Guide to RICS Red Book valuations for education estates 

From time to time, schools and academies require a formal valuation of their education estates and assets. You may want an up-to-date valuation for an insurance policy, as part of a funding application, for loan security, lease renewal or disposal purposes, or simply to reflect the value of your school in your accounts. 

Whatever the reason, the process of valuing school assets and buildings can be complex. They often have a specific purpose or unique characteristics and can include old and listed buildings. There are also relatively few similar properties that come on the market. Given these challenges, you need a robust and comprehensive valuation you can rely on.

What is a RICS Red Book valuation?

A RICS Red Book valuation is a reliable and comprehensive property valuation that provides a formal opinion of value that is recognised universally. From inspection to reporting, Red Book valuations meet the highest valuation standards set by RICS and guarantee the qualifications of the valuer and the content included in the property valuation report. 

The Red Book is produced by the Royal Institution of Chartered Surveyors (RICS). It sets out the professional standards and principles that valuers must adhere to. There are two versions of the Red Book in the UK:

• RICS Valuation: Global Standards 2017, which sets out the standards valuers must follow
• RICS Valuation – Professional Standards UK (revised April 2015), which adapts the global standards to fit UK laws and regulations

They include rigorous criteria for a valuer’s ethical responsibilities, duty of care and qualifications. They also determine the most appropriate valuation method for different property types.  

Who can produce Red Book valuations? 

Red Book valuations can only be produced by professional surveyors who are Members of the Royal Institution of Chartered Surveyors (MRICS) and/or are part of the RICS Valuation Registration Scheme, more commonly known as a RICS Registered Valuer.

The valuer must also have specific training in each valuation type and only value assets within their particular area of expertise. Red Book valuations are relied upon by the instructing party. Therefore, RICS Registered Valuers must also hold sufficient professional indemnity insurance to cover the clients who act on their advice.  

Why should schools seek RICS Red Book valuations?

The valuation of education premises, whether it’s independent schools and nurseries or state-owned academies and colleges, is a niche and specialist area. As such, the accuracy of valuations relies on the valuers’ expertise and experience in the sector as well as their understanding of operational considerations, such as the trading accounts and the performance of the wider market.  

Red Book valuations are particularly relevant to independent schools. UK private schools have an excellent reputation internationally and are increasingly seen as attractive investments for overseas buyers. There has also been an uptick in the consolidation of school groups in recent years. In both instances, accurate valuations are vital in determining market value. 

Charitable trusts, whose schools typically run at a loss or a low margin, often have significant value in underutilised land and buildings. They are increasingly engaging in asset sales to provide a cash flow injection. In this case, RICS Red Book valuations from surveyors with specialist knowledge and experience in education estates enable school administrators to make informed decisions.

Valuation considerations

The factors that determine market value change depending on the asset in question. For example, are you valuing the whole school, underutilised property or the playing fields? The factors may include but are not limited to the following:

• Local characteristics such as the school’s location, the affluence of the area and the level of competition
• The quality of the asset, from its age and condition to the potential to expand and its tenure 
• Trading potential, including the school’s current performance and an analysis of its trading history
• Even a school’s ESG credentials can have a significant impact on value

Alternatively, depending on the asset, its vacant possession value could be the most important factor. Understanding what valuation method to use and the factors to consider makes RICS Red Book valuations vital for education estates.  

How can we help?

Valuations for education estates are complex, which is why you need to work with specialist RICS Registered Valuers with specific experience in schools, academies and colleges. Find out more about our education surveying and valuation services and get in touch for a free consultation.