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There will always be a degree of uncertainty in any valuation, but it should be incumbent upon the valuer to report “abnormal uncertainty”. This arises when some particular condition of the market or the property leads to the valuer being unable to value with the confidence of accuracy which might normally be expected. Abnormal uncertainty now features in the RICS Appraisal and Valuation Manual and later in this paper we consider how the valuer might identify and measure the degree of abnormal uncertainty. But this paper is predominantly concerned with “normal uncertainty”, which hereafter we will term only as “uncertainty”. The thesis of this paper is that uncertainty is a real and universal phenomenon in valuation. The sources of uncertainty are rational and can be identified. They can be described in a practical manner, and, above all, the process of identification and description will greatly assist many clients, and will improve the content and the credibility of the valuer’s work. Common professional standards and methods should be developed for measuring and expressing valuation uncertainty (Recommendation 34, Mallinson Report, RICS, 1994).

Looks at the philosophy of valuation, explaining the distinction between “worth” and “price”. Attempts to explain traditional techniques of assessing price. Looks at the development of discounted cash flow and its applications in valuations and calculations of worth. Concludes that there must be more openness with clients about valuation risks and issues so that they can make informed judgements.

The recent coronavirus pandemic created uncertainty across most markets. This has resulted in many valuations being reported with caveats warning that they are uncertain. However, many valuers and their clients remain unclear as to what these warnings are supposed to convey and why they are required by many valuation standards, including the International Valuation Standards. The purpose of this paper is to explain how recognition of the need for uncertainty disclosures has developed over the past 25 years and how such disclosures can enhance overall trust in valuation.

The author has been involved in the development of the guidance issued by both the International Valuation Standards Council and Royal Institution of Chartered Surveyors, which included extensive consultation with financial regulators and valuation users alike. He has also examined the wider economic theories of risk and uncertainty and how these need to be clearly distinguished in valuations.

This paper identifies the situations under which valuation uncertainty can occur, and steps that a valuer can follow to determine whether it is sufficiently material to require an appropriate caveat to be issued alongside the valuation. It also examines the merits of different ways in which material uncertainty can be disclosed.

The paper should provide valuers with a better understanding of the reason why uncertainty disclosures are required and the circumstances in which they are required. It also provides principles to help them formulate disclosures that are appropriate in different circumstances.

This is an abridged version of a Valuers' Briefing “Valuation Uncertainty – Reporting the unknowable” by the author and published as either an eBook or paperback available from Amazon.

This article profiles CornerHouse, an organisation that has played a key role in facilitating the emergence and development of a large number of mental health services and self‐help groups in West Surrey. CornerHouse takes a community development approach, facilitating and empowering small local mental health groups, and building an active and sustainable local mental health community.

Following the publication of the Mallinson Report in March 1994, the Royal Institution of Chartered Surveyors undertook a survey of Valuation Practice in the UK in accordance with Recommendation 25 of the report. In January 1995 questionnaires were sent out to a cross‐section of practitioners in the market. The responses represented a wide range of experience, geographical location and type of work. The majority of respondents spent more than 50 per cent of their time undertaking valuations. The questionnaire distinguished between valuations undertaken for pricing (asset valuations, sale/purchase advice, CPO, etc.) and calculations of worth, where the role of the valuer was to analyse the investment for a specific purpose for a specific client. Respondents were asked to indicate whether they tended to adopt a “traditional” model or a “DCF” model for the valuation of a number of different types of investment. These were rack‐rented freeholds, reversionary freeholds, over‐rented property, short leaseholds and long leaseholds. In the replies there was a consensus opinion that, when undertaking calculations of worth, the DCF method should be used as the principal method but tempered with the use of traditional techniques alongside. Conversely, when pricing property the traditional method was considered to be the appropriate tool, although many respondents said that they would also use DCF techniques on the more “unusual” interests such as over‐rented. With regard to the actual method adopted, most valuers using traditional methods favoured the use of an all‐risk/equivalent yield approach using layered income flows. Those using DCF preferred the short‐cut approach with a reversion to a sale price after the first change of income. Clearly suggests that there is a greater understanding of explicit techniques than anecdotal evidence had previously suggested.

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property Management Volumes 8‐17; Structural Survey Volumes 8‐17.

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐17; Journal of Property Investment & Finance Volumes 8‐17; Property Management Volumes 8‐17; Structural Survey Volumes 8‐17.

Index by subjects, compiled by K.G.B. Bakewell covering the following journals: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.

Compiled by K.G.B. Bakewell covering the following journals published by MCB University Press: Facilities Volumes 8‐18; Journal of Property Investment & Finance Volumes 8‐18; Property Management Volumes 8‐18; Structural Survey Volumes 8‐18.