All You Need to Know About Red Book Valuations

Posted on December 16, 2024 by dev@perryhill

All You Need to Know About Red Book Valuations

When it comes to assessing property value, RICS (the Royal Institution of Chartered Surveyors) provides a definitive framework for professional valuations known as the ‘Red Book’. This globally recognised standard ensures transparency, accuracy, and reliability in property valuations.

What is a Red Book Valuation?

A Red Book valuation is more than just a property price estimate – it’s a comprehensive assessment conducted by a RICS Registered Valuer following strict professional guidelines. These valuations provide a robust, legally defensible market value assessment.

When Do You Need a Red Book Valuation?

Any time that you need a formal property valuation for tax purposes or legal proceedings, a RICS Registered Valuer will need to conduct a Red Book property valuation.

Red Book valuations are crucial in several scenarios, including:

Tax planning and probate calculations
Capital Gains Tax assessments
SIPP pension fund asset transfers
Charity property sales (in line with the Charities Act)
Divorce and legal proceedings
Mediation and arbitration disputes
Rent reviews and property negotiations

The Red Book Valuation Process

A typical Red Book valuation involves:

Detailed property inspection
Comparative market analysis
Assessment of three comparable recent property sales
A formal written report detailing the property’s market value

A Red Book valuation is typically valid for three months, but it can be extended in certain circumstances.

Why Choose a RICS Registered Valuer?

Working with a RICS Registered Valuer ensures:

Adherence to international Red Book standards
Rigorous, impartial assessment
Comprehensive property evaluation
Legally recognised valuation documentation

Red Book Valuations from Perry Hill Surveyors

At Perry Hill Chartered Surveyors, our RICS Registered Valuers provide expert Red Book valuations for residential and commercial properties. We combine traditional expertise with contemporary valuation techniques.

Need a Trusted Property Valuation? Contact Perry Hill today.

Disclaimer: Valuations are subject to market conditions and specific property characteristics.

What is the difference between an Interim Schedule of Dilapidations, Terminal Schedule of Dilapidations and Final Schedule of Dilapidations?

Posted on September 4, 2024 by admin

If a tenant mistreats a property or fails to maintain it according to the terms of their lease, the landlord can issue a Schedule of Dilapidations. This process provides a much-needed failsafe for landlords, helping to protect their investment and clarify a fair, appropriate way forward. And for tenants, it helps to avoid nasty surprises – like being presented with a huge repair bill at the end of the tenancy.

What are the different types of Schedule of Dilapidations?

There are, in fact, three different Schedules of Dilapidations: Interim Schedule of Dilapidations, Terminal Schedule of Dilapidations and Final Schedule of Dilapidations. Broadly speaking, they all fulfil the same goal of setting out the tenant’s obligations to bring the property back up to scratch. The difference is they’re used at different points in the lease period.

Let’s take a look at the three options and see how they’re used:

Interim Schedule of Dilapidations (often referred to as interim dilapidations)

This first option is issued during the course of the lease, for example, if a landlord is concerned that proper maintenance isn’t being carried out. The aim of the Interim Schedule is to remind the tenant of their obligations and clarify what’s expected – thereby helping to nip any neglect in the bud and protect the value of the property, while also protecting the tenant from higher repair costs further down the line.

Terminal Schedule of Dilapidations

The somewhat more ominous-sounding Terminal Schedule is used towards the end of the lease, usually within the last 18 months to three years of the lease. This schedule of condition is often more detailed than the Interim Schedule, listing items of disrepair that need to be fixed before the end of the tenancy.

Final Schedule of Dilapidations

The Final Schedule is issued after the lease has expired, in the event that required repairs haven’t been carried out. Similar to the Terminal Schedule, this one will generally set out in detail what works are needed, but, as the lease has already expired by this point, the Final Schedule may also include the cost of lost rent while the repairs are being carried out.

Professional Support from Leading Chartered Surveyors

Managing dilapidations while maintaining a good tenant–landlord relationship can be especially tricky, so professional support is a must. Perry Hill’s team of chartered surveyors guides both landlords and tenants through the schedule of dilapidations process – from carrying out inspections and estimating costs, to issuing paperwork and giving trusted advice.

What is a Photographic Schedule of Condition report? (And how can it benefit landlords and tenants?)

Posted on May 7, 2023 by admin

Last month, we explored what happens when a tenant fails to repair or maintain a building, and how a Schedule of Dilapidations can help to document and address maintenance issues.

