The Royal Institution of Chartered Surveyors (RICS) is proud to announce the publication of its position paper on prudently conservative valuation criteria in the context of the Capital Requirements Regulation III (CRR) implementation in Europe. This critical document addresses the challenges and opportunities posed by the introduction of these criteria under Basel 3.1 standards, set to take effect on January 1, 2025.

A Collaborative Effort to Drive Consistency

The position paper, developed by the expert members of the European Prudent Value Working Group, reflects RICS’s commitment to advancing a unified, transparent, and resilient approach to property valuation in Europe. It emphasizes the importance of consistency across national frameworks to prevent regulatory fragmentation, protect investor confidence, and enhance market stability.

The prudently conservative valuation criteria represent a significant evolution in valuation practices. While they do not replace market value as the primary basis for loan origination and monitoring, they introduce an additional adjustment that addresses long-term sustainability and resilience in property markets.

Key Insights and Recommendations

The paper provides clarity on:

  • The core principles of prudently conservative valuation criteria.
  • The critical role of lenders, valuers, regulators, and stakeholders in ensuring effective implementation.
  • The need for harmonized guidelines to avoid discrepancies across markets and institutions.
  • The implications of these criteria for financial stability and systemic risk mitigation.

RICS advocates for a collaborative approach, urging EU member states, the European Commission, and the European Banking Authority to align efforts with industry stakeholders.

Looking Ahead

The implementation of these criteria is not just a regulatory requirement but an opportunity to strengthen the European property market and its contribution to economic stability. RICS remains committed to leading the way, providing expert guidance, and promoting collaboration to ensure the success of this transition.

Explore the Position Paper

To learn more about RICS’s recommendations and the steps needed to prepare for the CRR III implementation, read the full position paper in attachment.

Together, we can shape a resilient future for the European real estate market.

For more information, please contact Senior EU Public Affairs manager, Fausta Todhe at ftodhe@rics.org.

RICS Position Paper on the implementation of CRR in Europe

Download here

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