The senior partner at Shepherd, one of the largest independent firms of chartered surveyors in the UK, has forecast that both commercial and residential property markets in 2011 will contract further which, coupled with the prospect of costly Professional Indemnity Insurance (PII) renewals, will spell challenging times ahead for some surveying firms.
George Brewster, senior partner at Shepherd, said: “One of the major threats facing the surveying profession at the moment is the question of PII, with a rise seen in the number of claims against surveyors for alleged over-valuation of property.
“Whilst some commentators have suggested that this amounts to surveyors paying for the sins of the past, to some surveyors it can appear that lenders seem to be searching for someone to blame for any residential and commercial property losses incurred over recent years.
“Certainly, lenders are starting to put considerable pressure on surveyors to justify their valuations during that period leading up to the onset of the recession – perhaps rightly so in some circumstances – though in my experience any over-valuations would be the exception to the rule and the fact is that some lenders seem to have forgotten that property values were exceptionally high throughout the period 2005-2007.
“There’s more readjustment and correction in the marketplace yet to come, I would expect in the region of 10% to 15%, so that the first half of 2011 is set to be more challenging than 2010, though we should start to see some evidence of recovery emerge by the third quarter.
“At present, however, both commercial and residential sectors are suffering from a lack of finance and the consequence of that is a general over-supply with values too high in both markets. That raises the question of just how do you now find a good investment property? The answer is that tenant covenant is now more important than any other criteria in a lease.”
Shepherd offers a multi disciplinary property service that includes valuation, commercial agency, building surveying, rent reviews, development and investment consultancy, rating and property management.
For further information please contact George Brewster Shepherd tel 0131 225 1234
Issued on behalf of Shepherd by Liquorice Media tel 0141 561 4018 www.liquorice-media.com
Date 8 December 2010