Greater choice of hybrid valuations for more types of homes

The Real Estate Valuers Register of the Netherlands (NRVT) has changed the rules for so-called hybrid valuations (or appraisals). These are valuations of, for example, homes, where a computer model is used, which is then checked by a valuer (or appraiser). The change to the rules allows valuers to choose from multiple providers of such computer models. In addition, it will be possible to value more condos (or flats) in this hybrid manner. Consumers will thus have more options to choose from for affordable and high-quality valuations. ACM will keep a close watch on the implementation of the new rules.

Hybrid valuations

Buyers or sellers of homes need to have the property in question appraised, for example when applying for a mortgage with a bank. Since 2021, such valuations can, in some situations, also be done in a hybrid manner: hybrid valuations. This is a combination of a computer model and a valuer. The valuer checks whether the model that the computer uses, generates the correct value. This option has been described in European rules. NRVT has fleshed out this option, and will, in the public interest, enforce compliance with these rules.

Fair competition as a result of changes to the rules

Following reports filed by market participants, ACM has pointed out to NRVT the anticompetitive risks posed by its rules. In response, NRVT adjusted its rules on several points. There are three changes:

• Condos (or flats), too, can be valued in a hybrid manner if sufficient up-to-date information is available, for example from the unit’s homeowners’ association.
• Providers of computer models can demonstrate that their model is robust, for example using an accountant’s statement. The valuer can then have confidence in the reliability and accuracy of the calculation model.
• Under European rules, valuers must demonstrate that they have sufficient knowledge of and experience with the property’s area. They can do so, for example, by stating that they live in the area, but, in the future, they can also demonstrate their knowledge of and experience with the area in other ways.

ACM assumes NRVT will monitor and oversee the real-world effects of the adjusted rules.

ACM and the housing market

The housing market is one of ACM’s top priorities. The Dutch housing market is extremely tight at the moment. Many people have a hard time finding affordable housing. The protection of consumers against unfair practices by providers on the housing market (rentals and sales) deserves special attention. Furthermore, ACM conducts a study into possible market power on the municipal-land market, particularly sites that are not being developed even though development is allowed at those sites. In addition, ACM will assess whether distortions of competition exacerbate the housing shortage.