Chiltern District Council
Affordable Housing Development
Economics Study
Report for the consideration of Chiltern District Council;
this does not constitute Council Policy
July 2007
Prepared by
55 West Street
Chichester
West Sussex
PO19 1RU
01243 771304
www.adamsintegra.co.uk
Chiltern District Council – Affordable Housing Development Economics Study
CONTENTS
Executive Summary
iii
1.
Introduction
1
2.
Methodology and Related Commentary
4
3.
Results Analysis
22
4.
Key Points and Recommendations
42
5.
Wider Conclusions and Recommendations
45
FIGURES
Figure 1: Simplified Example of Gross Development Value Calculation
7
Figure 2: Summary of Value Points relating to property types
12
Figure 3: Summary of Proval Appraisals – RSL Payment to
Developer based on Unit Type, Value and Tenure
15
Figure 4: Summary of Table/Graphs Relationship from Appendix II
23
Figure 5: Extract of Results from Tables 1 & 3 – 5 Unit Schemes: Scheme
& Appraisal Types, Residual Land Value, RLV as % of GDV and
Percentage Reduction in Residual Land Value from Adopted
Policy Position (Value Points 1 & 3)
26
Figure 6: Extract of Results from Tables 1 & 3 – 10 Unit Schemes:
Scheme & Appraisal Types, Residual Land Value, RLV as % of
GDV and Percentage Reduction in Residual Land Value
from Adopted Policy Position (Value points 1 & 3)
27
Figure 7: Extract of Results from Tables 1 & 3 – 15 Unit Schemes:
Scheme & Appraisal Types, Residual Land Value, RLV as % of
GDV and Percentage Reduction in Residual Land Value
from Adopted Policy Position (Value points 1 & 3)
29
Figure 8: Extract of Results from Table 1 & 3 – 25 Unit Schemes: Scheme &
Appraisal Types, Residual Land Value, RLV as % of GDV and
Percentage Reduction in Residual Land Value from Adopted
Policy Position (Value Points 1 & 3)
31
Figure 9: Extract and Comparison of Nil Cost Land Results Compared to
Mortgage Funded Approach
34
Figure 10: Comparison of Appraisal Results at 15% and 20% Developer’s
Profit
35
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APPENDICES
Appendix I
Table Showing Range of Appraisals & Development
Scenarios
Appendix II
Results of Land Residual Calculations
Appendix III
Chiltern District Property Values Report
Appendix IV
Glossary of Terms
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EXECUTIVE SUMMARY
•
In September 2006 Adams Integra was instructed by Chiltern District
Council to study how development viability is impacted by a range of
potential policy options for planning-led affordable housing.
•
This resulting study report necessarily contains some technical terms, which
are explained in the text, but for simplicity also in the Glossary at Appendix
IV.
•
The Council’s brief was written and the study carried out in the context of
seeking to maintain the supply of housing sites, whilst securing an optimal
contribution to affordable housing need through market led housing
developments.
•
Under current Local Plan Policy, introduced in July 2004 by way of an
adopted amendment to the Chiltern District Local Plan 1997, the Council
requires schemes of 15 or more dwellings to provide 30% affordable
housing. This relates to Built-Up Areas excluded from the Green Belt.
•
In considering potential policy positions on affordable housing the Council
sought Adams Integra’s recommendations on the scope to increase
planning-led affordable housing delivery through increasing the proportion
sought and/or reducing the site size threshold without compromising
scheme viability.
•
As a part of the project brief Adams Integra was also required to advise on
the impacts of affordable housing tenure mix on scheme viability, and to
make recommendations on the likely scale of appropriate payments in lieu
of on-site provision where that route of contribution is mutually agreed as
more appropriate than on-site provision.
•
The study involved carrying out developer type appraisals on a range of
notional development scheme types agreed with the Council.
•
The notional schemes ranged from 5 to 100 dwellings in size, of varying
mixes (see Appendix I – Development Scenarios). This was to ensure that
we tested viability at a range of potential threshold sizes, as well as at
affordable housing proportions from 20% up to 50% depending on site size.
•
Our results found that a 40% level of affordable housing provision on market
schemes of 15 or more dwellings could be supported in viability terms.
•
While the viability outcomes from increasing requirements in this way are
significant, Chiltern is a high value area. This level of provision would be in
line with that in other South East Local Authority areas where high levels of
need and similar development markets exist.
