Posts tagged: RICs
The Royal Institute of Chartered Surveyors, (RICS) has issued a bleak forecast for the immediate future of the property market and claims that there will be no recovery in sight while the current economic uncertainty remains.
Contrary to RICS comments, there have been reports of an increase in sales and buyer demand for November but the institution make clear that this has come on the back of a sustained period of subdued activity.
Individual surveyors showed a modest increase of 15.4 sales on average per branch as opposed to 15 a month earlier. This was the third consecutive month that figures had risen but forecasts from RICS predict a drop in sales in the very near future.
‘It is encouraging that buyer interest has edged upwards in the face of the endless diet of negative news from Europe and the turmoil in financial markets. However, a meaningful recovery still seems some way off.’ said Alan Collett, housing spokesman for RICS.
An overall picture shows that there was a small increase in house prices too with a 0.6% rise in November, compared to the previous month. However the figures still represent a 0.4% drop from the same point last year.
Regionally, those figures varied and while increases were recorded in London for example, a drop was reported for England as a whole.
As for the reasons behind the gloomy outlook, RICS has pointed to an uncertain economic future as the main reason why a sustained period of housing market growth seems unlikely for the time being at least.
In a survey at RICS, their surveyors were asked to identify all the reasons they felt were culpable in keeping the market in check. By far the largest culprit was the economy, where 89% of all surveyors felt that this was a significant factor.
Elsewhere, 70% of those surveyed blamed the current availability of mortgages while 42% pointed to the fear of house price falls as a reason for the present stagnation of the market as a whole.
The news coming out of these figures can be summed up by the quote given by Alan Collett: On the one hand there is some encouragement and relief to find an upturn in the gloom but this is fully tempered by the overall picture.
A steady, significant rise in the housing market could be a long way off and it seems that economic uncertainty has to be addressed before any remaining issues are taken into account.
A home’s sustainability characteristics should be considered within property valuations, according to a new information paper, entitled Sustainability and Residential Property, launched 20 Sepember by the Royal Institute of Chartered Surveyors (RICS).
The issue of sustainability is not currently viewed as significant to property market value. However, this is changing and RICS is suggesting that, should a home possess sustainability features, which are likely to have an impact on value, this should be reflected in a valuer’s assessment of the property.
Sustainability features can include a home’s energy efficiency rating, the materials used in its construction and other features such as an energy-efficient boiler. Although, elements such as a building’s proximity to public transport links and its ability to adapt to occupiers’ changing future needs could also be considered.
Sustainability, which covers a broad range of physical, environmental and social factors, is moving progressively higher up the coalition government’s agenda. It is likely that residential markets will become progressively sensitised to sustainability considerations. Therefore, RICS feels residential property valuers should be fully aware of the sustainability characteristics of buildings when carrying out a valuation. Also important is consideration of legislation and policy that can influence current and future value.
Ben Elder, RICS Global Director of Valuation, said: “Although market awareness of sustainability has risen significantly, attention is currently focused largely on a home’s energy efficiency, propensity to flood and carbon emissions. However, a property’s sustainable status can cover a range of social, environmental and economic matters that can potentially lead to changes in demand and therefore affect value.
“With the increased emphasis on green living and energy efficiency, it is highly possible that the market will need to adapt. This new information paper offers advice to our members, recommending that they are fully aware of sustainability policy and the characteristics of individual buildings when valuing property.”
Anwar Harland-Khan, CEO of Sustain Worldwide, an exclusive membership organisation of sustainable developers and industry professionals delivering sustainability, said: “We welcome the RICS information paper, while noting that in our opinion it is long overdue that the valuation industry recognised the inherent value premium in sustainable property.
“It stands to reason that today’s sustainable homes have a value premium. They are cheaper to run because they are better insulated and require less heating and mechanical cooling, and they are fitted out with ‘hands off’ energy saving applications. What’s more they will increase in value faster because these homes are more ‘future proofed’ than a conventionally built existing house that will require expensive retro-fitting.”
Gordon Miller is sustainability & communications director of Sustain Worldwide. He writes for The Financial Times and The Sunday Times and founded eco homes website whatgreenhome.com and local energy and awareness social enterprise The High Barnet Green Home Zone.
For more information about Sustain Worldwide’s members’ luxury sustainable homes, resorts and communities, visit www.SustainWorldwide.com or call +44 (0)20 7754 5557
Ian Cowie wrote a fantastic piece for The Telegraph recently entitled ‘A nasty surprise for ‘penny wise’ homebuyers despite falling house prices which made a salient point that home buyers who opt to buy a house without an independant survey often have to pay for unexpected building works after moving in.
This stems from a recent report by the Royal Institute of Chartered Surveyors (RICS), which found 25% of people who bought houses solely based on the mortgage valuation report later needed unexpected building work costing them on average over £1800 after they moved in.
The purpose of a mortgage valuation is for the lender to assess whether the property you’re dying to buy is actually worth what you think it is – and what you’re trying to borrow. Mainly so that if you can’t pay your mortgage they can take the house and not lose money.
For that reason alone the lenders valutation is for the benefit of the lender, not for you the buyer. Although it can be a good guide for you concerning the value of the property, it can be a very basic survey and doesn’t look at the structure and condition of the building in any great detail.
Many lenders now offer buyers the opportunity to pay a little extra and get a more detailed condition report as part of their basic valuation survey and it is this that you really need to highlight any rising damp, dry rot, dodgy chimneys and wonky walls.
If you’re not getting a mortgage you can arrange a home condition survey yourself by contacting an RICS surveyor to get a house survey quote who will be qualified to assess the structure and condition of the property and provide advice and likely costs of any work that needs doing to the house – before you complete the transaction, let alone move in. This can be most useful for picking up underlying issues before you buy the house and giving you the opportunity to discuss these with the seller and if necessary adjust the price to reflect the cost of any works that need doing.
You can expect a home survey quote to cost between £350 and £400, and if you instruct a buildings surveyor yourself and not through your lender you have the added advantage that if anything is missed you will have some come-back under the Surveyor’s professional indemnity insurance – effectively insuring yourself against any unforeseen problems. Although in the vast majority of cases the surveyor will pick up any issues in his detailed building condition report prior to you buying the house.
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The latest RICS (Royal Institute of Chartered Surveyors) house price survey shows that house prices have stalled as increased supply has put pressure on prices.
As prices rose in 2009 many commentators suggested this was a false dawn created by a lack of supply in the market – those commentators will see this as the first stage in their projections playing out.
Overall market activity is still relatively slow as buyers are concerned with the prospect of tax increases, interest rate rises and the low avasilability of competitive mortgage products.
RICS spokesperson Jeremy Leaf said: ‘Most market indicators are still positive and consistent with further house price increases. However the magnitude of the gains going forward is likely to continue to ease reflecting the fact that new supply coming onto the market is starting to outstrip fresh demand.’