From 1st May 2024, the RICS introduced updated guidance on valuer rotation for regulated purpose valuations – a move aimed at reinforcing independence and objectivity in long-term engagements.
What is changing?
Under the new UK VPS 3 rules:
- A valuation firm must not value the same asset for the same regulated purpose for more than 10 consecutive years, unless there has been a break of at least three years.
- A responsible valuer (named individual) must be rotated after 5 years.
- No single engagement can exceed 5 years in duration.
These changes are subject to a transition period running until 30th April 2026, giving firms and clients time to assess their current arrangements.
Why does it matter?
The policy is designed to prevent overfamiliarity between valuers and assets or clients, ensuring valuations remain impartial and robust – particularly for financial reporting, mergers, and investment schemes.
However, not all valuations are affected. The rules apply only to:
- Assets owned or part-owned by large companies (as defined in the Companies Act 2006), or
- Entities with transferable securities traded on regulated markets, or
- Valuations for regulated investment purposes (e.g. prospectuses, takeovers, collective investment schemes).
What should you do?
If you’re unsure whether your valuation engagement falls within scope, it’s essential to seek advice. For example, trusts, estates, and charities may not appear to be large companies at face value – but could meet the criteria based on turnover, assets, or employee count.
At Daniel Watney Partnership, we’ve been in active dialogue with the RICS to clarify how these rules apply in practice. In one recent case, we confirmed that our engagement was exempt from the rotation policy based on the client’s structure and the nature of the valuation.
If your organisation relies on long-term valuation engagements for regulated purposes, now is the time to review your position. The implications of these changes could affect your reporting obligations, governance processes, and choice of valuation partner. If you think this may apply to you, we recommend seeking professional advice to ensure compliance and continuity.
