Daniel Owen-Parr is managing director of VAS Audit
There is no doubt the last few years have been challenging for everyone, but this is especially true for anyone involved in the property market.
The world seems a different place from the Brexit referendum vote decision in June 2016 to the present day.
Wherever I lay my hat
The lending market relies on accurate property valuation to keep the system moving, so what have the main challenges been over this period?
In our view the process itself has not changed much at all because every property is valued ‘in all the circumstances’.
What I mean by that is regardless of local or even global circumstances, in short anything that might impact on value, the need to take all matters into account has always been the same.
However, when events that impact on value are momentous, like COVID-19, the problem we always have is getting hold of comparable evidence that ‘proves’ the valuation figure.
Last year in the first lockdown our industry had to stop. Yes, we rapidly introduced desktop valuations, but over three months there built up a backlog of transactions, some of which did not complete whilst others stumbled across the line.
This left a void of evidence upon which valuers could rely on which led to the use of the ‘Material Valuation Uncertainty’ clause; effectively valuers were saying that their advice was less certain and should be treated with caution.
In effect, due to the lack of comparable evidence, valuers had to use their experience, understanding of the local market and sentiment in order to provide the best possible advice.
As the range of support measures were introduced the market changed again, mostly for the better, and valuers’ confidence was restored as more-and-more evidence emerged of completed sales or lettings.
However those support measures do not last forever, take for example the current stamp duty holiday which ends this June.
We are valuing during a busy time but will this last? We are cramming many transactions into a short space of time, so the likelihood is the market will slow down soon.
Less activity leads to a reduction in comparable evidence, and reduced demand leads usually to a price fall.
In short, it is the usual rollercoaster that valuers are trying to deal with, providing market values at a certain point in time, with a moving property landscape that might be different in the future.
But in times like these the whole world is faced with uncertainty, and life is changing, and valuers will keep trying to get it right.