Valuation

Question 1

Sherrington Manor Valuation figures

Answer 1

Final - £5,940,000.
Farm buildings at £20 per sq.ft , Pasture at £8,500 per acre - 10% deduction due to FBT.

Question 2

Term and Reversion

Answer 2

Cottage rent ag act
market value £550,000.00

Term 20 years
Rent £10,800.00
YP 20 years @ 2% 2% 16.350
Value of the Term £176,580.00 £176,580.00

Reversion to FMV
Market value £550,000.00

PV £1 in 20 years @ 6% 0.312
Value of the Reversion £171,490.00

Total Value £348,070.00

Question 3

Sunnybox Lane Figures

Answer 3

Final Figure - £720,000 with special assumption of pp.
GDV = £5,925,000
Costs and developers profit (20%) = £5,204,270

Question 4

What is included in the costs for a residual val?

Answer 4

Build costs, Agency Fee (say 1.5% of GDV), planning, legals, costs of finance. Then developers profit too.

Question 5

What Charities Act Considerations did you make?

Answer 5

How it should be marketed, steps to enhance value, any other matters. Advertise on open market online, one plot. Gain PP first.

Question 6

Heaselands figures

Answer 6

Resi = 4.65m, ag land = 2.785m commercial = 670k
Total = £8,105,000 total

Question 7

Market value definition

Answer 7

The estimated amount for which an asset or liability should exchange on the valuation date, between a willing buyer and a willing seller in an arm’s length transaction after proper marketing where the parties have each acted knowledgably, prudently and without compulsion.

Question 8

Market Rent definition

Answer 8

The estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm’s length transaction after proper marketing where the parties have each acted knowledgably, prudently, and without compulsion.

Question 9

New Red Book

Answer 9

The RICS Valuation - Global Standards (December 2024), effective 31st January 2025.
Applies when valuation date is on or after 31/01/2025.
To align with new IVS effective 31/01/25.
New content relating to valuation modelling and methods.
VPS 1 - ESG must be referred to in ToE and VGPA8 - valuer must consider significant ESG impacts
VPS 6 - must state if valuation model or software has been use.

Question 10

Five methods of valuation

Answer 10

Comparable
Investment
Residual
Profits
Depreciated Replacement Cost

Question 11

when is red book not required

Answer 11

• in preparation for negotiations or litigation
• agency - market appraisals
• internal purposes
• expert witness
• statutory functions