One independent chartered surveyor firm senior partner is forecasting challenging times in the future for his industry. Residential and commercial property markets will continue to shrink in 2011, and many firms will face costly renewals of their professional indemnity insurance cover.
Shepherd senior partner George Brewster remarked that professional liability insurance is one of the major threats currently facing the surveying profession. This is due to an increase in claims brought against surveyors for allegedly over-valuing property.
Some commentators have made the suggestion that surveyors are paying for past sins, stated Mr Brewster. The senior partner said that some surveyors have interpreted the rise in business liability insurance claims differently however. Many others feel that lenders are using surveyors as scapegoats to take the blame for any commercial or residential property losses that have occurred recently.
Mr Brewster remarked that lenders have indeed begun to pressure surveyors in regards to their valuations made during the pre-recession period. Some lenders may be correct in pointing the finger at surveyors. Mr Brewster found that in his own experience over-valuations are more the exception rather than the rule however. He added that many lenders have chosen not to remember that property values were exceedingly high from the 2005 through 2007 period.
The industry expert expects approximately 10 to 15 per cent more correction and readjustment to occur in the marketplace. This could make the first half of next year more of a challenge than the current year. Evidence of recovery may begin to become visible by the third quarter of 2011, he predicted.
Both the residential and commercial sectors currently suffer from a lack of finance however. This leads to the consequence of an overabundance of supply, which makes values too high in both sectors. In order to find a high-quality investment property in the current landscape, Mr Brewster recommends carefully considering the tenant covenant when reviewing a lease.