The Red Book, in one paragraph
The Red Book is RICS Valuation – Global Standards: the mandatory rulebook that RICS members follow when they value property. It covers who may value, what must be agreed with the client before work starts, how the property must be inspected and investigated, which bases of value may be used, and what the report must contain. It is not guidance to be taken or left. For an MRICS valuer it is mandatory, and departures from it have to be disclosed and justified.
Which edition applies
The current edition is RICS Valuation – Global Standards, published December 2024 and effective from 31 January 2025. It incorporates the International Valuation Standards effective on the same date. There is no 2026 edition — if you are told a valuation complies with a "2026 Red Book", that is not a thing.
RICS also publishes a Cyprus National Supplement to the Red Book, which applies the global standards to Cypriot law and market practice. A valuation of Cypriot property by an RICS member should be prepared under both.
Since 1 September 2016, RICS members carrying out Red Book valuations in Cyprus must be registered under the RICS Valuer Registration Scheme (VRS). Registration puts the valuer's work under RICS monitoring. It is a fair question to ask any valuer, and a registration number is a one-line answer.
Separately, and before any of this: valuing property in Cyprus requires registration with ETEK under Law 224/1990. RICS membership does not replace it. A valuer working here should have both.
VPS 1: what gets agreed before we start
The part of the Red Book that most affects you as a client is VPS 1, terms of engagement. It requires the valuer to set out the terms of the instruction in writing and obtain the client's agreement before the valuation is carried out. In practice that means you receive a document confirming, at minimum:
- who the valuer is, their status, and their competence to act
- who the client is, and any other parties entitled to rely on the report
- the property or interest being valued
- the purpose of the valuation, and the basis of value that follows from it
- the valuation date
- the currency
- the extent of the inspection and investigations, and any limits on them
- the sources of information to be relied on
- every assumption and special assumption to be made
- the format of the report and any restrictions on its use, distribution or publication
- confirmation that the valuation is prepared in accordance with the standards
- how the fee is calculated
- the complaints handling procedure, a statement that the work may be subject to RICS monitoring, and any limitation on liability
Two practical consequences. First, there are no surprises about scope or cost: the fee is fixed in writing, and it does not move with the figure reported. Second, the assumptions are agreed at the front, not discovered at the back — if the valuation has to assume that an unauthorised extension will be regularised, or that a title deed will issue, you know before the work starts, not when the bank refuses the report.
The Red Book goes on to govern inspections and record-keeping, the content of the report, bases of value and assumptions, and valuation approaches and methods. Additional requirements apply to particular purposes — secured lending valuations, for example, carry their own specific disclosure and reporting obligations.
Bases of value, in plain terms
The basis of value is the question the valuation answers. Use the wrong one and the figure is useless, however careful the analysis.
Market value
The estimated amount for which the property should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing, where both parties acted knowledgeably, prudently and without compulsion. It assumes an ordinary sale in the open market — not a forced sale, and not a sale to one particular buyer who happens to want it badly. This is the basis behind most lending, sale, estate and tax valuations.
Market rent
The same idea applied to letting: the rent the property should command on the valuation date, on stated lease terms, between willing parties at arm's length. The lease terms matter as much as the property, so they are stated in the report.
Fair value
Used mainly for financial reporting: the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. In most, though not all, cases it produces the same figure as market value. Where your accountant or auditor asks for fair value, say so — it changes the reporting requirements.
Investment value (worth)
The value of the property to a particular owner or prospective owner, given their own objectives, tax position and cost of capital. It is not market value and is not interchangeable with it. It answers "what is this worth to me?", which is often the question an investor actually has.
Red Book valuation versus an opinion of price
An estate agent's opinion of price is a commercial view of what a property might fetch. It can be well informed. It is a different product.
| Red Book valuation | Opinion of price | |
|---|---|---|
| Prepared by | Named valuer, ETEK registered, MRICS, VRS registered | Anyone |
| Written terms before work starts | Required | Not usually |
| Basis of value and valuation date stated | Required | Rarely |
| Inspection and investigations recorded | Required | Variable |
| Assumptions disclosed | Required | Rarely |
| Evidence and reasoning set out | Required | No |
| Fee fixed in writing before the work starts | Required | Often commission-linked |
| Professional indemnity insurance behind it | Required | Not necessarily |
| Meets the standard banks and courts require | Yes | No |
The same distinction applies to the Land Registry's General Valuation (Γενική Εκτίμηση). It has a base date of 1 January 2021 and is produced by mass appraisal for taxation. The Department of Lands and Surveys states that it cannot be used for sales, investment or borrowing. It is not market value, and no amount of adjustment in a spreadsheet turns it into market value.
Why banks and courts require it
Banks. The Central Bank of Cyprus Credit Granting and Review Processes Directive requires lenders to maintain an approved panel of independent valuers, to verify each valuer's professional indemnity insurance annually, and to require the valuer to disclose any connection to the buyer or the seller. The Directive recognises the RICS Red Book, European Valuation Standards and the International Valuation Standards. A lender needs a document that fits that framework and survives its own credit and audit review.
Courts. A court needs an opinion that can be tested. A Red Book report states its basis, its date, its assumptions, its evidence and its reasoning, and it is signed by a valuer who can be cross-examined on each of them. An opinion without a stated basis cannot be tested, so it carries little weight.
Everyone else. The reason is the same for a private buyer as for a bank: you are entitled to know what question was answered, at what date, on what evidence, and by whom.
Request a Red Book valuation
Tell us the property and the purpose. We will confirm the basis of value, the assumptions, the form of the report and the fee in writing before any work begins.
info@cypruspropertyappraisals.com · +357 25254222 · mobile +357 96569477
Tell us the property and the purpose.
We confirm in writing what the report will contain and what it will cost, before any work begins.