What is the Red Book’s full name and when is it effective from?
The full name is RICS Valuation – Global Standards (Red Book)
The latest edition is effective from 31 January 2025
What does the Red Book include?
Includes the International Valuation Standards (IVS) and the Red Book UK
All RICS members providing a written valuation must comply unless explicitly stated otherwise
These standards are mandatory
What does the Red Book cover from a valuation provider’s perspective?
Sets out rules and guidance imposed on RICS-registered individuals and firms
Provides a framework for uniformity and best practice
Requires express compliance with RICS standards
Establishes mandatory obligations regarding:
– C – Competence
– P – Performance
– O – Objectivity
– T – Transparency
Mnemonic: C-POT
Explain the standards and guidance naming conventions.
V – VPS: Valuation Technical and Performance Standards
I – IVS: International Valuation Standards
P – PS: Professional Standards
VPGA - Valuation Practice Guidance Applications
Mnemonic: VIP-VPGA
What are the main components of the Red Book?
P – Professional Standards (PS1–2)
V – Valuation Technical and Performance Standards (VPS1–6)
V – Valuation Practice Guidance Applications (VPGA 1–10)
I – International Valuation Standards (IVS)
Mnemonic: P-V-V-I
Summarise the VPS – Valuation Technical and Performance Standards.
T – Terms of engagement (VPS1)
B - Basis: assumptions and special assumptions (VPS2)
A – Approaches and methods (VPS3)
I - Investigation, inspection and records (VPS4)
M - Models (VPS5)
R – Reporting: clear, auditable valuation reports (VPS6)
Mnemonic: TBAIMR
Summarise PS1.
PS1 – General Principles
C – Compliance with the Red Book and IVS, Rules of Conduct
O – Objective and independent valuation
P – Professional competence
M – Materiality and transparency
R – Record keeping and audit trail
Mnemonic: COP MR
Summarise PS2.
PS 2 Valuer’s Role and Responsibilities
C – Confidentiality
C – Communication
C – Compliance and accountability
C - Care (duty of)
P - Professional judgment
Mnemonic: 4C-PJ
What is VPS1?
VPS 1 relates to Terms of Engagement
P – Purpose of valuation
U – Users (intended users)
B – Basis of value
A – Access and inspection arrangements
I – Instructions (clear and agreed)
D – Data sources and restrictions
Mnemonic: PUB-AID
What does VPS2 cover?
VPS2 covers Basis of Value, Assumptions, and Special Assumptions
Requires use of IVS-recognised bases of value
Must clearly state assumptions and special assumptions
Consider market conditions and statutory assumptions
Ensure transparency for all valuation users
State the IVS-recognised bases of value.
Market Value
Market Rent
Investment Value
Fair Value
Synergistic Value
Liquidation Value
What does VPS3 cover?
VPS3 covers Valuation Approaches and Methods
Main approaches: Market, Income, Cost (DRC), and Contractors
Must reflect lease terms, concessions, and market data
Requires application of professional judgement
May include sensitivity analysis where appropriate
Red Book
What does VPS4 cover?
VPS4 covers Inspections, Investigations, and Records
Inspect where practical or justify if not
Record condition, measurements, and relevant factors
Document limitations, third-party data, and assumptions
Maintain a clear audit trail
What does VPS5 cover?
VPS5 covers Valuation Models
Ensure any model used is fit for purpose, transparent, and properly documented
Models must support valuation but do not replace professional skill or judgement
What does VPS6 cover?
VPS6 covers Valuation Reports
Reports must be clear, transparent, and concise
Must include purpose, basis, assumptions, methodology, and sources
Disclose limitations, restrictions, and special assumptions
Must be auditable and understandable by the intended user
What are VPGA’s?
Valuation Practice Guidance Applications
Focus on practical application of standards
Advisory in nature, not mandatory
What are the administrative components of the terms of engagement?
Report & Use – Format, Restrictions, IVS
Firm Info – Fee, Business registration, Complaints
Oversight & Risk – Monitoring, Liability, Compliance
What are the three fundamental requirements in relation to conflict of interest?
Mnemonic
PIC
– P: Prior informed consent must be obtained from all affected parties
– I: Interests of all parties must be protected and proceeding must be justifiable
– C: Clear written records must be kept of decisions, consent, and conflict management
What are the valuation impact factors related to the property itself?
– Locality
– Property type (size, age, construction, access, state of repair, amenities, services, fittings, layout/plan, hazardous materials)
– Site
– Natural or non-natural hazards
– Development potential
Red Book
What are some other considerations that could impact the valuation?
Mnemonic
LET PET – Legal, Environmental, Title, Planning, Enquiries, Taxation
– L: Legal enquiries
– E: Environmental matters
– T: Title
– P: Planning controls
– E: Enquiries
– T: Taxation
What are the three broad valuation needs?
- Investment: valuations to support decisions about acquiring or disposing of assets.
- Operational: valuations for internal management, accounting, or regulatory purposes.
- Occupational: valuations relating to the use or occupation of property, such as lease negotiations.
Red Book
Mnemonic for Surveyors Acting as Expert Witnesses?
- Mnemonic: ICE FAIR
- I – Integrity
- C – Conflicts of interest (avoid/disclose)
- E – Expertise (stay within it)
- F – Format (follow report and procedural rules)
- A – Advocate vs Expert (distinguish roles)
- I – Instructions (must be clear and agreed)
- R – Report must be independent and unbiased
What are the key RICS documents for property measurement and their relevance?
- RICS Property Measurement Standard (2nd Edition, Jan 2018) is mandatory for RICS members and regulated firms. It incorporates IPMS and applies to office and residential buildings.
- RICS Code of Measuring Practice (6th Edition, 2015) is a guidance note, still used for other property types such as industrial and retail where IPMS is not yet adopted.
When do the 2025 Red Book Global Standards take effect?
- 31 January 2025 - Matches the effective date of the 2024 IVS
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Red Book29
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Capital Taxation18
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Valuation - General12
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Local Tax66
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Profits Method8
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Investment Method15
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Residual Method9
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Property Market11
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Accounting10
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Business Planning7
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Client Management11
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Communication and Negotiation12
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Data Management7
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Comparative Method18
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Diversity, Inclusion and Teamworking12
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Ethics30
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DRC Method14
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Sustainability12
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Inclusive Environments9
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Plant and Machinery8
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Inspection and Measurement12
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Dealing With Conflict9
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Health and Safety7
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Key Legislation9
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Local Tax Key Legislation11
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Local Tax Final68
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Red Book Definitions17
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Local Tax Final 111
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Local Tax Final 217
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Local Tax Final 315
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Local Tax Final 415
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Adjustment Of Rents23
