Tag Archives: European Valuer Journal


JUNE 7, 2024 – The following comes from The European Valuer Journal:
The ‘Banking Package’ included a revision of the Capital
Requirements Regulation (CRR) which introduced a new
concept of ‘property value’ founded on ‘prudently conserv
ative valuation criteria’ that valuers will have to accommo
date alongside market value. Soon to be on the EU statute
books, it will come into effect on 01.01.2025 the same day
as EVS 2025. The Blue Book will contain a Guidance Note
with an interpretation of the new CRR concepts that the
European Valuation Standards Board issued – and that this
Journal liberally commented and publicised – shortly after
it became clear that the relevant provision had achieved
political consensus and wouldn’t change.
The other CRR game changer was Parliament and
Council’s ECB-inspired rejection of the Commission’s
attempt to extend banks’ freedom to use stand-alone,
valuer-free AVMs to revaluation and even to valuation
at origination. This extraordinary event will have conse
quences. Reiteration by the highest European authorities
of the central role of the qualified independent valuer
in ensuring the safety and stability of financial and real
estate markets will command a revision of the European
Banking Authority Guidelines on loan origination and moni
toring that confined mortgage valuers to a ‘desktop’ role so
poorly defined that banks could interpret it as little more
than an exercise in rubberstamping AVM ‘value proposals’
Mortgage Lending Value (a 120+ year old German valuation concept) was introduced in the USA about 15 years ago. It has not gained traction as Americans like Market Price and the bubbles it produces. MLV basically eliminates the ups and downs of property value and provides a stable number to loan against. The EU has now adopted the ‘prudently conservative valuation criteria.’ This is essentially MLV. But, other countries didn’t want to simply adopt a German concept. Maybe a decade or two from now this will become part of Basel and American lenders (and appraisers) will be forced to use this value instead of Market Value (Price).
It is also interesting that the EU basically killed the idea of AVMs.
The Mann