CeMAP CeMAP - Certificate in Mortgage Advice and Practice Property Valuation and Surveys 2 — Questions and Answers
Question 1: What is the 'comparable sales' method of property valuation?
- Valuing a property based on its rebuild cost
- Valuing a property based on its potential rental income
- Valuing a property by comparing it to recent sale prices of similar nearby properties (Correct answer)
- Valuing a property based on land value alone
Correct answer: Valuing a property by comparing it to recent sale prices of similar nearby properties
The comparable sales method identifies recently sold similar properties in the area to establish a fair market value.
Question 2: A Homebuyer Report is most suitable for which type of property?
- Newly constructed properties only
- Conventionally built properties in reasonable condition (Correct answer)
- Listed buildings or properties of unusual construction
- Properties with known major structural defects
Correct answer: Conventionally built properties in reasonable condition
A Homebuyer Report (Level 2 Survey) is designed for standard construction properties that appear to be in reasonable condition.
Question 3: What does an Energy Performance Certificate (EPC) assess?
- The property's rebuild cost for insurance purposes
- The energy efficiency and environmental impact of the property (Correct answer)
- The structural integrity and safety of the property
- The property's current market value
Correct answer: The energy efficiency and environmental impact of the property
An EPC rates a property's energy efficiency on a scale from A (most efficient) to G (least efficient) and estimates its environmental impact.
Question 4: For how long is an EPC valid once issued?
- 1 year
- 5 years
- 10 years (Correct answer)
- 25 years
Correct answer: 10 years
An EPC remains valid for 10 years from the date it was issued, although a new one is required if the property is sold or rented within that period if significant changes have been made.
Question 5: What is 'blight' in the context of property valuation?
- A specialist type of structural survey
- Any factor that negatively affects a property's value or saleability (Correct answer)
- A government scheme to compensate owners of underdeveloped land
- A planning restriction preventing property extension
Correct answer: Any factor that negatively affects a property's value or saleability
Blight refers to any adverse factor — such as proximity to a proposed motorway or power lines — that reduces a property's market value.
Question 6: What is the 'reinstatement value' of a property and why is it important?
- The current market sale price used to set the asking price
- The estimated cost to completely rebuild the property if it were destroyed, used for buildings insurance (Correct answer)
- The rental income potential used by buy-to-let lenders
- The land value after demolition of the building
Correct answer: The estimated cost to completely rebuild the property if it were destroyed, used for buildings insurance
The reinstatement value is the estimated cost to rebuild the property from scratch and is the basis for calculating adequate buildings insurance cover.
CeMAP CeMAP - Certificate in Mortgage Advice and Practice Property Valuation and Surveys 2
What is the 'comparable sales' method of property valuation?