Online Property Valuation vs RICS Certified Valuation – What are the differences?

If you own a property in London, you may occasionally wonder how much it is worth. Perhaps you are thinking about selling, reviewing your investment, or simply keeping an eye on the market.

Getting a rough idea is fairly easy. Online tools can give you an estimate in minutes, without the need to arrange a visit. But if you need a figure for a mortgage application, an ownership transfer or another important financial decision, a certified RICS valuation report is required.

So, what is the difference between an online property valuation and a RICS certified valuation, and when should you consider each?

What is the difference between online, desktop and physical valuations?

Online valuations give you a quick, ballpark estimate using recent sales and local market trends.

A desktop valuation takes things a step further; a certified RICS valuer reviews property records and market data behind the scenes, checks for any restrictions without actually visiting the home.

Finally, a physical valuation is when a certified RICS valuer walks through the property in person to look at its real condition, layout, and distinct features. Which one you should choose really comes down to what type of property you own, to why you need the estimate and how accurate it needs to be.

Here is how the main options compare.

It is worth remembering that a market appraisal from an estate agent is not the same as a certified RICS valuation. If the intention is to transfer ownership, gifting, refinancing or arranging a Will, the banks, solicitors, tax accountants and all parties involved in the transaction, will require a RICS certified valuation report on the property.

When do you need a certified RICS valuation report?

• Refinancing your property: Lenders often want an updated look at what your home is worth before approving a new loan term.
• Transferring ownership: If you’re transferring ownership to family members or calculating potential insurance premium for IHT, an official valuation keeps everything clear for taxes and legal records.
  Handling inheritance or probate: When settling an estate, an accurate property value is crucial for tax filings and dividing assets fairly.
• Resolving property disputes: An unbiased valuation can clear up disagreements during a divorce, business split, or legal settlement.
• Selling a property: If you are preparing to sell, an estate agent’s market appraisal can help you consider an asking price. A formal valuation may be needed if a lender, solicitor, tax accountant or parties within the transaction requests one.

The important thing is to establish the type of property you have and what you need based on your circumstances. A desktop valuation may be suitable in some cases, while others require a physical inspection valuation. The requirements of your lender, solicitor or other relevant organisation should guide that decision.

Is desktop valuation good enough for ownership transfer?

Yes for most cases if it’s a residential property, an apartment within a development block or landed property that is not too old. If your residential property is less than 10 years old then this is an easier and more affordable RICS certified valuation report, if your intention is to do a transfer between family members or gifting it away for tax structuring purposes.

This is the understanding that interior conditions in the home will not be too different compared to similar properties on the market in the same building and if any depreciation is taken into account it’ll be estimated based on standard wear and tear depending on the age of the building.

When might you need a physical valuation?

You might need a physical valuation under these circumstances:

• The bank specifies and requires it
• The tax revenue specifies and requires it
• The property is aged and major works may be required to upgrade the property
• Properties that have had renovations or upgrades across decades of use
• There are significant changes in the surrounding environment that may affect the land value of which the property is on
• To determine the physical structure of the property
• You have a commercial property and buyer specifies to check on certain conditions that are related to the business prior to acquisition
• You have a land and you are planning to build or sell it
• Any restrictions or caveats that are imposed on the property

Whether you are a seller, buyer or financial institution, a RICS certified valuation report is to provide you with all the information you need about the property, along with restrictions, risks as well as present and future value, depending on which position you are in:

• If you are taking a mortgage to purchase a new property or refinancing a property you own, the bank need it to calculate Net Present Value, risk assessment and economic conditions to determine a value should there be a need to foreclose the property
• The buyer engages to ensure that they are given the information on everything they need to know about the property before buying it. This can be arranged separately if the purchase is without a mortgage, the buyer then takes on all risk on the property acquisition.
• The seller or owner wants to gift, sell, transfer the ownership or build a portfolio and the certified valuation is a legal document required for tax purposes, wealth transfer or wealth building.

What if you own a London property from Malaysia?

The legal terms, industry practice, taxes and title documents are different from Malaysian properties. As they are regulated by different governments, policies and practices, if a Malaysian owns a property in London, it is still an asset that is either providing comfort for your family or serves as an income generating investment for retirement or wealth preservation.

So whether you are a buyer, seller or investor, whichever position you are in, it is good to have your property values checked every decade as good practice to better manage your assets, wealth or income to help you and your family decide to structure and continue to build on the wealth that you own to be built upon or give away.

Need guidance on your London property?

If you want to speak to an agent who understands both Malaysia and London property practices, speak to Benham and Reeves Malaysia team to get insights on practices in both countries. If you are unsure whether you should sell, hold or transfer your London property, or simply to get advice on what you’d like to do with your London property, get in touch with our Malaysian team to discuss your options and the support we can provide.

If you need help with lettings and managing your London property seamlessly from Malaysia, or get a quick sales estimate on your London property, find out more about our London property services.