UK Real Estate Sector Aligns to Support Reform of Valuer Liability Under AIFMD
The UK real estate investment industry has unified behind a significant regulatory reform proposal: the removal of unlimited liability for external fund valuers under the Alternative Investment Fund Managers Directive (AIFMD). This issue has become a central focus in the UK Treasury and Financial Conduct Authority’s (FCA) consultations on updating the country’s post-Brexit AIFMD regime, which aim to simplify rules and strengthen the UK’s position as a global investment hub.
Under current legislation inherited from the EU, external valuers face unlimited liability despite often being unable to obtain appropriate professional indemnity insurance. This has deterred qualified professionals from undertaking external valuations, leading to reduced independence and transparency in fund asset assessments. Industry leaders argue that this not only exposes fund managers and investors to increased risk, but also undermines market integrity.
Melville Rodrigues, head of real estate advisory at Apex Group and coordinator of a cross-industry working group, welcomed the government’s willingness to consider reform. “The current framework places disproportionate risk on valuers and ultimately disadvantages investors,” Rodrigues noted. “We have proposed a model that allows for a fair, proportionate cap on liability aligned with the scale of the fund. This approach now has broad industry support and we are encouraged by the momentum behind it.”
Alongside the issue of value liability, the consultation seeks to address broader inefficiencies in the UK’s AIFMD framework such as duplicative compliance requirements, inconsistencies between listed and unlisted funds, and regulatory cliff-edges that inhibit growth. Stakeholders, including the Association of Real Estate Funds (AREF) and the European Association for Investors in Non-Listed Real Estate Vehicles (INREV), have emphasized the importance of creating a streamlined, proportionate regime that fosters innovation while maintaining investor protection.
The unified response from industry associations, legal experts, and fund managers reflects a shared priority: modernizing regulation to better reflect market realities without compromising oversight. “This level of alignment across the sector is both rare and encouraging,” said Jeff Rupp, Director of Public Affairs at INREV. “It demonstrates the urgency and significance of the proposed reforms.”
With the consultation period now closed, the FCA is expected to issue detailed draft rules in the first half of 2026. Should these reforms move forward as proposed, they are likely to improve access to independent valuations, reduce legal uncertainty, and enhance the UK’s appeal to both domestic and international real estate investors.
