Local Knowledge in the Valuation of Residential Property: Establishing the Benefit of Spatial and Sectoral Familiarity Through an Elucidation of Current Practice
For decades local knowledge has been seen as an important requirement of property valuers in both residential and commercial markets, when undertaking valuations. Following criticisms of valuation methods in the early 1990's local knowledge became a mandatory requirement of professional surveying organisations in the UK. Despite this prominence no formal definition exists as to the nature or content of local knowledge. Based on empirical research involving a valuation experiment, postal questionnaire and depth interviews with residential valuers in England and Wales, this thesis provides a broader understanding of local knowledge in respect of the open market valuation of residential property. The research critically examines the literature relating to both local knowledge and current valuation practice (the environment in which local knowledge is required). Consideration is also given to professional knowledge and learning from a theoretical perspective. Based on the research undertaken, the thesis reinforces the need for practitioners to have knowledge of the area. The thesis highlights that valuers without local knowledge are more likely to produce inaccurate valuations, and may be drawn into errors in the selection of evidence. At the same time they will take longer to produce a valuation. However, different degrees of familiarity exist, which also impacts on the valuation process. A definition of local knowledge is provided, as are the factors which underpin this knowledge in terms of the inspection, selection of evidence and appraisal. The thesis also demonstrates how knowledge generally remains within the local milieu and the barriers to the transportability of valuation knowledge are discussed. Given the willingness of valuers to value in unfamiliar areas, the thesis concludes that a mandatory licensing system should be introduced to remove the problems associated with valuing in unfamiliar areas.
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