Valuers urged to alter methods: Profession told 'aura of mystique' must go. Tom Stevenson reports

THE Mallinson Report on surveyors and property valuations does not pull its punches. 'Our enquiries have made it clear to us that some radical steps are needed if the profession is to hold its ground and its reputation,' it observes.

Michael Mallinson, the former Prudential property director who wrote the report, says valuers must remove the 'aura of mystique' from their work.

Accordingly the report, commissioned by the Royal Institution of Chartered Surveyors, makes more than 43 recommendations for change.

Its publication comes in the light of the Queens Moat Houses affair, which saw two leading firms of surveyors come up with six different figures over two years for the value of the hotel chain.

One of the report's key recommendations is that the Rics should be given increased investigatory powers to ascertain whether surveyors have acted in accordance with professional guidelines.

The Rics is unlikely to be given the power to question subjective assumptions, such as appropriate investment yields, but it is expected to have the power to call in valuers' papers for scrutiny and develop clear rules under which members can be disciplined.

The Queens Moat case highlighted the subjectivity of assessing properties where values depend on future business.

The report says valuers should never state a figure without indicating the valuation basis adopted. They should also be more honest about the uncertainties that surround their work.

Greater communication with clients could help prevent legal actions such as the writ issued this week against Richard Ellis by Nykredit, the Danish bank. The bank is taking the agent to court over a pounds 37m valuation on a London site in 1990, two years before it sold for pounds 6.8m.

The case highlighted the need to refine valuation methods which depend on an analysis of similar transactions and investment yields.

The report says the Rics should investigate alternative methods and adds that when a valuation is dependent on trading potential with no reliable comparisons it should say so.

The potential failings of current methods were highlighted during the flotation of the out- of-town shopping developer, Capital Shopping Centres. Its directors disagreed with DTZ Debenham Thorpe's valuation of its centres.

They argued current valuation methods failed to take into account the growth potential of immature shopping centres which do not reach their full trading potential for up to 10 years after they are opened.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy
Number of young homeless in Britain 'more than three times the official figures'

'Everything changed when I went to the hostel'

Number of young homeless people in Britain is 'more than three times the official figures'
Compton Cricket Club

Compton Cricket Club

Portraits of LA cricketers from notorious suburb to be displayed in London
London now the global money-laundering centre for the drug trade, says crime expert

Wlecome to London, drug money-laundering centre for the world

'Mexico is its heart and London is its head'
The Buddhist temple minutes from Centre Court that helps a winner keep on winning

The Buddhist temple minutes from Centre Court

It helps a winner keep on winning
Is this the future of flying: battery-powered planes made of plastic, and without flight decks?

Is this the future of flying?

Battery-powered planes made of plastic, and without flight decks
Isis are barbarians – but the Caliphate is a dream at the heart of all Muslim traditions

Isis are barbarians

but the Caliphate is an ancient Muslim ideal
The Brink's-Mat curse strikes again: three tons of stolen gold that brought only grief

Curse of Brink's Mat strikes again

Death of John 'Goldfinger' Palmer the latest killing related to 1983 heist
Greece debt crisis: 'The ministers talk to us about miracles' – why Greeks are cynical ahead of the bailout referendum

'The ministers talk to us about miracles'

Why Greeks are cynical ahead of the bailout referendum
Call of the wild: How science is learning to decode the way animals communicate

Call of the wild

How science is learning to decode the way animals communicate
Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'