The RICS Standards and Regulation Board (the SRB) has “unequivocally accepted” all 13 recommendations in the “Independent Review of Real Estate Investment Valuations” it commissioned in September 2020. The independent review was led by Peter J. Pereira Gray and supported by an Expert Advisory Group.

In part, RICS was anticipating the Financial Reporting Council’s (FRC) request for the separation of audit from advisory services by 2024. And, at the time, RICS was also attracting its own media scrutiny for concerns about independence.

In their 13 January 2022 response to the recommendations, RICS’ restates its initial aim in requisitioning the review, which was to ensure that these valuation services “remain relevant and trusted in this important and sensitive professional field” following growing concerns then over the performance and the independence of valuers—and RICS oversight.

Highlights of the recommendations include:

1. The need for standardised governance arrangements for commissioning and receiving valuation reports for high-risk and “regulated” valuations;
2. The requirement that real property valuers should ensure that the consistent separation of valuation from advisory activities within firms;
3. A requirement for a new valuation compliance officer role specifically to cover valuation process and conduct;
4. The creation of a new independently led valuation regulatory quality assurance panel, under the jurisdiction of the SRB;
5. Additions to the RICS Red Book to include further standards around the conduct and recording of valuation instructions and meetings between client and valuer; and
6. Recognition that the tangible property valuers should incorporate the use of discounted cash flow as the principal model applied in preparing property investment valuations.

SRB notes that the review did not find any “systemic issues that lead to questions regarding the overall credibility or accuracy of valuations.”