Yet, there’s another report that can serve to avoid unexpected maintenance issues and disputes altogether: the Schedule of Condition. Let’s look at what a typical Schedule of Condition covers – and see how it benefits both parties in a commercial lease.

A forensic breakdown of the property’s condition

The Schedule of Condition provides a factual record (including detailed photographs) of the condition of a property. Essentially, it supports the lease by acting as a contractual agreement between the landlord and tenant on the condition of the property, and the repair/maintenance duties for the duration of the lease.

The Schedule of Condition is therefore used at the start of a new lease, and is designed to protect both parties against future disputes – particularly at the end of the lease.

If a landlord or tenant attempts to prepare their own Schedule of Condition without taking professional advice, it’s unlikely to be detailed enough to provide any real protection. That’s why this condition report should always be prepared by a chartered surveyor.

Protecting landlords and tenants

Any commercial lease will have a section covering the tenant’s obligations to repair and maintain the property. Without a detailed Schedule of Condition, the extent of those obligations can be open to interpretation – potentially leading to disagreements further down the line.

Because the Schedule of Condition provides contractual certainty on the state of the property and maintenance requirements, it reduces the risk of unpleasant (and potentially expensive) surprises for either party. What’s more, at the end of the lease, it eliminates the need to spend time and money negotiating any claim for dilapidations.

This peace of mind is priceless for both landlords and tenants. For the landlord, the Schedule of Condition reduces their liability and clarifies their expectations. And for the tenant, they know up front exactly what their maintenance obligations will be.

Get expert help

We at Perry Hill Chartered Surveyors believe the Schedule of Condition is a vital prerequisite when leasing premises, and our team has many years’ experience preparing these reports for both landlords and tenants. Click here to discover how our forensic approach to detail can help protect your interests.

Do I Need a Home Buyer Report or a Building Survey?

Posted on August 20, 2019 by admin

We’re often asked what exactly is the difference between a Home Buyer Report and a Building Survey. Our RICS-registered Chartered Surveyors provide both Home Buyer Reports and Building Surveys for commercial and residential properties.

In this article, we’ll explain the differences between a Home Buyer Report and a Building Survey so that you get the property inspection that you need as part of a house purchase, sale or lease.

What is a Home Buyer Report?

A Home Buyer Report is a type of property survey recommended to the home buyer that provides a review of a property and lists details regarding its structure, condition and other factors that could affect the property.

Considering the costs involved with purchasing a property, it’s a good idea to consider having a property survey taken so you can get a clearer understanding of exactly what you are paying for.

What is a Building Survey?

A Building Survey is another type of property inspection for both commercial and residential properties. A Building Survey goes into a lot more detail than a Home Buyer Report by providing much more detail in the written report.

Building Surveys carried out by Perry Hill Chartered Surveyors provide a 30-page report with around 200 photos, a list of external and internal actions and the likely cost to fix.

Building Surveys are particularly common for older properties and those with obvious structural concerns and for buyers wanting to know the potential cost of problems with the property they are buying. Though the Home Buyer Report does not go into as much detail, it is still adequate inspection for many home buyers.

What is the difference between a Home Buyer Report and a Building Survey?

One of the main differences between a Home Buyer Report and a Building Survey is the detail in which a Building Survey goes into. A full structural Building Survey gives a much more comprehensive review of the property and offers professional advice on the issues raised in the report.

A Home Buyer Report follows a standard format and clearly highlights any property defects. Where Building Surveys can be tailored more to the property and concerns of the party wanting the building inspected, a Home Buyer Report is much more “out of the box”, for homes with a similar construction type, condition, and size.

The Home Buyer Report includes the following:

Traffic Light System of Defects – A traffic light coding system uses green, amber, and red to describe the urgency in which a problem needs to be addressed.
General property information describing the current condition of the property and highlighting any areas to be concerned about.
Reinstatement costs – A Home Buyer Report, if requested, can provide accurate valuation and rebuild costs to be provided to legal advisors and financial lenders.
General repairs advice highlighting the main defects that could affect the value of the property.

A Building Survey also includes the following:

Detailed research – Prior to the building inspection, detailed research will be carried out to find out more about the land, location, and property history.
Detailed advice – A Building Survey will highlight issues and concerns in the building, and also provide professional advice about the time and cost of repairing the urgent defects. In addition to this, a building survey will outline the cause of any issues so you can address these also.
Tailored reporting – The opportunity to discuss concerns regarding the building and tailor the inspection and report to these.

What are the Benefits of a Building Survey?

