Peter Wyatt

Using a geographical information system for property valuation

Property valuers in England and Wales face a difficult task; they must collect and assimilate data from a variety of sources which differ widely with regard to quality, currency and coverage. This is because of legislative restrictions on access to public sector data sources and organizational constraints on access to property data within the private sector, such as confidentiality and commercial secrecy. Proposes a system for the dissemination of property data for valuation and other property‐related procedures, namely, a National Land Information Service (NLIS). Suggests that a NLIS should be developed using geographical information system technology. Describes a methodology which shows how a spatial analysis technique available on a GIS was used to examine the influence of accessibility on property value.

Rethinking urban capacity: identifying and appraising vacant buildings

Policies related to urban development and regeneration have prompted a need for greater levels of information concerning vacant land and property. A need is identified to create efficient use (and reuse) of existing real estate. Drawing on information primarily collected for property taxation, a methodology is presented to create comprehensive data sets relating to vacant non-domestic buildings to help identify the type, size and location of long-term vacant property. The case is made for this methodology to be extended and for improved access to comprehensive data to enable scarce real estate resources to be used in a more sustainable manner.

Variance in commercial property valuations for lending purposes: an empirical study

Investigates the extent and possible causes of variance in property investment valuations for commercial lending purposes within the UK. A literature review was undertaken and a questionnaire survey was circulated to individuals involved in the commercial property valuation process in order to gauge professional opinion. The survey revealed that the main cause of variance was found to be a result of the individual valuer’s “behavioural influences”. The survey also found that parties to a valuation instruction widely accept the margin of error principle, the legal manifestation of valuation variance, as a test of negligence.

Office sustainability: occupier perceptions and implementation of policy

Purpose – The purpose of this research was twofold. First, to investigate the views of occupiers in a typical UK city on the importance of various sustainability issues, their perceived impact of different sustainability drivers and willingness to pay. Second, the environmental and social performance of existing buildings in that city was examined.Design/methodology/approach – The research focuses on buildings of 10,000 feet2 or more that have been constructed in the Bristol city‐region in the UK over the past 50 years. The buildings in the sample are located in the city centre and in out‐of‐town business parks. A questionnaire survey investigated the views of occupiers and follow‐up interviews looked more closely at the sustainability performance of the existing stock.Findings – The findings indicate that, as far as occupiers are concerned, the strongest drivers are consumer demand and staff demand. Green features of a building appear to rank low in the overall building selection preference structure and...

Measuring the financial performance of green buildings in the UK commercial property market: Addressing the data issues

Purpose – Given the centrality of data and information to the evaluation and operation of policies to reduce carbon emissions, the purpose of this paper is to investigate potential sources of data within in the UK on the commercial building stock in terms of its physical characteristics, financial performance, energy consumption and environmental performance. The research aimed to increase understanding of the potential sources of data on property attributes, financial performance and energy use or environmental performance, with a particular emphasis on evaluating their strengths and weaknesses in terms of scope, quality, availability and practicability.Design/methodology/approach – This is an explorative, qualitative study that uses semi‐structured interviews conducted with 11 different data holding organisations.Findings – Whilst public sector organisations have the potential to provide the data required for large samples, there are major barriers to obtaining and linking the different databases. Data ...

Development appraisal in practice: some evidence from the planning system

Due to the requirement to demonstrate financial feasibility of policy proposals and scheme-specific planning obligations, development viability and development appraisal have become core themes in the English planning system. The objective of this paper is to evaluate the application of development appraisal in practice. The paper reviews the literature and the models available to assess the viability of development and analyses a sample 19 development viability appraisals to identify practice. The paper concludes that the practice of development appraisal deviates significantly from the tenets of capital budgeting theory. In particular, in addition to a propensity to oversimplify the timing of income and expenditure, the way in which debt, developer’s return and value and cost change are handled in practice illustrates a major gap between mainstream capital budgeting theory and development appraisal in practice.

