Property valuation in the UK: material uncertainty and COVID-19

Abstract

Purpose: An understanding of uncertainty has always been an integral part of property valuations. No valuation is certain, and the valuer needs to convey to the user of the valuation in the degree of uncertainty pertaining to the market value. Design/methodology/approach: This practice briefing is a short overview of the importance of understanding uncertainty in valuation in normal markets and the particular difficulties now with the material uncertainty created by the COVID-19 pandemic. Findings: This paper discusses how important it is for the valuer and the client to communicate and understand the uncertainty in the market at any point of time. The COVID-19 has had a significant impact on property values and the importance of clarity within valuation reports. Practical implications: This paper looks at the importance of placing capital and rental value changes due to material uncertainty in valuation reports. Originality/value: This provides guidance on how professional bodies are advising their members, around the world, on how to report valuations and market value in the context of material uncertainty.