Practice Briefing Valuations for secured lending: the problem of restricted marketing periods

Abstract

Purpose

The aim of this practice briefing is to provide clarity on property valuations provided for secured lending. The principal basis of valuation is market value but there is confusion on when and where it is appropriate or inappropriate to provide a valuation with an assumption of a restricted marketing period, sometimes referred to as a “forced sale”. This practice briefing examines the nature of the problem and steps which a valuer can take to provide advice which is consistent with the valuation standards.

Design/methodology/approach

This practice briefing is an overview of the role of valuation standards when providing valuations for secured lending and specifically what to do when asked for a value with an assumed restricted marketing period.

Findings

This briefing is a review of valuation standards and practice.

Practical implications

The role of the practising valuer, when providing valuations for secured lending, is to provide a valuation to aid and underpin the lender in assessing the risk attached to the loan. This briefing considers the provision of valuations in practice.

Originality/value

This provides guidance on how to undertake valuations for secured lending.

Citation

Thorne, C. (2023), "Practice Briefing Valuations for secured lending: the problem of restricted marketing periods", Journal of Property Investment & Finance, Vol. 41 No. 3, pp. 333-340. https://doi.org/10.1108/JPIF-02-2023-0008