Valuation Examples

Question 1

Level 2 - Tell me about your residential in Shropshire?

Answer 1

I valued a pre-1900s semi-detached house in Shropshire. From the photos provided in the instruction I could see that the property was dated and in need of modernisation. Bathroom and kitchen suites were dated.

I used internal records to identify comparable sales which I cross-referenced with third party databases such as Rightmove to ensure its reliability. I weighted the evidence to reflect how comparable each piece of evidence was to the subject property in terms of size, age, condition, date of sale and locality.

From this identified range I was able to form my opinion of value which aligned with the value returned.

I discussed my value with a senior surveyor who agreed with me. I then reported the value was reasonable to the client.

Returned value was £300,000. I had identified a range of £280,000 to £360,000.

Question 2

Level 2 - Tell me about your community centre in Tamworth?

Answer 2

A community centre in Tamworth built in 2003 of masonry construction with a mix of pitched metal sheeted roof and flat felt roof.

1) I first established the gross replacement cost of the building using BCIS for costs and multiplying that by the GIA of the building.

2) I depreciated for age and obsolescence such as to reflect the poor condition of the flat felt roof.

3) I established the land value, I sourced developed land comparables

4) I added the land and building values together to establish the depreciated replacement cost.

5) I then took a stand back and look approach. I discussed with a senior surveyor who agreed with my valuation.

Question 3

Level 2 - Tell me about your Office in Bridgnorth?

Answer 3

I valued a pre-1900s 1st floor office in Bridgnorth for IHT purposes. It was of brick construction and a pitched tiled roof.

I identified that the lease had expired at the time of the valuation so I decided a rack rented approach was appropriate to apply.

I determined what the market rent was based on comparable evidence in the locality and capitalised this into perpetuity with an appropriate market yield sourced from comparable evidence. I cross referenced this information by contacting the listing agent to clarify that it was accurate.

I advised a senior surveyor of my opinion of value to which they agreed and i advised the client the returned value was reasonable.

Question 4

Level 3 - What advice did you give in your Red Book Report in Telford?

Answer 4

I assisted with a Red Book valuation regarding the potential disposal of an unused doctors surgery in Tamworth.

I advised the client that I would need to inspect the property to ascertain the internal condition. On inspection I noted it was in a poor state of repair and required modernisation. I noted that a small part of the ceiling had holes, I advised the client of this and that they should get an expert to provide further guidance to them.

I identified comparable sales evidence which were similar in location, age and size. I placed them in a hierarchy of evidence after making any necessary adjustment and formed my opinion of value. I advised a senior surveyor of my valuation to which they agreed. This was reported back to the client who agreed with the valuation.

Question 5

Level 3 - What advice did you give in your Retail, Wolverhampton?

Answer 5

This is a pre-1900s retail premises of brick construction. I was instructed to value a retail premises for IHT purposes which had an existing tenant.

I advised the ratepayer to provide a copy of the lease and photographs of the property as this would help me in adopting the appropriate investment approach and identify comparable properties.

I adopted the hardcore/layer method because market rents showed the property to be above them.

I capitalised the market rent into perpetuity and then capitalised the top slice for the remainder of the lease term at a higher yield to reflect the higher risk of over-renting. I then added the two values together.

I advised a senior surveyor of my reasoning behind my approach and the yields used, noting that a higher yield was appropriate for the top slice to reflect the higher risk involved. They agreed and I advised the client the returned value was acceptable.