A Building Survey provides a detailed report with expert opinions that can be used to guide your decision as to whether or not a property is considered a good or bad investment. A Building Survey is often considered an investment within the property industry and can help you avoid costly issues you may not have been able to foresee.

The Building Survey gives you a detailed evaluation of problems and is entirely in your best interests upon deciding to purchase a commercial or residential property. The benefits of a Building Survey include:

Actionable Insights – Building Surveys don’t just highlight problems, they provide solutions too. With professional opinions and advice, a building survey investigates each issue to find the cause of the problem and provide you with options for repairing and preventing it from happening again.
Budgeting – A Building Survey gives you the opportunity to budget towards the repair costs needed to fix and maintain the building.
Negotiation – With the results of a Building Survey you can negotiate the price with the seller to factor in the condition of the property and the repair costs you will need to consider.
Extremely detailed – A Building Survey looks at more than just obvious defects that can be seen on the surface. The Building Survey digs deeper and examines under flooring, between walls and on the roof. A building surveyor may also use various tools to help determine any issues that cannot be seen by the naked eye, whereas other surveys simply report on noticeable and obvious defects.

A Building Survey is also extremely valuable to sellers that need to know the steps they should take prior to selling a property. Those investing in a Building Survey report will receive factual information, advice, and priorities outlining which parts of the building need addressing, the potential costs, and time needed. This information allows the sellers to address these issues before putting the property on the market and will considerably increase the value of the property once resolved.

Building Surveys are particularly common for commercial premises such as industrial units, retail spaces, and office buildings.

Building Survey Process with Perry Hill Chartered Surveyors

When you contact one of our RICS Chartered Surveyors we will discuss with you any information you can provide to us about the property, and find out more about why you would like to obtain a Building Survey. This information will guide us through the process and allow us to provide closely tailored advice and recommendations throughout our inspection and within the detailed report that will be delivered to you within 10 working days of the property inspection.

On the inspection day, we will arrive at the property at an agreed time and will begin to inspect the property room to room. We will have with us the equipment needed to enter roof spaces and outbuilding, as well as camera equipment to take photos of the roof, and will spend a few hours carrying out the Building Survey.

After this stage, we will compile our findings into an extensive document that comments and advises on the best way to approach any property defects found during the inspection, together with photographic evidence. We break down the key actions that need to be fixed both externally and internally, with a budget to fix the issues so that you can see how much the work is likely to cost.

Once you have received your property report, we will be happy to discuss the report in detail with you to ensure that you understand everything completely. If you have any questions at all or would like to seek further advice, we will be happy to help.

Contacting Perry Hill Chartered Surveyors

There are differences between Home Buyer Reports and Building Surveys, but it is important that you seek trustworthy guidance as to the survey your property would be better suited towards. Our helpful team of RICS surveyors will give you the advice you need about the different property surveys and help guide you in the right direction.

Perry Hill Chartered Surveyors provide property inspection services throughout London and the wider South-East region. Our clients range from both commercial and residential and recognise the quality and attention to detail covered in both our property survey reports and customer service.

Please find more information about Building Surveys at our dedicated Building Survey Reports page, or Contact Us to speak to a member of our team.

Why You Should Get a Pre-Building Schedule of Condition Report Before Commencing Building Work

Posted on August 20, 2019 by admin

When carrying out construction work on your property, there’s always a risk of damage to a neighbour’s property – especially in terraced and semi-detached properties. To help reduce liability and scope for neighbour disputes, it’s well worth investing in a pre-building Schedule of Condition report before work starts.

What is a Schedule of Condition?

The Schedule of Condition is essentially a building survey, but one designed to record the condition and defects of an adjoining property. It’s a forensically detailed report (including photographs) itemising the full condition of the neighbouring property pre-works.

Why document the condition of your neighbour’s property?

Because it reduces your risk in the long term. For example, if your neighbour files a claim for damages resulting from your building works, you’ll have a complete, independent record of their property’s condition before work started, and this will help to determine whether their claim has any grounds.

What sort of construction work are we talking about?

At Perry Hill, we recommend getting a Schedule of Condition report in advance of any building project that might impact neighbouring properties. This may include a rear extension, structural alterations, loft conversion or basement conversion. The report can be used for both residential and commercial properties.

Investing in peace of mind

Construction work can be stressful and disruptive. If there’s one thing you don’t need on top of that upheaval, it’s a dispute with the people next door. For you and your neighbour, the Schedule of Condition report provides important reassurance, because both parties know there’s a factual record of the adjoining property’s condition before work started.

