The Royal Institute of Chartered Surveyors (RICS) has published its new guidance on the valuation of new-build properties.
The Guidance Note all incentives to be disclosed over new-build homes and will advise valuers on how to produce accurate valuation on new-build homes in a housing downturn.
The new requirements will also be made in the Red Book, which contains mandatory rules and best practice guidance for all RICS members undertaking asset valuations.
RICS said the guidance note will “put into context new-build valuations in the wider economic environment, emphasising the relevance of the guidance to all market conditions, both in the heady days of a boom and the gloomy days of a recession”.
It calls for valuers to differentiate between what it calls the new-build premium – the portion of the price paid which will evaporate as soon as the property is sold – and value-adding factors, such as better building materials and enhanced insulation, which will remain when the home is sold.
RICS spokesperson Barry Hall said: “All parts of the property industry are in agreement that standards must be maintained and this guidance note will provide the foundations stones for valuers working in the new build market.
“Developers and lenders agree that raising standards in the profession will benefit business and the consumer.”
The changes come into effect on 1 May.