Fit for Planning? An Evaluation of the Application of Development Viability Appraisal Models in the UK Planning System

In the context of its increasing use in policy formulation regarding planning obligations, we discuss a number of problematic issues in the application of development viability appraisal modelling in the UK planning system. The increased use of planning obligations to provide affordable housing and to mitigate the effects of negative externalities generated by new development is discussed. The methodology of development viability appraisal modelling is also outlined. Three types of problem are identified. First, there is a set of issues related to intrinsic model and input uncertainty that are problematic in the application of development viability modelling whatever the context. Second, there are problems that are specific to modelling for estimating or justifying planning obligations. In particular, a crucial input that remains contested and uncertain is threshold land value. Clear guidance can resolve this issue. Finally, and more fundamentally, due to spatial and temporal variation in the capacity of development sites to generate financial surpluses for planning obligations, policies that set rules or fix targets on planning obligations without regard to prevailing site and/or market conditions can reduce the supply of development and/or be prone to rapid obsolescence.

Governing calculative practices: An investigation of development viability modelling in the English planning system

Over the last decade the English planning system has placed greater emphasis on the financial viability of development. ‘Calculative’ practices have been used to quantify and capture land value uplifts. Development viability appraisal (DVA) has become a key part of the evidence base used in planning decision-making and informs both ‘site-specific’ negotiations about the level of land value capture for individual schemes and ‘area-wide’ planning policy formation. This paper investigates how implementation of DVA is governed in planning policy formation. It is argued that the increased use of DVA raises important questions about how planning decisions are made and operationalised, not least because DVA is often poorly understood by some key stakeholders. The paper uses the concept of governance to thematically analyse semi-structured interviews conducted with the producers of DVAs and considers key procedural issues including (in)consistencies in appraisal practices, levels of stakeholder consultation and the potential for client and producer bias. Whilst stakeholder consultation is shown to be integral to the appraisal process in order to improve the quality of the appraisals and to legitimise the outputs, participation is restricted to industry experts and excludes some interest groups, including local communities. It is concluded that, largely because of its recent adoption and knowledge asymmetries between local planning authorities and appraisers, DVA is a weakly governed process characterised by emerging and contested guidance and is therefore ‘up for grabs’.

Replacement cost and market value

Purpose - Several problems arise from the current valuation standards and guidance in relation to the replacement cost method and they can be classified as definitional and methodological. Definitional problems include confusion over the precise meaning of the terms cost, price and value and clarification of the economic concepts of substitution and “highest and best use” in the cases of market-based and replacement cost methods. Methodological problems include the difficulty in finding market-derived inputs, particularly when estimating depreciation, and the need to make end adjustments. These matters raise the question as to whether a replacement cost method is compatible with a market basis of value. This paper aims to address this issue. Design/methodology/approach - The paper reviews academic literature and professional practice guidance in relation to the replacement cost method of valuation and the market value basis of valuation. Findings - Defining replacement cost as a method of estimating market value rather than a separate basis of value blurs the distinction between cost and value. This paper argues that market value assumptions do not hold in the case of the replacement cost method. Originality/value - The paper seeks to stimulate debate on the current professional guidance for the use of the replacement cost method of valuation.

An investigation of the nature of the valuation service offered to business occupiers

Publishes some of the findings of a research project that examined whether valuers and valuations have a role in the provision of more strategic property advice to business occupiers. The research consisted of a postal questionnaire survey of over 250 businesses that examined the role of property and the use of valuations in strategic business decisions. The survey was supported by the findings from 18 structured interviews and an analysis of over 70 sets of company accounts. The results revealed that, despite valuers becoming increasingly involved in measuring corporate efficiency and valuations being used for this purpose, business occupiers do not recognise valuers in a strategic role. Instead, many firms see valuers as providing a single valuation service, the estimation of market value for purchase/sale decisions and corporate disclosure. The research suggests that valuations do have a role to play in the provision of more strategic business advice but the valuer will need to understand the client’s wider business needs and how property plays a part in the client’s business. Valuers need to convince clients that they are not overly technical in their outlook, have broad business skills that include strategic thinking and an awareness of business issues.