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This paper draws on the work of Miles, Harker and Mason to illustrate how inconsistent the valuation profession is about the fundamental requirement to present information in a consistent and acceptable manner to its clients. Investors in other markets are not confronted with the same lack of consistency, so, unless the current random approach is corrected, the credibility of the profession will come in for further criticism.

The purpose of this paper is to review the historic evolution of dual rate valuation practice in the UK from the nineteenth century to the present time.

The paper is based on a review of published books, articles and letters dating from 1852.

The study establishes the fact that single rate was the only method in use in the nineteenth century and notes the overlap of two methodologies and beliefs in the first half of the twentieth century. It confirms that by the late 1930s dual rate had replaced single rate and an “establishment opinion” on the essential need to value leaseholds dual rate on the basis of a set of commandments had emerged without any apparent disagreement. This position, with some debated refinements for the effect of tax and treatment of variable profit rents, is shown to continue through the twentieth century and is reaffirmed in standard textbook teaching at the start of the twenty‐first century. The review touches on the criticisms noted by academics in the latter part of twentieth century. It identifies as a key issue the continuing persistent misconception amongst UK valuers that there is a reinvestment assumption in the present value of £1 per annum.

Dual rate principles are shown in the paper to be untenable and the profession is advised to remove the method from future training of valuers and to cease to make any use of the method in the valuation of leasehold investments.

This paper briefly examines the nature of residential valuations, questions the professional vigour with which such instructions are handled and raises a number of fundamental points that residential valuers need to be able to answer in the near future, if not to‐day. It concludes with the view that a statistical approach may be necessary in the future but will only be acceptable if based on accurate base data.

A dispassionate view of the degree to which North American appraisal practice exceeds UK valuation practice in quality (if indeed it does) is hardly to be expected in a journal devoted to the latter of these two combatants. Such a venture is not attempted in this paper.

There have always been situations where tenants, for one reason or another, have paid rents in excess of open market rental value. The position today, due to the downturn in the letting market, is that many more tenants are now in this position. This poses a problem for valuation surveyors when asked to express an opinion on value for sale, negative or reverse premiums, and on value for asset valuation purposes where negative values must be specified. A further point for consideration is the issue raised by the Accounting Standards Board of charging future rent obligations as a single lump sum to profit and loss accounts. Explores these challenges in relation to leasehold valuation methodology and suggests approaches.

This paper considers the development of national and international standards for valuers. Examines in outline the variations in market practice arising from variations in law, culture and custom while noting the general acceptance internationally of the underlying meaning of “market value”.

Buy/sell decisions in the property market, as in most markets, are based on individual or professional opinions that the exchange price is below or above the individual’s opinion of worth. This article considers the RICS definition of worth and explores other definitions and meanings in the property investment market. It reviews the current provision for DCF in standards or information papers and concludes that, while the International Valuation Standard Committee’s definition of market value is now recognised on a world basis, confusion over the meaning of “worth” and the use of DCF will continue if similar international standards are not agreed.

A preceding paper by Baum examined the valuation of reversionary freehold interests, distinguishing between conventional and modern approaches. This paper applies the same approach to the valuation of leaseholds, and falls into two parts. Part 1 examines conventional leasehold valuations and the criticisms that may be made, concluding that both dual rate and single rate conventional valuations should be abandoned except in limited circumstances. Part 2 identifies three alternative modern approaches — real value, rational model and DCF — and compares their use in three general variations of leasehold valuation. The results are compared, and recommendations for their use are made. Finally an overview of the application of modern approaches to investment property valuation is presented.

Reconsiders some of the market issues surrounding the over‐rented property valuation problem and extends the discussion to the valuation of self‐financing properties where the market yield exceeds that of long‐dated stocks. Emphasizes the problem of using long‐term implied growth rates in market conditions where short‐term conditions of no growth or indeed continuing decline may have significant impact on value. Concludes with the suggestion that those who support a DCF approach to valuation have still to convince the market of their case. There is also a need for further study in all areas associated with implicit valuation and explicit DCF valuations in particular in relation to the determination of all risk yields, determination of target rates, assessment of market rental value and the degree to which the market can accept valuations based on the judgement, intuition, or experience of a valuer in times of minimal comparable market evidence.