Press release

2017 Study on the Valuation of Property for Lending Purposes

1 September 2017

The European Mortgage Federation-European Covered Bond Council (EMF-ECBC) is pleased to announce the publication of the 2017 Study on the Valuation of Property for Lending Purposes, which provides comprehensive commentary on valuation practices for lending purposes across the European Union (EU) and beyond.

 

With a view to endorsing and promoting the highest standards in property valuation, the EMF’s Valuation Committee has regularly updated and revised its Study on the Valuation of Property for Lending Purposes since 1998, to provide a deeper understanding of the context and technicalities of valuation practices in the EU.

 

Indeed, accurate and transparent property valuation is essential to the mortgage lending and covered bond businesses on a number of crucial levels: from an origination perspective, in terms of risk management and capital adequacy, and for the issuance of covered bonds.

 

The 2017 update of the Study provides readers with three new introductory articles presenting an overview of the EU regulatory landscape specific to property valuation, a 2017 update of the EMF-ECBC Guidelines on the Independence of the Valuer, as well as an insight into the key applications and features of Automated Valuation Models (AVMs) across Europe.

 

The main section of the 2017 Study encompasses comprehensive commentary on valuation practices in EU Member States and, for the first time, a number of countries beyond the EU’s borders i.e. Montenegro, Russia, Serbia and Ukraine. These individual country chapters focus on fundamental valuation features and practices from a national perspective. Reflecting the variety in national history and market developments, the Study details countries’ different systems for the valuation of property for lending purposes, while contextualising the EU regulatory requirements in relation to property valuation with respect to the calculation of capital requirements and in the context of the covered bond cover pool.

 

In addition, the EMF-ECBC’s Profile on Risk Related Criteria for Valuation, which is intended to enhance the quality of valuations by covering risk criteria of specific relevance to mortgage lenders, is once again included in an annex to the updated Study.

 

Following the Global Finance Crisis, it has never been more important to ensure transparency and confidence in the collateral system. As a key tool to define and assess credit quality, and manage risks on banks’ balance sheets, the valuation of property plays a fundamental role in ensuring the integrity of both the mortgage lending and covered bond businesses. In this respect, the 2017 Study of the Valuation of Property for Lending Purposes presents a post-crisis picture of valuation practices in the EU and beyond, focusing on national and EU developments which have taken place in recent years to ensure accuracy, reliability and consistency of property valuation going forward.”¬Ě

 

Luca Bertalot, EMF-ECBC Secretary General

 

The 2017 Study on the Valuation of Property for Lending Purposes is available here.