In normal market conditions and in the valuation method considered and defined for the purpose of this Help to Buy valuation, namely the Market Approach (comparison), comparable evidence is drawn from market transactions. This is an integral requirement for not only our professional services but also a requirement for Target and your Help to Buy valuation.
Due to the onset of COVID-19 and subsequent restrictions, which include restrictions in the housing market, we do not have the ability to predict what will happen and how COVID-19 will affect values going forward. On this basis you need to consider whether this is the right time for you to request a valuation. It may be prudent to consider delaying the valuation until there is more definitive evidence of COVID-19’s effect on the residential market and whether there is any significant effect from Brexit. It is not possible for us to predict a future market.
VPGA 10 – 2.4, 3.2, 3.3
2.4 – “Markets can be disrupted by relatively unique factors. Such disruption can arise due to unforeseen financial, macro-economic, legal, political or even natural events. If the valuation date coincides with, or is in the immediate aftermath of, such an event there may be a reduced level of certainty that can be attached to a valuation, due to inconsistent, or an absence of, empirical data, or to the valuer being faced with an unprecedented set of circumstances on which to base a judgement. In such situations demands placed on valuers can be unusually testing. Although valuers should be able to make a judgement, it is important that the context of that judgement is expressed clearly.
3.2 – “Where material uncertainty exists, it will normally be expressed in qualitative terms, indicating the valuers confidence in the valuation opinion offered by use of a suitable form of words. Indeed, this may be the only realistic way in which to do so, given that the very conditions that create valuation uncertainty will frequently mean there is an absence of empirical data to inform or support a quantitative estimate”.
3.3 – “In most cases it is either inappropriate or impractical to reflect material uncertainty in the valuation figure quantitatively, and indeed, any attempt to do so might seem contradictory”.
In summary we are providing you with a valuation within an ever evolving market place. We have no evidence to determine how COVID-19, or indeed Brexit, will affect the market and we may not have this evidence for some time. The introduction of incentives by Central Government may also have a short term impact on the market and values but these incentives may be withdrawn or amended at any time. The process of valuation is therefore more subjective and responsive then would normally be the case. This is why we are required to report the valuation with “Material Uncertainty”.