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Reconsiders the double sinking fund problem by looking at each of the common methods used. Investigates the underlying assumptions and the residual errors or inconsistencies. Notes that the use of traditional dual rate valuations results in a mathematical error within the valuation and an under‐valuation of the interest. Concludes that the Double Sinking Fund Method must be recommended in preference to Pannell′s Method.

Concludes an earlier paper by analysing the problems of negative contributions to the sinking fund. Notes that the use of traditional dual rate valuations results in a mathematical error within the valuation and an under‐valuation of the interest. Concludes that should the Chancellor of the Exchequer decide to allow exemptions from tax of sinking fund contributions and income within sinking funds the logic of dual rate valuation would be removed.

Several anomalies exist between current valuation theories and the various practices in use in the financial world. Most practitioners are aware that the traditionally used valuation tables are based on the premise that all monies are received/paid in arrear and that interest is converted to the account at the end of the year. It has been argued, for many years, that the adjustments needed to accurately reflect financial practice were too difficult to implement and, in any event, made little difference to the valuation. However, with very large rentals no longer being uncommon and with the existence of the large property portfolios, increased accuracy in the calculation of YPs, etc, and a more flexible approach to properly reflect financial practices is not only possible but desirable. This paper sets out to demonstrate how such accuracy and flexibility can be achieved.

The purpose of this paper is to re‐visit the problems of taxation consequences of sinking fund in the UK and to look at what is believed to be the only rational reason for using the dual rate adjusted for tax method variant.

The structure of this paper is: valuing a freehold and a leasehold interest by the single rate gross and net of tax approaches to show the logic that works with freehold valuation interest may not work with leasehold valuation; exploring the tax impacts on sinking fund; resolving the taxation issue of sinking fund; demonstrating the solution to the “double sinking fund problem” by the Greaves method and the single rate net of tax approach; and exploring the future of the dual rate theory.

The paper confirms that the traditional method is not satisfactory, even after the modifications made by the various methods mentioned above. The single rate net of tax approach is proved to meet all expectations and can be regarded as a more rational approach to the dual rate method.

Valuers of the “UK School” might consider that not only should dual rate valuation be regarded as defunct, but also that the more appropriate approach might be to move to a net of taxation approach.

This paper is the original work of the authors.

The purpose of this paper is to review the historic evolution of dual rate valuation practice in the UK from the nineteenth century to the present time.

The paper is based on a review of published books, articles and letters dating from 1852.

The study establishes the fact that single rate was the only method in use in the nineteenth century and notes the overlap of two methodologies and beliefs in the first half of the twentieth century. It confirms that by the late 1930s dual rate had replaced single rate and an “establishment opinion” on the essential need to value leaseholds dual rate on the basis of a set of commandments had emerged without any apparent disagreement. This position, with some debated refinements for the effect of tax and treatment of variable profit rents, is shown to continue through the twentieth century and is reaffirmed in standard textbook teaching at the start of the twenty‐first century. The review touches on the criticisms noted by academics in the latter part of twentieth century. It identifies as a key issue the continuing persistent misconception amongst UK valuers that there is a reinvestment assumption in the present value of £1 per annum.

Dual rate principles are shown in the paper to be untenable and the profession is advised to remove the method from future training of valuers and to cease to make any use of the method in the valuation of leasehold investments.

A preceding paper by Baum examined the valuation of reversionary freehold interests, distinguishing between conventional and modern approaches. This paper applies the same approach to the valuation of leaseholds, and falls into two parts. Part 1 examines conventional leasehold valuations and the criticisms that may be made, concluding that both dual rate and single rate conventional valuations should be abandoned except in limited circumstances. Part 2 identifies three alternative modern approaches — real value, rational model and DCF — and compares their use in three general variations of leasehold valuation. The results are compared, and recommendations for their use are made. Finally an overview of the application of modern approaches to investment property valuation is presented.

A dispassionate view of the degree to which North American appraisal practice exceeds UK valuation practice in quality (if indeed it does) is hardly to be expected in a journal devoted to the latter of these two combatants. Such a venture is not attempted in this paper.

The total cost of building services can be divided into three sections — initial capital costs (outside the scope of these articles), energy costs (dealt with last month) and operation, maintenance and repair costs. The cost of operating and maintaining the existing services of a building may or may not be under the direct control of the facilities manager. In an owner‐occupied building the maintenance team, either direct labour or contracted, would be responsible to him. If the building were leased, however, then it could well be that the landlord would retain ultimate control over the running of the main services, passing this on to the tenant as a service charge.

This introductory paper is the first of three which reconsider what has become an accepted defect in the conventional investment method of valuation.

Proposes to elucidate the relationship between implicit and explicit discounted cash flow (DCF) methods in freehold valuations.

Sets out a calculation of annual growth with respect to a rack‐rented property.

Finds that the advantage of the DCF model is that it makes the assumptions underpinning the valuation explicit.

This shows how the valuer is allowed to analyse the market and to answer not only the question of the price of the property but also the question of whether it is worth that price.