RICS tightens standards for new build valuations

The RICS has made changes to the 'Red Book', the rules used by chartered surveyors when making asset valuations.

From 1 September 2008 the organisation will make it mandatory for members to ask the seller, builder or developer on site, or their selling agent, for a copy of any ‘disclosure of incentives’ for the new home property under consideration.

The RICS hopes the change will help restore confidence in the new-build market as well as improve transparency in the new build valuation process.

The form, prepared in accordance with guidance from the Council of Mortgage Lenders (CML), will consist of 12 questions which disclose the full details of all financial and non-financial incentives and also details of any third party interest in the transaction.

CML will also make changes to the conveyancing process requiring developers to disclose incentives, and the Home Builders’ Federation, and Homes for Scotland have amended their code to encourage transparency amongst their membership.

Barry Hall, RICS spokesperson, said: “This change to the 'Red Book' will protect the new build market from fraudulent activity. Buyer, Lenders and Valuers have all been victims of the non-disclosure of incentives by developers with many buyers left with a mortgage worth more than the property’s real value.

“All parts of the property industry are in agreement that standard must be maintained and that the consumer must be protected from any disingenuous practice.”