Following several years of Brexit uncertainty and as we are confronting COVID regional lockdowns, valuers are faced with a regular challenge when asked by clients “how will COVID-19 affect the value of my surgery”? Any answer is fraught with problems.
The property market in action is the only true indicator of value, and valuers depend on transactional evidence to provide certainty to their opinion of what an asset is worth. Naturally, there is always a delay in such information being available, which often invites accusations of low valuations in a rising market and the opposite when markets crash. Nevertheless the skill of a valuer is to analyse available information and adjust to provide an indication of what the market might be doing at the agreed valuation date, which can be now or at some point in the past.
The RICS Valuation Global Standards 2020, the so-called Red Book, carefully defines Market Value as, among other things, requiring a willing buyer, a willing seller, and the property being properly marketed. It also expects valuers to look at the property being valued externally and internally. With the recent constraints, satisfactory evidence-based valuations have been difficult, and access to premises close to impossible.
This has been a particular problem for the primary care sector for fairly obvious reasons, as any practice contemplating for example, partnership changes or a property extension, will have put any plans on hold to deal with more urgent priorities.
However, there is light at the end of the tunnel and an experienced valuer will be able to provide solutions to these challenges. The RICS has helped by allowing limited-inspection valuations as long as the valuer otherwise has enough information. Their ‘material uncertainty’ clause – inserted into many valuation reports – signified volatility in markets and a lack of reliable evidence – but this is no longer required for the primary care sector which is buoyant, and interest is returning fast. It might just be time to dust off those plans.
Many economists consider that after a sharp fall, the economy will recover early next year to pre-COVID levels. The primary healthcare sector remains a good investment for the long term, although the most flexible premises will prove to be the most popular, from where practices can offer the greatest range of services.
Before long, we might look back and know all the answers but for the time being our clients depend on accurate and informative advice from our team of experienced valuers.
If you would like further information or wish to book a valuation of your surgery, please contact our Healthcare team on 020 7907 3727 or email to firstname.lastname@example.org.