•
We consider that the trigger threshold could be lowered from 15 without
unduly compromising site viability, providing the proportion of affordable
housing sought on smaller sites is judged appropriately and practicalities of
provision are taken into account.
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•
In our view, the Council would also need to demonstrate the wider
justification for lowering thresholds in terms of need, local site supply and
market characteristics. Government Guidance within Planning Policy
Statement 3 (“PPS3”) is framed in terms of a “national indicative minimum
site size threshold” of 15 dwellings. However, at paragraph 29, the PPS
does now give more scope for flexibility and local consideration than
previously existed. It states that Local Authorities “can set lower minimum
thresholds where viable and practicable….” There need no longer be a
distinct approach to thresholds and related policy in rural areas where more
potential flexibility previously existed. In our view the widened scope for
flexibility could apply in all areas – smaller and larger settlements, rural and
urban.
•
So in tandem with these viability outcomes, the Council will need to
consider the type and number of sites likely to come forward alongside
housing need, and the delivery which could flow from various approaches.
We are aware that work is underway on a Strategic Housing Land
Availability Assessment (to be completed during the Autumn of 2007) with
work on a Strategic Housing Market Assessment also due to be progressed
this year.
•
Should the Council propose to introduce a lowered affordable housing
policy threshold as a possible policy option, for example affecting sites of 5
dwellings or more, then we would recommend introducing the affordable
housing requirement at a lower proportion, not in excess of 30%, on the
smaller sites which will be newly ‘captured’ to give a dampening effect to the
policy introduction given that newly captured sites are those which show the
greatest impacts. On the very smallest sites newly captured, a proportion of
20% might be more appropriate. Thus a graduated or sliding scale type of
approach to affordable housing targets might be envisaged – starting at
20% on sites of 5, moving possibly to a maximum of 30% on sites of 10;
and to 40% at sites of 15.
•
We have not modelled any scenarios of less than 5 dwellings for this study.
We are, therefore, not able to either support or advise against any future
policy direction which may be aimed at sites of fewer than 5 contributing in
some way to affordable housing need. This was beyond the scope of the
brief. While it would need to be tested, given Chiltern values in pure viability
terms this could probably be considered in future, if based on appropriately
pitched requirements. We suggest that it would be better, however, to
consider such policy development in steps in response to the delivery
results from, and impact of, the sort of changes now being considered and
tested here. There would be practical issues to consider too, as are
applicable to the slightly larger sites the study does cover. In our view, the
smaller the site, the more in focus the practical issues tend to be – design/
mix, affordability, management/dispersed stock, etc. The issues around
ensuring sufficient incentive to the land owner and developer to still pursue
the scheme also come sharply into focus in our view. The role of some level
of financial contribution may be relevant, as picked up again below.
•
The effect of the Council’s position on rounding of affordable housing
numbers should also be considered in pursuing new policy positions and
ultimately the detail added through Development Plan Documents (DPDs)
or Supplementary Planning Documents (SPDs). Particularly on the smaller
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sites, of the type likely to be in focus should the Council consider a lowering
of thresholds below 15, the rounding can have a significant impact.
Proportions can be misleading or become distorted once rounding is
applied. However, the tone of results we have found through this study is
generally positive in site viability terms. Therefore, providing the Council
bears in mind any rounding implications as a part of considering detail and
wider site specifics in the context of the target-led, negotiated approach,
there should not be major issues.
•
Given the points we raise about the practicalities of affordable housing
delivery on smaller sites, the potential issues with numbers rounding and
the steepest viability impacts normally being on newly captured sites, it is
possible that the Council could consider the collection of payments in lieu of
on site provision on smaller sites. Those sites could be in the 5–10 or 5–14
dwellings size range. This could be a policy option, and it is one that we are
currently exploring with a number of Local Authorities in West Sussex and
Surrey; we are aware that others are considering this too.
•
As with all payments in lieu (“commuted sums”) approaches, the Council
would need a strategy for using such sums and transparent approach to
record keeping related to that.
•
We do not consider that a 50% proportion of affordable housing is likely to
be a sustainable target, viability-wise, on a broadly applicable or Districtwide basis. Our appraisal results show potential scheme viability issues on
a range of site sizes in lower value development instances within the District
based on this assumption. This is particularly when that level of potential
requirement is judged alongside an expectation that a high proportion of
affordable rented accommodation will be sought with no grant input
assumed. PPS3 requires Local Authorities to consider likely funding
availability in setting local criteria.
