PROPERTY
PROPERTY
Are valuers providing valuations on a foundation of shifting sands ?
Matthew Clarke – partner with Sanderson Weatherall .
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Sanderson Weatherall partner Matthew Clarke considers the implications of undertaking valuations amid a global pandemic and post Covid-19 …
learly Covid-19 has presented challenges to those involved in the property market and particularly to those providing valuation advice , with some of those challenges more obvious than others .
Indeed , we consider that Covid-19 will and already has impacted on different sectors in a variety of distinctive ways .
There is no doubt that we have been operating in a period of increased uncertainty since March 2020 .
The ongoing government-imposed restrictions , both regional and national ( aka lockdowns one and two ) have created a unique set of circumstances in which property professionals are still expected to make a judgement regarding the value of an asset .
At Sanderson Weatherall , like many other firms , we started accompanying our reports with a declaration of material uncertainty at the onset of the pandemic .
The biggest driver for lenders , especially in the property market , is certainty and uncertainty .
A lender wants to confidently predict what will happen and will use property valuers to help minimise risk .
Property professionals should , as always , be alert to micro-and macroeconomic influences on value . A property valuation requires local knowledge of the individual market sector where that property is located , as well as an acknowledgement that such markets will be influenced by national , regional and local economic activity . What are the biggest external influences on property valuations right now ? There are a number of factors currently in play which are influencing levels of certainty , or , dependent upon your outlook , uncertainty , right now . These are : Covid-19 The pandemic caused great uncertainty . It ’ s unfamiliar territory and a rapidly changing situation . That said , the financial markets have mostly recovered after the initial downturn . USA A highly anticipated election , subsequent claims of voter fraud and concerns over political unrest brings about instability which impacts on the UK , due to our economy being intrinsically linked to the USA . Brexit Brexit is still impacting the economy and especially exchange rates , though this is more about uncertainty for next year rather than the deal or no-deal outcome .
Unemployment Job losses have already materialised this year as restrictions impacted on all sectors , and especially forced many retail and leisure operators to close . The government has been heavily supporting job retention so it ’ s likely we won ’ t feel the full extent of unemployment until the furlough scheme ends , which is now scheduled to happen in March 2021 . Debt We know that this will become a problem post Covid-19 . To what extent and for how long remains unclear .
It is impossible for anyone to determine the outcome of how these factors will play out and the impact they will have on property values .
The job for valuers at the moment is to weigh up all the external influences , make a judgement with the facts they have to hand , and advise lenders accordingly .
At Sanderson Weatherall it ’ s encouraging that we ’ ve remained busy throughout , actively dealing with a wide range of lenders whose confidence in the market provides a positive outlook moving forward .
Matthew Clarke Partner , Sanderson Weatherall Tel : 01642 426921 E : matthew . clarke @ sw . co . uk
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