Although the Charities Act 2011 does not require a valuation for acquisitions, many charities choose to seek independent advice before purchasing property. This helps trustees demonstrate that they are acting prudently and that the charity is paying a fair price for the asset. These valuations are carried out in accordance with the RICS Valuation – Global Standards.
Vickery Holman regularly undertakes Charities Act valuations for both acquisitions and disposals, providing trustees with clear, evidence-based advice to support informed decision making.
We were instructed to provide a Charities Act valuation of a residential flat in Plymouth that a charity was considering purchasing for one of their retired officers. The property had been marketed by a local agent, and an offer had already been agreed. The trustees required an opinion of Market Value to determine whether the agreed price represented the Market Value.
We inspected the flat and measured it on both a Gross Internal Area (GIA) and IPMS 3B basis. As our comparable evidence was measured on a GIA basis, this formed the main basis of our analysis to ensure a like-for-like comparison. We analysed recent sales of similar flats in Plymouth by taking into account differences in size, condition, specification and location.
We also reviewed the property’s recent marketing history to understand activity and demand levels. The flat had been advertised for an extended period and had several price reductions during that time. Following a conversation with the selling agent, we were advised that despite being openly marketed, interest was limited, and there were only a small number of viewings that had taken place. This provided useful context when assessing how the agreed purchase price aligned with current market conditions in the local residential market.
After analysing the available comparable evidence, and taking into account the marketing history, we determined our opinion of Market Value and provided a clear and comprehensive methodology to ensure the client understood our reasoning.
We provided the charity with a clear and well-supported Red Book valuation report prepared in accordance with the RICS Valuation – Global Standards. The trustees used our advice to assess the agreed purchase price and to demonstrate that they had taken appropriate steps to act in the best interests of the charity before proceeding with the acquisition.
