The application of theories of professionalism in valuation practice in the Republic of Ireland

Gallivan, A

Abstract

Housing is the most important class of consumption good and there is evidence of a strong link between housing and business cycles. In 2008 a global financial crisis caused partially by severe and dramatic reductions in property values, put the spotlight on the lack of guidance provided by lending institutions along with inconsistent, enthusiastic, and possibly negligent lending practices. In 2007, as an asset, housing counted for 72% of Irish wealth, therefore it is not surprising in the aftermath of the global and economic financial crisis, Ireland’s economy suffered an exceptionally severe downturn. Despite the global nature of the crisis there were domestic factors in RoI, the origins of the financial crisis are well understood to be a property bubble, financed by credit. With the failure of the banking system the critical assessment of the severity and scope of the problem through relevant objective research is an appropriate response to the Irish financial crisis. As valuers are a part of the documentation required for loans, valuers were highlighted as an area of concern. Solving practice-based problems requires evidence, the concept of professionalism is important as professional services may not be standardised and can be unique to the individual. Professionalism as a latent attribute along with sound professional standards require study, definition, and measurement to minimise the impact that property professionals may have on any future economic challenges. There are social consequences of expert knowledge, professions still retain their typical institutions, although their credibility has been reduced by scandals of negligence, malpractice, or fraud that cast a general pall over professional ethics. Professionalism requires an agreed cognitive basis and attributes “an ideal to be pursued”, however the valuation profession does not have a clear definition of professionalism therefore cannot measure it. In the run up to 2008 (and the financial crisis) a gap had developed between valuation professionals and society in RoI and professional ideals and knowledge will only be kept if the environment reinforces them. This research investigates the role of professionalism in the delivery of valuation services for secured lending in the Republic of Ireland (RoI) in the context of the financial crisis, 2008 - 2014.

The research relied on a quantitative research methodology and carried out a critical examination of the literature and an extensive survey using questionnaires administered online. The literature review synthesises emergent themes of professionalism, regulation, and ethics in the context of evolving professions. These themes are used to derive indicators for professionalism as they relate to the valuation profession, which were subsequently used to examine the role of professionalism in valuation practice in RoI during the period up to the financial crash based on empirical data obtained from the online questionnaire survey. The population for the online study was all the property service providers licensed to act as such in the RoI in 2012. Valuers are as yet an unquantified subsection of the property service providers population in the RoI. In 2012, there were 4122, licensed individuals in the RoI (Property Services Regulatory Authority, 2012). The entire population for the purpose of the online survey is 4060 (excluding those who although licensed, do not practice).

The research finds that there are generally accepted tenets of professionalism and society is better protected when professionals are intentionally directed (directed professionalism) and focused on ethical interactions, accountability, reflection, transparency, and improved standards. As defining professionalism is difficult, a correlation of individual subjective views on professional behaviour produces evidence of positive and negative behaviours and the likelihood of future positive or negative behaviours. The valuation profession does not have a clear definition of professionalism or what professional behaviour consists of, therefore cannot measure it. Up to the global financial crash Ireland's valuers worked under a regulatory framework that did not encourage professionalism due to its lack of emphasis on standards. The research finds that the valuation profession in Ireland is in the process of professionalisation, following the path of other jurisdictions. However, there is a specific need to put more emphasis on valuation as a profession as to make it distinct from other property services with the need for a separate licensing class within the present system.

Citation

Gallivan, A. The application of theories of professionalism in valuation practice in the Republic of Ireland. (Dissertation). University of Salford

• Thesis Type: Dissertation
• Deposit Date: Apr 21, 2021
• Publicly Available Date: Apr 21, 2021
• Award Date: Oct 1, 2020