Red Book Valuation Meaning
A Red Book Valuation is a formal property valuation conducted by a RICS-registered surveyor in adherence to the RICS Valuation Global Standards, known as the "Red Book".
Unlike an estate agent’s valuation, which is typically an informal estimate, a Red Book Valuation provides an independent, legally recognised assessment based on strict professional criteria. It's also only valid for three months, after which a reassessment may be needed.
It is commonly required for mortgage lending, probate, tax calculations, legal disputes, and property sales.
During the process, the surveyor inspects the property, reviews relevant documents, and analyses market data to determine an accurate valuation.
The "Red Book" name comes from the red cover traditionally used for RICS valuation standards.
When Do You Need a Red Book Valuation?
You will need a Red Book Valuation when your circumstances or the situation demands a valuation that meets the high standards set by the RICS Rred Book guidelines.
The following cases are a few examples of when a Red Book Valuation would be needed:
Probate
Divorce proceedings and settlements
Capital Gains Tax
Inheritance Tax
Loan security
Pension fund transfers
Tax planning
Property disputes
Property sales by charities
Shared Ownership
Help to Buy
Lease extensions
Mortgage lenders and loan companies may need a Red Book valuation before making a formal loan offer. Though this type of valuation is not a requirement when selling, it can be beneficial. It provides a rigorous and detailed valuation of their property, helping sellers set sale prices.
If you are unsure if you need a Redbook Valuation you should consult a RICS surveyor for guidence.
Who Can Provide a Red Book Valuation?
Only RICS Certified Chartered Surveyors can carry out Red Book valuations. They must be qualified and members of the Royal Institution of Chartered Surveyors, adhering to the standards set out by the organisations.
They must also be a member of the RICS Valuation Registration Scheme and operate as a Registered Valuer (RV).
Red Book valuations must be prepared in accordance with the RICS Valuation – Global Standards (incorporating the IVSC International Valuation Standards) effective as of 31 January 2022.
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What is Included in a Red Book Valuation?
The Red Book valuation involves an inspection of the home and market research to determine the value of the property. It ensures the valuation is clear, justified and can be used in legal proceedings.
This thorough process and extensive research by the surveyor is why RICS Red Book valuations are so revered. They produce a high level of accuracy and a timely valuation of a property that holds validity in a range of legal and tax-related cases.
The process is broken down into the following steps:
Research
Your chosen surveyor will agree “terms of engagement” in an official letter. The title and any lease documents are checked. They will also check for any conflict of interest regarding the valuation, sale or purchase of the property .
Comparable properties
To get an idea of the local market value, your surveyor is required to inspect three “comparable” properties that have sold in the last 6 months in the area
Property inspection
Your surveyor will inspect the property inside and out to review the size, property type and condition. This is not the same as a property survey but they will note any glaring concerns with the structure.
Planning consents and utilities
Your surveyor will check current and historic planning consents for the property (and for any sites in the vicinity). They will research rights of way, restrictive covenants, and chancel repair liability. Flood risk and land contamination will be checked, in addition to the efficiency of utility services.
Report
Finally, they will review their research to calculate a suitable valuation and present the findings in an official written report.
Red Book Valuation vs Market Value Appraisal
The Red Book valuation differs from a simple market appraisal. This is due to the valuer’s qualifications that are required to carry out the valuation. They also must adhere to the Red Book guidelines, which a market appraisal will not.
Red Book valuations are formal, precise, and evidence-based. They are legally required for legal matters and tax purposes.
As a result, they will be more exact than a market appraisal or valuation from an estate agent which is often speculative. They will suffice for selling a house but for legal and financial purposes, a Red Book valuation will be required. A market appraisal will not be accepted for these proceedings.
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How to Arrange a Red Book Valuation
Finding a RICS surveyor is the first step in arranging a Red Book valuation. Compare My Move can connect you with up to 6 surveyors who have the experience and knowledge to provide a comprehensive formal report.
Save up to 70% on your costs by completing our surveying comparison form and getting connected with the best professionals in your area.
All our surveying partners have passed our strict verification process. Companies offering property surveys and valuation reports must be registered by RICS.This way you know they will always work to the highest global standards in the industry.
The process of a Red Book valuation is relatively straightforward. Once you have spoken to a surveyor and arranged a date for the survey, there is nothing you need to do until your report is ready.
The inspection itself will take between 1.5 - 6 hours, depending on the size and age of the home. Reports are usually ready in 5 working days, depending on how busy your surveyor is.
Frequently Asked Questions
How long does a Red Book valuation take?
A Red Book valuation will take between 1.5 and 6 hours to complete on the day. Reports are then provided on average 5 working days from the date of the valuation. This time frame can vary depending on how busy your surveyor is or if there are complications.
What factors impact the valuation?
Several factors can impact the valuation of a residential property. These include, but are not limited to:
- The size of the home (number of bedrooms)
- The overall condition of the home
- If original features remain in older or historic homes
- If an extension, loft conversion or conservatory has been added to the home
- Improvements made to the property
- Improvements made to the energy efficiency of the home
To read more on what adds value to a home see: How to Add Value to Your Home
Do I need a Red Book valuation to sell my home?
You are not legally required to have a Red Book valuation to sell your home. However, a RICS valuation will be beneficial, especially as it will be more accurate than a valuation from an estate agent.
RICS valuations are unbiased and will give a true assessment of your home’s value. Estate agents may slightly inflate the valuation figure to encourage you to use their services.
How much is a Red Book valuation?
A RICS valuation report costs around £452*, based on a house priced at £292,000. This can be as low as £160 and as high as £600 or more.
Why is a Red Book valuation important for probate?
It is important to arrange a Red Book Valuation if the deceased owned property and probate is required. This will help you obtain the grant of representation.
For more information see: What is a Probate Valuation?
*Based on the average service costs for Compare My Move users. See how our data works.
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