Valuation – Frequently Asked Questions

What is a property valuation?

A property valuation is a professional opinion of what a property or piece of land is worth at a specific point in time. The value is determined by considering factors such as location, size, condition, planning status, comparable sales and current market conditions.

For rural property, a valuation may also take into account agricultural productivity, environmental designations, tenancies, rights of way and development potential.

Why might I need a valuation?
There are many reasons why a valuation may be required, including:

• Selling or purchasing property
• Secured lending and refinancing
• Probate and inheritance tax
• Capital gains tax
• Partnership or business restructuring
• Succession planning
• Pension schemes such as SIPPs
• Divorce or legal proceedings

The type of valuation needed will depend on its intended purpose. We usually confirm at the start of our discussions why you need a valuation, and then Selby Rural can advise on what valuation type is best for your particular circumstances.

What is a Red Book valuation

A Red Book valuation is a formal valuation carried out in accordance with the Royal Institution of Chartered Surveyors (RICS) Valuation Standards. These reports are prepared by Registered Valuers and are commonly required by lenders, solicitors, accountants and HMRC for legal or financial purposes. They follow a prescribed format and include detailed inspections, market evidence and supporting analysis.

Both Tom Selby and Carys Studley are both RICS Registered Valuers, and between them have over 25 years of experience carrying out valuations.

Do I always need a Red Book valuation? No. In some situations, a formal Red Book report is essential, while in others an informal valuation or market appraisal may be sufficient. For example, if you’re simply considering selling a property or would like an indication of its current market value, a less detailed valuation may be appropriate.

If you’re unsure which type of report is needed, we can discuss the options and we also advise that it’s sensible to discuss this with your accountant, solicitor or surveyor before proceeding. If its determined that an information valuation is sufficient, then we can produce an       Internal Planning Purposes Valuation, which provides you with a indication of valuation, and sits outside of the scope of the RICS Red Book.

What types of rural property can be valued?

Rural property valuations can include a wide range of properties, such as:

• Agricultural land and woodland
• Farms
• Smallholdings
• Rural estates
• Commercial rural property
• Residential property with land
• Pony paddocks and equestrian property
• Development land

What factors affect the value of agricultural land?

There is no single price per acre. The value of agricultural land depends on a number of factors, including (but also not limited to):

• Soil quality and land grade
• Location and local demand
• Access and road frontage
• Field size and layout
• Existing tenancies or occupation
• Planning potential for short, medium and long term
• Environmental designations or restrictions
• Availability of services and water

Because every holding is different, values can vary considerably even within the same area.

Is a valuation just a figure?

A professional valuation report also explains how that figure has been reached and highlights any factors that have influenced the value. For example, matters such as planning restrictions, development potential, rights of way, impacts of tenancies or environmental designations may all affect a property’s value. Understanding these issues can be just as valuable as knowing the valuation itself.

How long does a valuation take?

This varies depending on the size and complexity of the property. A straightforward valuation may be completed relatively quickly, while larger farms, estates or properties with multiple titles, tenancies or specialist assets will usually require more detailed investigation before the report is finalised.

For secured lending purposes, Selby Rural have committed a service level, which we ensure is adhered to. In the unlikely event that key information is not available to finalise the report, we will always update you and provide realistic timescales.

Can a property’s value change over time?

Property values can change because of market conditions, planning policy, Infrastructure projects, agricultural commodity prices, interest rates and local demand.

For this reason, valuations are always provided as an opinion of market value on a specific date. The date of valuation is specified very clearly within the valuation report.

It is also advised that once a report is out of date, an updated valuation is conducted, rather than relying on what could be an inaccurate valuation figure.

Can a valuation identify issues I wasn’t aware of?

During the valuation process, matters may come to light that could affect the property’s value or future use. These might include planning constraints, occupancy arrangements, easements, restrictive covenants or opportunities that hadn’t previously been considered. Identifying these issues early can help owners make informed decisions before selling, restructuring or planning for the future.

Who can carry out a formal valuation?

Formal Red Book valuations must be undertaken by a qualified Chartered Surveyor who is also a Registered Valuer with the Royal Institution of Chartered Surveyors (RICS). This ensures the valuation meets recognised professional standards and can be relied upon for legal, financial and taxation purposes.

 

WHERE CAN I FIND OUT MORE?

If you have anymore questions, please contact us on 01829423183.