Pub Companies - Business and Enterprise Committee Contents

Memorandum submitted by the Royal Institute of Chartered Surveyors

  The Royal Institution of Chartered Surveyors (RICS) would like to comment on a specific area which relates to the Committee's inquiry. While it is inappropriate for RICS to comment on the terms of inquiry which refer to competition within the industry, we recognise that responders may make reference to guidance on the valuation of licensed property when commenting on the details of the codes of practice, and it may be helpful for you to have advice on this.

  By way of background, the RICS is the world's leading professional body on all aspects of land, property and construction and associated environmental issues. As an independent and chartered organisation, it regulates and maintains the professional standards of 86,000 chartered members (FRICS and MRICS), many of whom are practicing land and property valuers. RICS represents, regulates and promotes the work of these property professionals throughout 146 countries and is governed by a Royal Charter approved by Parliament which requires it to act in the public interest.

  In 2004 RICS submitted comments to the Trade and Industry Committee's inquiry into pubcos highlighting the professional requirements demanded of a valuer of public houses. Although the questions put in your consultation do not directly impact on the method of valuation of licensed property, we hope the following points will be helpful to you:

    —  All members of RICS providing valuations are required to comply with the RICS Valuation Standards. More specifically those Standards provide that the valuer must have knowledge of the particular market within which the property normally trades and the skills and understanding necessary to undertake the valuation competently.

    —  Within these Standards, RICS has provided guidance on the valuation of what is called "trade-related property", a term that includes pubs as well as other trades such as hotels, and petrol filling stations. For your information a copy of that guidance (GN 1 Trade related property valuations (not printed)) is attached to this letter.

    —  In addition RICS has also published a Valuation Information Paper entitled The capital and rental valuation of restaurants, bars, public houses and nightclubs in England and Wales. A copy of that paper is also attached to this letter (not printed here).

    —  Both documents are revised from time to time including some revisions made since 2004 when the previous enquiry took place.

  Should any issues arise on your consideration of the responses that require clarification of the guidance RICS would be pleased to assist you.

29 September 2008

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