When you’re buying or selling a property one of the most important parts of the process is arriving at an accurate valuation. Although a property going up for sale is the most common reason for either the seller or the purchaser to want to have a market valuation carried out, there are other reasons for calling on the services of a RICS qualified surveyor. These can include the following:

• Mortgage – if you’re trying to agree a mortgage on a property then  an accurate market valuation carried out by a RICS qualified surveyor will set a benchmark figure which lenders can refer to when deciding how much to lend.
  
• Rental – if you’ve decided to rent out a property then having an accurate valuation drawn up will help you to decide on a level of rent which is fair and competitive within the local rental market. A market valuation will also be something you can refer to when explaining to prospective tenants exactly why you feel the rent you’re asking for is fair. 
  
• Taxation – a range of taxes can be charged on property in different circumstances. These can include vacant land tax, ground rent tax or inheritance tax. When calculating the amount of any property-based tax which needs to be paid, the market value of that property needs to be taken into account.
  
• Transfer – if you wish to transfer ownership of a property to another person you’ll need to have an accurate appraisal of the market valuation of that property, as this will help to decide the amount of stamp duty which needs to be paid. 

An accurate market valuation from a RICS qualified surveyor can be used in other contexts as well, such as when you’re trying to remortgage a property or paying back a Help to Buy Equity Loan. In simple terms, any financial or legal transaction in which the current worth of a property could have an impact should prompt a market valuation. Although a market valuation will involve an inspection of a property it should be noted that it is not the same as a RICS home survey, in that it is not the job of a qualified surveyor carrying out a market valuation to flag up specific issues or defects within the property.

What will a surveyor be looking for?

A surveyor undertaking a Level 2 market valuation will make a physical inspection of the property and then produce a report on the basis of their findings. Anything which might increase or reduce the value of a property could be included in the market valuation inspection in order to ensure that the valuation arrived at is as accurate as possible. The factors a surveyor will consider when arriving at a market valuation could include the following:

• Location – the importance of a property’s location may be a cliché, but it’s a cliché because it happens to be true. If a property is close to things like transport links, highly-rated schools, shops and other amenities it can have a huge impact on the value of that property.
  
• Physical description – the physical description of a property included as part of a market valuation report will cover basic details such as the year in which the property was built and the number of storeys. The finalised market valuation report will also cover the level to which the property has been maintained over the years.
  
• Layout and type – the type of property and the layout and type of the rooms will have an impact on the valuation. The question of whether it is a detached, semi-detached or terrace house, for example, or a flat with or without other flats above and below it will make a difference. The size of the property will also be a factor. For survey and valuation purposes, the surveyor will use the RICS standard code of practice when noting the measurements for a property. Under this code the Gross Internal Area (GIA) measured is used for a flat, and the Gross External Area (GEA) measured is used for a house. In addition, the valuation will be impacted by the number of bedrooms and bathrooms the property has.
  
• Utilities – services such as gas, water and electric will be included in the market valuation, but the RICS qualified surveyor will only carry out a visual inspection of the utilities, as opposed to testing if they actually work as expected.
  
• Condition – the condition of the property will be included in a more detailed part of the market valuation, although the owner of a property can request that certain parts of it are not inspected. As a rule, the owner carries the responsibility of informing the surveyor of any information regarding the property which might be relevant to the market valuation, and the surveyor may make verbal enquires in order to ascertain any details they deem important. Any inaccessible parts of the property will be assumed to be in good condition or – if not – will be detailed in a section of the valuation report headed ‘Limitations’.
  
• Tenure – a market valuations report will take into account whether the property is freehold or leasehold in nature, as this can impact on the value, with leasehold properties generally being worth less than a freehold equivalent.
  
• The market – the estimated value and therefore price of the property will be based on all of the factors detailed above plus the prices which have been achieved by similar properties selling in the local area. If local properties have been selling for prices which are above or below what they would be ‘worth’ in terms of a market valuation then this could ultimately impact the asking price of your property.

Factors which might reduce the value of your property

The market valuation is based on your property itself and on the surrounding area, but there are other factors which could still lower the value of that property when it reaches market:

• Poor maintenance – if you don’t look after your property it could not only result in the visual appeal of the property being diminished but also, in the worst case scenario, in structural damage which could greatly reduce the price you’re able to ask for.
  
• Neighbours – If the properties surrounding your property are in poor condition then that will bring their selling price down. Unfair though it may seem this will, in turn, reduce the amount of money you’re likely to be able to sell your property for.
  
• The market – the housing market as a whole can be impacted by wider societal events in a way which makes property prices shift. Measures in a budget might cause interest rates to spike and thus slow the property market down, for example, while an event such as the COVID pandemic caused a spike in the value of certain types of property, as buyers looked for properties suited to working from home.
  
• Developments – Relevant planning applications will be listed with your local authority and could have an impact on the value of your property. If a new shopping precinct has been approved nearby, for example, the extra amenities could boost the asking price, although the increase in passing traffic might reduce the price. Any future developments will need to be considered on a case by case basis.

The good news is that a market valuation carried out by a RCS qualified surveyor is likely to provide you with a highly accurate valuation of your property. Armed with this you should be able to negotiate on issues such as the asking price for a property from a position of strength. If you’re selling and a would-be purchaser tries to knock the price down, for example, you’ll be able to point to specific concrete details of the valuation to argue that the price you’re asking is a fair one.

The Market Valuation process

During the inspection the surveyor inspects and notes down all the relevant details. Before the inspection takes place you should ensure that the property is tidy with plenty of room for the surveyor to get around and enough light in each of the rooms. The same applies to the exterior of the property, which should be made to look as appealing as possible.

It should be noted, however, that there are many factors impacting on the final market valuation which are outside of your control and for this reasons it’s probably best – although not always easy – not to get too stressed and anxious while having a market valuation carried out.  

The surveyor will then take the information away with them and use it to put together a report. Because the market valuation is prepared by a professional qualified surveyor it may come up with a figure which is different to whatever you were expecting. If you disagree with the valuation provided you can supply evidence in support of your opinion, but the surveyor is an independent, professional expert and is under no obligation to change their view of what the value of the property is.

Once a valuation has been provided it should, in most cases, remain valid for a period of approximately 3 months, after which a new valuation would be required.

If you’re in need of a market valuation for your property and are looking for an RICS Surveyor near you, contact us today for a free quote. We specialise in building surveys and valuations and can carry out a professional inspection, so you can rest assured that the market valuation we arrive at is a realistic reflection of the current value of your property.