Then, when the construction work is finished, a further inspection can be carried out, checking off against the Schedule of Condition report and confirming whether any damage or issues have arisen as a result of the works. It’s a sensible way to maintain good neighbour relations before, during and after a building project.

To find out how a pre-building Schedule of Condition can help ensure your construction work is a success, talk to Perry Hill. Our team of chartered surveyors can carry out all kinds of building inspections and reports, and provide trusted advice on the best way forward for your property.

Why would a landlord issue a Schedule of Dilapidations?

Posted on July 18, 2019 by admin

It’s typical for a lease to set out certain obligations for the tenant in terms of keeping the property in a good state of repair. When a tenant is in breach of these requirements – perhaps by neglecting maintenance or misusing the property in some way – the landlord may issue a Schedule of Dilapidations.

What does the Schedule of Dilapidations cover?

In simple terms, the Schedule of Dilapidations is a document stating that the tenant has failed or is failing to repair/maintain the building. It will usually set out items of disrepair and what needs to be fixed; however, some Schedules of Dilapidations are more detailed than others, depending on whether they’re issued during the lease (known as an Interim Schedule of Dilapidations) near the end of the lease (Terminal Schedule of Dilapidations) or after the lease has expired (Final Schedule of Dilapidations).

A proactive approach to maintenance issues

As a landlord, why would you go to the trouble of issuing a Schedule of Dilapidations? The benefits are clear:

Maintenance issues can be flagged and addressed early, instead of letting problems get worse.
The Schedule of Dilapidations requires the tenant to take action, thereby providing a clear, legal way forward.
It reduces the risk of financial loss and helps to protect the value of your investment – remember, the cost of issuing a Schedule of Dilapidations may be a fraction of the cost of repairs or lost rental income further down the line.
If the tenant doesn’t fulfil their obligations, you have a paper trail to support a claim for damages.

It’s worth noting that the Schedule of Dilapidations benefits the tenant, too:

They have an itemised list of what work is needed, and in the event of a dispute, the Schedule serves as a useful starting point for negotiations.
The tenant can get on top of maintenance issues before they become major, expensive problems. No one wants a big, unexpected repair bill at the end of their tenancy!

At Perry Hill Chartered Surveyors, we work with both landlords and tenants to resolve dilapidations claims, and provide support with all aspects of dilapidations – from conducting inspections to issuing the paperwork. Let us help you navigate this potentially difficult process with confidence.

What is a Home Buyer Report – and is it right for you?

Posted on June 4, 2019 by dev@perryhill

If you’re buying a house or flat, you might be thinking of getting a Home Buyer Report. This inspection report looks at the property’s structure and overall condition, highlighting whether there are any major problems with the property.

The Home Buyer Report tends to be the preferred inspection report for UK buyers, but it’s not the only option. Here’s what you need to consider.

Remember, it’s not a full building survey

Many buyers think the Home Buyer Report is a formal structural survey, when it’s not. A Home Buyer Report gives an overview of the property’s condition, and is designed to flag urgent, visible issues that may affect its value. But it doesn’t look beyond what’s immediately visible. For example, the surveyor wouldn’t lift carpets or look at wiring.

The Home Buyer Report is therefore a sensible choice for conventional, fairly new properties in reasonable condition. For other properties, the Home Buyer Report may not be detailed enough.

How does a building survey differ?

A building survey (also known as a Full Structural Survey) is the most detailed type of property inspection you can choose. Not only does it cover the visible issues that are included in the Home Buyer Report, it also looks for issues that may not be immediately visible, such as woodworm in structural timbers. It also details the apparent cause of problems, how urgent they are, how they should be fixed, and how much it might cost. This information is incredibly valuable for buyers – particularly when it comes to negotiating a reduced price.

As an example, we recently carried out a building survey that found £80,000 of work was needed – a huge cost, and one that the buyer hadn’t factored into their budget. Armed with this advice, they were able to renegotiate with the seller.

Doesn’t a building survey cost more?

In a word, yes. Building survey costs vary according to the property, so each case is different, but in terms of value for money, we think the building survey wins hands down. As the previous example shows, it can save you a fortune in the long run.

At Perry Hill Chartered Surveyors, we’ll discuss your goals before the inspection, so that we can provide the information you need. Say, for example, you want to extend the property in future, we can tailor the report to include this and highlight potential issues. This way, we make sure you get maximum value for money.

Bottom line: a building survey is a worthwhile investment. Get the advice you need to make an informed purchase decision.