RICS updating Red Book UK Supplement
RICS is undertaking an update of the Red Book UK Supplement with the aim of issuing a new version in early 2023. The current version was issued in 2018 and was effective from January 2019.
A principal reason for the review is to reflect some of the recommendations of the Pereira Gray review of investment valuation issued in early 2022 but the opportunity is also being taken to update other content to either reflect legislative or regulatory changes over the past four years and to revisit any content where member feedback has indicated the need for clarification.
Since the "Call for Views" in the spring of 2022 various specialist groups have been working on changes considered necessary. On 1 November a full Consultation Draft was published, with a closing date for comments of 14 December 2022.
The main changes are in the following content:
Public sector valuations. (UK VPGAs 4 & 5)
Financial reporting in the UK (UK VPGA 1)
Changes to VPS 3 - Regulated Purpose Valuations arising from Pereira-Gray Review:
Procurement and instructions
Separation of valuation and advisory services
Residential Valuation - updating on content and merger of the four separate UK VPGNs 11-14 into a single document.
We have produced our own overview of the main changes and our comments on them. Have a look as see if you agree with our comments. We have particular concerns over some of the detail of the changes to UK VPS 3 around valuer rotation, the possible removal of the guidance on valuations for tax purposes and on the proposed wordingfor defintion of a value that assumes a forced sale.
Longer term changes:
Although not one of the specific recommendations the Pereira-Gray report included the following general observation:
For RICS valuers in the UK the Red Book has grown from about 200 pages to over 450 pages over the past twenty years. We therefore have considerable sympathy with this comment. Except for frequent changes in the title of different types of content, the current structure, scope and layout has remained essentially unchanged over this period and was determined by the physical and economic considerations of publishing in hardcopy. The much greater flexibility afforded by softcopy and online publishing to make it easier for members to find content relevant to their area of practice has not really been explored.
This necessarily is a longer term project which has to start with the Global Standards, so the current UK review is focussing just on changes required in the short term. We know this wider issue is on the agenda of the RICS Global Valuation Standards Working Group, so expect to see further announcements later this year. In the meantime we have set out our thoughts on some strategic issues which we believe RICS should be considering. These can be seen by clicking on the five headings below. We have included questions which may help prompt you to tell RICS what YOU think, whether you agree or disagree with our comments.
It was noted that the current Red Book is a daunting document, especially for clients, and that the reader might benefit from its structure being simplified to make it more accessible.