Towards a Standard Property Income Valuation Model: Rationalisation or Stagnation?

In a previous paper Sykes derived a mathematically consistent investment valuation model for freehold properties which he referred to as the Rational Model . This new model overcomes certain serious failings of other methods commonly in use. The present paper readdresses the arguments of the earlier paper in a manner rather more familiar to a practising valuer and compares current methods of valuation with the Rational Model . It is also shown that the Rational Model can be simply adapted for the valuation of leasehold interests without resorting to a separate (and usually quite artificial) ‘sinking fund’ rate.