Revaluation 2010Revaluation 2010The view from the other sideThe view from the other side

AKA the Private Sector Valuer!AKA the Private Sector Valuer!

David Bingham BSc(Est Man) FRICS David Bingham BSc(Est Man) FRICS IRRVIRRV

Who are we - what do we do?Who are we - what do we do?

Usually members of RICS or IRRVUsually members of RICS or IRRV Advise the payers of Non Domestic RatesAdvise the payers of Non Domestic Rates What then?What then? Usually tell them that they are paying too much!Usually tell them that they are paying too much! But seriouslyBut seriously We use our skill and knowledge to decide We use our skill and knowledge to decide

whether it is the ratepayers interest to lodge an whether it is the ratepayers interest to lodge an appealappeal

Do most ratepayers know what their best interest Do most ratepayers know what their best interest is?is?

Revaluation 2010Revaluation 2010The Impacts and Implications The Impacts and Implications

Impacts Nationally - Winners and losers:Impacts Nationally - Winners and losers: Winners – paying lessWinners – paying less

Most industrial and distributionMost industrial and distribution Older officesOlder offices Secondary and tertiary retails Secondary and tertiary retails

Losers – paying moreLosers – paying more West End and City of London officesWest End and City of London offices FoodstoresFoodstores Many Leisure propertiesMany Leisure properties Properties valued on Contractors test basisProperties valued on Contractors test basis

Impact on the East MidlandsImpact on the East Midlands Generally RV increase lower than rest of EnglandGenerally RV increase lower than rest of England

So – less work for the private sector valuer?So – less work for the private sector valuer?

Revaluation 2010Revaluation 2010

The need to appealThe need to appeal

Economic background and the financial marketsEconomic background and the financial markets

Three things to consider:Three things to consider:

Changes between the AVD and Compilation dateChanges between the AVD and Compilation date

The number of “no change” RV’sThe number of “no change” RV’s

Contractors Test against Rental Value RV’sContractors Test against Rental Value RV’stoto

Revaluation 2010Revaluation 2010What is a valuer/adviser to do?What is a valuer/adviser to do?

Things to consider -1Things to consider -1

Changes between AVD and compilation dateChanges between AVD and compilation date

Compiled List valuation Material day is ………..?Compiled List valuation Material day is ………..?

All Physical changes between 1All Physical changes between 1stst April 2008 and 1 April 2008 and 1stst April 2010 have to be taken April 2010 have to be taken into account – as though they had been in place at AVD (LGFA Sch6 s2(7))into account – as though they had been in place at AVD (LGFA Sch6 s2(7))

This means that both newly completed space and vacant property at 1This means that both newly completed space and vacant property at 1stst April April 2010 have to be taken into account – effect on the market e.g. empty shops2010 have to be taken into account – effect on the market e.g. empty shops

This will affect all property classes This will affect all property classes

Revaluation 2010Revaluation 2010

What is a valuer/adviser to do?What is a valuer/adviser to do?

Things to consider -2Things to consider -2

““No change” RV’s – some stats!No change” RV’s – some stats!

There are 2899 entries in the 2010 Draft rating List which have the There are 2899 entries in the 2010 Draft rating List which have the postal town “Solihull”postal town “Solihull”

They cover all property classesThey cover all property classes Of these 490 have a 2010 List RV that is exactly the same as the 2005 Of these 490 have a 2010 List RV that is exactly the same as the 2005

list RVlist RV This is 17% of all properties – typical of other areasThis is 17% of all properties – typical of other areas This suggests that for 17% of all properties their rental value is exactly This suggests that for 17% of all properties their rental value is exactly

the same at 1the same at 1stst April 2008 as it was at 1 April 2008 as it was at 1stst April 2003 April 2003 Can this really be the case?Can this really be the case? Try telling a landlord’s surveyor this fact at a rent review negotiation!Try telling a landlord’s surveyor this fact at a rent review negotiation!

Revaluation 2010Revaluation 2010

What is a valuer/adviser to do?What is a valuer/adviser to do?

Things to consider – 3Things to consider – 3

Contractors test valuations (e.g. LA Leisure centres)Contractors test valuations (e.g. LA Leisure centres) Rental value valuations have increased on average by 16 – 17% over all Rental value valuations have increased on average by 16 – 17% over all

classesclasses Most industrials lessMost industrials less Costs for contractors test valuations have increased (apparently) by Costs for contractors test valuations have increased (apparently) by

40%+40%+ Decapitalisation rate remains the sameDecapitalisation rate remains the same Even with higher age and obsolescence allowances RV’s Of Contractors Even with higher age and obsolescence allowances RV’s Of Contractors

Test properties have gone by considerable more Test properties have gone by considerable more Will this stack up? Lots of lovely appeals and hopefully juicy fees!Will this stack up? Lots of lovely appeals and hopefully juicy fees!

Revaluation 2010Revaluation 2010

Source of instructionsSource of instructions

Major national Valuation Surveyor practicesMajor national Valuation Surveyor practices

Established clients retail and industrialEstablished clients retail and industrial

Local Valuation Surveyor practicesLocal Valuation Surveyor practices

Hard hit local retailersHard hit local retailers Occupiers of Contractors Test hereditamentsOccupiers of Contractors Test hereditaments Occupiers of SBR/other relief threshold hereditamentsOccupiers of SBR/other relief threshold hereditaments Empty propertiesEmpty properties

Rating CowboysRating Cowboys Hopefully they will not get any!Hopefully they will not get any!

Revaluation 2010Revaluation 2010Rating Appeals – the mechanical bits

New proposal time limits – 2010 List

SI 659 – effective 1 October 2009 Only one proposal

2005 List proposals – new time limits

Must be made before 31 March 2010 MCC appeals arrangements changed from 2000 List MCC appeals must now be swerved by 31 march 2010 Alternatively persuade the VO to change the List or ask RA to send in a “report” VO should then act Other Circumstances Following LVT,VT or Lands Tribunal decision – no later than 30 September 2010

VO Changes to 2005 List Any time up to 31 March 2011 Right of Appeal still exists against changes

Revaluation 2010Revaluation 2010 Obstacles and hurdles!

Valuation Office Agency

Website – actually not too bad once the glitches are fully sorted Useful for comparables Not so handy for submitting repeat proposals Crashes rather too often Valuation breakdowns often denied by staff!

Paperwork – large amounts of paper still being generated Target dates – some “tokenism” and attention to statistical performance

Local Authorities Mostly very helpful! Local knowledge very useful – don’t use call centres/one stop shops please

Valuation Tribunal New Regulations from 1 October 2009 Not fully worked out yet – national Presidents “Practice Statements” awaited!

Transition and all other ills