Affordability, viability and clarity – the impact of valuation on supply of affordable housing

Viability is at the heart of the extent to which private developers can be expected to bridge the gap between demand for and supply of affordable housing. In April this year, in a postscript to his judgment in the case of Parkhurst Road Ltd v Secretary of State for Communities and Local Government and another [2018] EWHC 991 (Admin), Mr Justice Holgate said that “uncertainty on how viability assessment should properly be carried out” is leading to “a proliferation of litigation” and called on the Royal Institution of Chartered Surveyors (RICS) to revisit its 2012 Financial Viability in Planning Guidance. Since then, the revised National Planning Policy Framework (NPPF) has been published together with revised Planning Practice Guidance (PPG) on viability, but a review of the RICS guidance is still ongoing. On 5 October, the Deputy Mayor of London and the Executive Member for Housing & Development at Islington Council wrote a joint open letter to the President of the RICS regarding affordable housing and the 2012 RICS Financial Viability in Planning Guidance. Their letter asks RICS to revisit its guidance, as called for by Holgate J. Continue reading

How is IPMS measuring up?

Despite prevailing market practice indicating a preference by developers/landlords to continue to use the 6th edition (2007) of the RICS Code of Measuring Practice (CoMP), RICS will continue to ask its members to apply the International Property Measurement Standard (IPMS). Whilst our clients should be aware of RICS continued commitment to IPMS it remains to be seen whether this commitment results in a tangible impact on established market practice.

That said, on 1 May 2018, the second edition of RICS Property Measurement will come into effect, and one of the principal changes is the introduction of IPMS for residential buildings. The IPMS for office buildings has been mandatory for members since the first edition of the Property Measurement came into effect in 2015. However the second edition sets out 2 elements: Part 1 – the Professional Statement: property measurement – which applies to all properties and includes IPMS measurements for office buildings; and Part 2 – RICS IPMS Data Standard – which is designed to encapsulate the attributes and elements of an IPMS measurement aimed at providing consistency to software developers who provide measuring software.  Part 1 must be complied with by all RICS professionals involved with work that includes the measurement of buildings. Industrial and retail buildings can be measured under IPMS 1 which is a universal standard that applies to all building classes and measures the area of a building including external walls and compares closely to the gross internal area under the CoMP. IPMS 1 is also used for planning purposes and development appraisals.

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Commercial Service Charges – the RICS consults on proposed mandatory requirements

Commercial property practitioners and stakeholders have just under a week left to have their say on the draft text of the 4th edition of the RICS Code of Practice: Service Charges in Commercial Property (the “Code”), which is due to come into effect on 1 April 2018.  This professional statement will replace the 3rd edition of the Code, which is the RICS’s current best practice guidance.

In this blog post we look at what the proposed changes are and how landlords will be affected.

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Introduction of the new International Property Measurement Standard

Author: Alice Dockar, Partner, Real Estate, London

In England and Wales developers and corporate occupiers are used to measuring floor areas from practical completion of a building by reference to the "net internal area" as defined in the RICS Code of Measuring Practice, the latest of which is the Sixth Edition of that Code.  However, 2016 brings the new RICS Professional Statement for Property Measurement on offices as mandatory as part of the implementation of the new International Property Measurement Standard (IPMS). Instead of terminology that we are all familiar with such as "gross external area", "gross internal area" and "net internal area" (GEA, GIA and NIA) there is new terminology to be known as IPMS1, IPMS2 and IPMS3.  One of the fundamental changes is the introduction of measuring to the "internal dominant face" such that building floor areas will change, and consequently there will be changes to the measurement reports that are produced by the measurement surveyors in the market.

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