http://tinyurl.com/nmcsp68

10. Diploma in Residential Surveying(DipRSurv) Diploma inResidential Valuation (DipRVal)

11. RICS has worked with RPSA to ensure that both qualifications meet the requirements for entry to AssocRICS • Holders of the Diploma in Residential Surveying with one year’s relevant experience are eligible for the RICS Associate Assessment • Holders of the Diploma in Residential Surveying and Valuation with two years’ relevant experience as eligible for direct entry to AssocRICS • The On-Line Ethics module will still have to be taken but cost is included in the application fee. • Please remember that AssocRICS, along with any other qualification, does not mean you can carry out ‘red book’ valuations without applying to be a registered valuer • RICS website already shows the new qualifications as being suitable for Assoc entry.

12. THANK YOU