Valuation - Uncertain World, Uncertain Prices

The current world economic climate is uncertain. The credit crunch has lead to a stagnation of market places, including the property investment market, and market players are all ìwaiting to see what will happenî. In this market, more than any other, the process of property valuation is fraught with uncertainty; there are few, if any, market transactions to act as comparables; the interpretation of market sentiment is difficult and the underlying economic indicators are acting counter-intuitively. In a market where investors are choosing not to purchase investments because of uncertainty, it would be ingenuous to pretend that uncertainty doesnít apply to valuations. This paper looks at the UK market and the continuing debate about the reporting of uncertainty in valuations. The booming investment market of the last few years has shielded the profession from the need to consider fully the impact of uncertainty. This paper argues that we need to do so now or risk a repeat of the problems that occurred at the end of the 1980s when valuers were found to be complacent in the way that they reported valuation figures.