Residential property often represents a significant portion of the value of a deceased estate. An accurate assessment is therefore necessary to assess inheritance tax. Residential property valuations peg that value as on a particular day.
Residential Property Valuations Are Time-Bound
UK property prices have been volatile lately. Therefore, we need to know the current value of a particular property when we buy or sell. However, if we are valuing a property in a deceased estate, then we need to go back to the day when the deceased passed away.
A valuer in good standing with Royal Institution of Chartered Surveyors (RICS) determines property market values as follows:
- A willing buyer would pay the assessed price assuming they are rational and not under pressure.
- A willing seller would be willing to pay the assessed price, assuming they are rational and not under pressure.
- The property has been on the market for a while. The seller is neither over-eager nor reluctant.
The Benefits of RICS Property Valuations
There are a number of advantages to insisting on RICS residential property valuations for deceased estates. For if you do, then you will have the services of a registered valuer at your fingertips, who knows exactly what to do.
That’s because they work to a ‘gold standard’, and are answerable to Royal Institution of Chartered Surveyors for their actions. Moreover, they will use the same tried-and-tested methods as their colleagues worldwide.
All regular RICS valuations are date-stamped, and are usually only valid for three to six months. However, those for probate purposes are timeless, because the clock stopped when the deceased departed.
How Do RICS Residential Property Valuations Work?
A RICS valuer draws their inputs from two sources. The first of these involves a personal visit to the property to familiarize themselves. After that, the RICS investigation enters a second phase, involving extensive desk research. These inputs ensure the RICS professional is up to speed with the following factors affecting residential property valuations in the United Kingdom:
- Construction of the property and the structural materials used.
- Size of the main building, the extent of the land, and any outbuildings.
- Condition of these structures, and if there are any serious defects.
- The quality of any recent extensions, additions, and loft conversions.
- Location of the property, positive and negative aspects of environment.
A RICS surveyor will also determine the prices of three recent comparable properties that sold recently in the area. Although, in the case of a deceased estate, they will survey comparable sales around the time of death.
Property Valuations Are Not Building Surveys
Property valuations are not the same as building surveys. Surveys concentrate on reporting defects, which can be costly to repair. This provides valuable information to purchasers, but how relevant is this to deceased estate executors?
The short answer is that this information is irrelevant to deceased estate executors. They only need a fair value they can report to internal revenue service, so they can close out the estate.
Property Valuations Versus Estate Agent Appraisals
Estate Agency Appraisals
Estate agencies seldom charge for property appraisals. This is because they hope to secure mandates, and earn commission from selling the property.
Their estimates are seldom as accurate as RICS residential property valuations. Estate agencies may pitch them high in the hope of earning generous commission, or reduce them to start a bidding war:
- Estate agent valuations often focus on cosmetic aspects that stimulate buyer interest.
- They depend on recently sold local prices, and have no obligation to consider wider market trends.
- Estate agents are not legally accountable for inaccurate estimates, unlike RICS valuers.
- They have a personal pecuniary interest, and are understandably keen for quick sales and high commissions.
RICS Residential Property Valuations
RICS certified valuers do not have a pecuniary interest beyond the fee for their report. Therefore, their opinions are generally more objective and balanced:
- RICS valuers are unbiased.They may not value a property if they have a personal interest.
- They determine fair and accurate market values that willing parties will accept.
- These values include any major defects. They understand how to spot and assess these.
- RICS valuers have access to wider data bases, and must review three comparable properties.
- They are accountable for their opinions. They are able to defend these in court is necessary.
Avery Associates Panel of RICS Surveyors
Avery Associates has a panel of qualified and experienced RICS property assessors, all able to complete accurate and timely residential property valuations. They tackle any type of property, whether industrial, commercial, residential, agricultural, or undeveloped land.
Call Avery Associates in Greater London Tooting on 0800 567 7769 or 0208 640 00 44 to learn more about us. Please rest assured of our prompt and courteous service, and of our careful attention throughout your RICS valuation project.
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