Enhancing global valuation standards and best practices

To ensure valuation practices remain fit for purpose, we are committed to setting and maintaining the highest standards and guidelines for our members and firms. This includes making significant strides over the last few years in implementing the recommendations from the Valuation Review and accommodating changes to international standards and regulations. Our initiatives, including the publication of updated guidelines, the introduction of new regulatory assurance, and the revision of existing standards, underscore our dedication to enhancing the quality and consistency of valuations globally.

Updating standards and guidance

To date, we have launched multiple industry consultations that have shaped the implementation of the recommendations so far. This includes updating the Red Book UK Supplement  to introduce a compulsory rotation cycle for valuation firms and responsible valuers valuing an asset for regulated purposes. Other changes include key updates to residential valuation, public sector valuations, financial reporting, and governance changes. These changes went into effect on 1 May 2024.

Our commitment extends globally, with proposed updates to the Red Book Global Standards currently open for consultation. Share your feedback before 2 August 2024, to help shape the future of valuation practices. Changes include integrating valuation review recommendations, adapting practices and processes for emerging trends like ESG and technological advancements and aligning with development in other relevant global standards such as IVS and regulations.

Additionally, last year we launched a DCF valuation web hub that features an updated DCF practice information paper, webinars, and other valuable resources. This initiative ensures that valuers have access to the latest tools and knowledge, promoting best practices in valuation methods and models.

Beyond updating our standards to ensure best practice for our global valuers, we are also producing a client valuation procurement guide to support the instruction of investment valuations. This guide will provide information that supports clients when instructing investment valuations.

Enhancing governance and compliance

Ensuring trust in the valuation sector requires robust governance practices that reduce risk and strengthen accountability. To ensure practices remain future-proof and in the public interest we are establishing a Valuation Assurance Committee (VAC), to meet the recommendation for a quality assurance panel in the review. Reporting to the Standards and Regulation Board, this group will provide comprehensive oversight and enhance the integrity of valuation processes. We are currently recruiting the Chair, with recruitment for the rest of the committee to follow. We expect the VAC will be in place by the end of 2024.

Another key recommendation is introducing the role of a Valuation Compliance Officer. We ran an industry consultation in Q4 2023 to gather feedback on what this role should cover and the regulation of valuers and firms. This feedback will guide the Standards and Regulation Board (SRB) in making informed decisions, with advice from the VAC on whether the VCO role should be implemented and/or a valuation scheme for RICS regulated firms should be introduced.

To ensure member’ skills and knowledge remain current and relevant we have also opened a consultation on our Continuous Professional Development (CPD) Framework. This will examine the continued competence of valuers. Furthermore, to ensure we have the right knowledge, skills, experience, and behaviours at the point of entry into the profession, we have also recently published the findings to a review conducted specifically to address this. The recommendations from the Entry and Assessment Review are currently under consultation and all RICS members and stakeholders are encouraged to share their feedback.

Building a diverse and ethical valuation profession

We are committed to fostering an inclusive profession and our updated Rule 4 DEI guidance on establishing an inclusive culture reflects this. In addition, we continue to gather data and insights on DEI within the surveying profession, aiming to build a more equitable and inclusive profession. Specific to valuation standards, we have also updated the RICS website to encourage more member involvement in the development of our sector specific standards. This supports our drive to ensure diverse representation across expert groups, panels, and forums.

We have also worked on initiatives that help clarify RICS’ expectations of the culture and behaviour expected of RICS valuers. This includes publishing Valuation Conflicts of Interest Case Studies and updating the Red Book UK Supplement to include guidance to help address and mitigate potential conflicts. Upcoming updates to the Red Book Global Standards and the development of CPD on valuation governance, such as Red Book compliance workshops, will further support registered valuers. Finally, we have published a best practice webpage for Registered Valuers that includes templates and other useful documents to help members and firms ensure that they follow best practice procedures as part of their registered valuer status.

Moving Forward

The newly established Valuation Professional Group Panel and the Global Valuation Standards Expert Working Group will drive any further implementation forward. These groups will gather insights and data, ensuring that valuers globally have the necessary tools and support from RICS. Through these initiatives, we are reinforcing the strong foundations of the profession and further enhancing inclusivity, transparency, and innovation for the future.