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Calls for Valuation Reform Met With Limited Changes

LONDON-The Royal Institution of Chartered Surveyors has responded to criticism of the valuation profession with plans to ensure improved openness and independence among valuers.

By Graham Parker | Updated on January 16, 2002

RICS Responds To Calls For Valuation ReformLONDON-The Royal Institution of Chartered Surveyors–the regulatory body for Britain’s property valuers–has unveiled plans to increase openness and to ensure more independence among the valuation profession. But it has stopped short of enforcing a US-style separation between the brokerage and valuation functions.

The debate on the independence of property valuers–particularly those carrying out large portfolio valuations for institutional investors–was thrown open in Summer 2000 when academics at Reading and Nottingham Trent Universities highlighted two main concerns. First that valuers were coming under undue pressure from clients at draft valuation meetings and second that some firms were unduly reliant on a small number of large valuation clients. It found that 80 per cent of all institutional valuations in the UK were carried out by a handful of large global firms.

The RICS responded by convening a working party under Sir Bryan Carsberg, former professor of accountancy at the London School of Economics and Director general of the office of Fair Trading, the Government’s consumer watchdog. The Carsberg Report was finally unveiled today with a list of 18 recommendations. The key recommendation is a system of independent monitoring of the valuation processes in the biggest firms, to be carried out either by the RICS or independent consultants. The inspectors would have the power to make spot checks on valuation files to monitor procedures and firms failing to meet required standards could lose their accreditation to carry out such work.

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