Standard Red Book Valuations
A Red Book RICS Valuation is the name given to a valuation report that adheres to the RICS (Royal Institution of Chartered Surveyors) professional valuation standards.
The Red Book contains mandatory rules, best-practice guidance and related commentary for all RICS-registered valuers undertaking asset valuations.
It does not tell a valuer how to value a property, but it does set out the standards that should be followed, including the qualifications of the valuer, the minimum content of the valuation report, duty of care and ethics. This in turn means that the client receiving the report can be sure that it has been prepared by a suitably qualified practitioner and that it is well considered and robust.
The Benefits of a Red Book Valuation
Red Book valuations are therefore 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. Understanding the basis of a valuation done in the past can be especially useful in Inheritance Tax and Capital Gains Tax situations, where historical ‘base values’ are important.
The banks also rely heavily on Red Book valuations to make sure that the property they take as security is worth enough to cover the loan. The main situations where properly researched and documented Red Book valuations are essential include:
As well as being essential for loan security and legal cases, HMRC usually require more complex CGT and IHT returns to be accompanied by a Red Book valuation of the assets in question, so the Red Book standard is the almost universally adopted standard for valuation.
The benefits of a Red Book report are that it will be fully researched and the figures will be supported in the background by suitable evidence, so if necessary the valuation figure can be justified in negotiation with another party. Non-Red Book valuations, undertaken by non-RICS qualified valuers, are not generally accepted in court for instance and are easily ‘shot down’ by the opposing party’s barrister.
If you enjoyed reading this article on Red Book valuation reports and would like to learn more about our range of services, check out our list of related posts below:
- A Short Guide: Property Valuations
- All You Need to Know About Probate Valuations
- What Are the Different Types of Valuation Reports?
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