•
If the Council were to be flexible on tenure and consider a wider range of
affordable housing, then our results indicate that up to 50% affordable
housing on certain sites could be achievable, however. Any such
circumstances would most likely be on particular allocations – potentially
strategic sites, greenfield releases or where there is public ownership
involved. In this type of situation, the sites would come forward and be
guided through DPDs and SPD. So community infrastructure expectations
(including affordable housing) relating to their delivery could be consulted
on, set out clearly and established very early on. On some such sites there
may also be a different valuation scenario, potentially influencing viability, if
there were no realistic high value existing or alternative use.
•
Therefore, while we would not rule out a higher level of provision than 40%
in particular or strategic cases, to be considered on their merits as a
potential boost to overall affordable housing supply, we caution that a range
of issues would need to be taken into account. The likelihood is that
significant additional grant funding would be needed to support such an
approach involving a high proportion of affordable rent, or more flexibility
exercised on tenure mix. It is likely that a balanced affordable tenure mix
would need to be considered.
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•
Regardless of the detailed policy options that the Council may seek to take
forward, affordable housing requirements must be expressed as clear
targets, which can then form the basis for practical negotiations with
developers where site circumstances lead to a departure from the targets.
In setting out policy and supporting text the Council should make clear their
approach, including outlining the general circumstances in which a
departure from targets might apply.
•
Development viability will vary from site to site, and there will be no
substitute for scheme specific discussions. The context of this study is the
setting of clear policy targets as a basis for a, necessarily, negotiated
approach to provision.
•
Factors which may influence the viability of proposals on any particular site
could include the incidence of abnormal development costs, the scale of the
overall planning obligations requirements (sometimes called the collective
infrastructure burden), existing or competing land use values for the site, the
landowner’s particular circumstances and aspirations, or indeed, a
combination of some or all of these factors.
•
That leads us to say that there can be no clear cut-off points, given by way
of policy positions or guidance, at which schemes will or will not always
work. However, allied to a practical approach the 40% target on sites of 15
or more dwellings should be a workable one as the headline, and help the
Council to bolster delivery as larger sites come forward. It would apply to all
site types, including for sheltered or elderly persons’ housing.
•
The introduction of an affordable housing requirement on smaller sites,
albeit at a lower starting proportion would also make a valuable contribution
to need given the nature of sites typically coming forward. We appraised
schemes of 5 units on the basis of a 20% requirement and sites of 10 units
at 20% and 30%. These options are supportable in viability terms and thus
a form of graduated approach (sometimes known as a “sliding scale”) might
be considered by the Council to dampen the viability impacts on newly
captured small sites.
•
A target tenure mix of up to 70% affordable rent would be a sound starting
point from a viability point of view, again with a practical, adaptable
approach adopted.
•
The 2002 Housing Needs Survey suggested a need for 88% of the
affordable homes provided to be for social (affordable) rented tenure. The
2004 update showed an increase in this level.
•
Scheme viability looks at its least favourable when the affordable housing
element comprises 100% affordable rent. Whilst it appears that that might
be sustained on pure viability grounds, particularly away from the lower
value development instances, we comment that there are perception issues
which may not be aided by such a dominance of affordable rent. We
consider that a range of affordable housing tenure models may have a
place in the Chiltern context, again depending on site type and location, and
local need. Balanced against its need to seek a majority of affordable rented
accommodation, the Council will need to maintain an understanding of
viability and funding issues which can flow from this, together with
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sustainable communities objectives, and be practical in terms of the tenure
mix ultimately delivered.
•
We have also investigated the option of a “nil cost land” (see Glossary –
Developer Payment Type) approach for affordable housing on a sample/
comparative basis. The viability outcomes of the schemes appraised on the
basis of “nil cost land” are such that this could also be an option for the
Council to consider in underpinning its future approach. Of relevance here is
the Housing Corporation’s recent announcement (2008-11 funding bid
round pre-prospectus) concerning reduced funding for straightforward
Section 106 provision.
•
In our view, Local Authorities will increasingly need to secure a significant
level of subsidy through landowners and developers. A nil cost land (often
nil cost serviced land) route is an increasingly common and, in our view,
workable methodology for this. Given Chiltern value levels a grant free route
as per our base appraisal assumptions could also be considered. However,
with an emphasis on affordable rent (which usually produces relatively low
payment sums to developers for completed affordable homes) might
ultimately mean compromises in tenure mix on more occasions. Linked to
this, in our view the Council should not assume a continuation of little or no
grant being available in Chiltern, but should also consider how grant bids
made by its development partners could be most competitive and ensure
the “additionality” in provision which the Housing Corporation requires from
its grant allocations. Dialogue with the Housing Corporation is encouraged.
•
The study considers and gives some guidance on the likely level of
payments in lieu, should the Council and developer interest agree that to be
a more appropriate solution to on-site provision in the particular
circumstances. Our thinking is based around the cost of land which would
need to be purchased to provide the affordable homes elsewhere.
•
Other recommendations include the bringing forward of Supplementary
Planning Documents or Development Plan Documents to clearly bring to life
the more detailed aspects of this policy area, and set out the Council’s
working approach – map out the process and give as much certainty to
developers and landowners as possible. Encouragement should be given to
discussion about sites coming forward, at the earliest possible stage.
•
This type of work, revolving around an understanding of the local market,
and the policy positions ultimately selected, should be kept under review
and revisited periodically in light of the delivery and experiences which
result from those new policy positions.
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1. INTRODUCTION
1.1
Background
1.1.1
Chiltern District Council is currently developing its Local Development
Framework (LDF), referred to as the Chiltern Development Framework, in line
with the requirements of the Planning and Compulsory Purchase Act 2004.
Through a number of key policies, the LDF will guide and control the future
use and development of land. The first Development Plan Document to be
produced will be the Core Strategy, which will include the Council’s strategy
for the delivery of housing in accordance with the targets set out in the
emerging Regional Spatial Strategy for the South East. This strategy will
include the Council’s approach to the provision of affordable housing through
the planning system by the established route of requiring suitable private
developments to provide a proportion of affordable homes.
1.1.2
The Fordham Research Housing Needs Survey Update (2004) showed a
need for approximately 420 new affordable homes per annum and
recommended that a percentage requirement of up to 40% could be justified
by the Council.
1.1.3
Policy H6 of the Chiltern District Local Plan (amended 2004) requires that on
sites capable of accommodating 15 or more dwellings, 30% of them have to
be affordable.
1.1.4
However, since the introduction of this affordable housing policy, we
understand that only a small number of sites of more than 15 dwellings have
come forward and have provided affordable housing at the 30% level.
1.1.5
The Council has therefore commissioned this study to assess whether or not
it is viable to lower the threshold from 15 dwellings and/or increase the
percentage above 30%. The study needs to determine whether or not
reduced threshold levels and/or increased affordable housing proportions
would reduce economic viability to the point where development land supply
would be unduly affected.
1.1.6
Recently released Planning Policy Statement 3 (PPS3) confirms the need for
Affordable Housing policies to be considered in light of the economic viability
of land for housing in the local area (for example at its paragraph 29).
1.1.7
To this end the Council employed Adams Integra to undertake this study with
the objective of:
•
Identifying what the Council can reasonably require developers to
contribute, by way of discounted land value and/or properties, without
compromising the financial viability of the development.
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•
Identifying whether it is financially viable for developments to provide
affordable housing on sites where less than 15 dwellings are
proposed.
•
Identifying, through assessing the development economics of housing
sites of varying sizes, the likely sum of money, per unit of housing that
can be reasonably taken by the Council in-lieu of providing affordable
housing on site without the financial viability of development being
compromised.
•
Identifying what type and percentage of affordable housing can be
provided on open market housing sites of different sizes without
compromising the financially viability of the development.
•
Identifying the realistic proportion of social rented and shared equity
housing that can be viably provided on sites through open-market
housing developments of different sizes.
1.1.8
The above objectives were to be studied on the basis of development without
public subsidy and, for the purposes of this study, that all housing sites are on
previously developed land. Paragraph 29 of PPS3 confirms that the likely
availability of funding should be taken into account in such assessments. We
understand that there has been relatively little social housing grant involved in
schemes in Chiltern in recent years, and the safest assumption on future
delivery is therefore that no grant is allowed for in the appraisals.
1.1.9
Adams Integra’s report investigates and assesses the impact on land values
and viability of potentially lowering affordable housing thresholds and
increasing the proportions of affordable housing sought on private (market
sale) residential sites across Chiltern District. It also provides
recommendations to Chiltern District Council on robust but workable policy
that will ensure successful delivery of affordable housing in Chiltern District
while making sure that housing supply in the wider sense is not unduly
affected.
1.1.10 The study examines the variations in approximate development and,
therefore, land values within the District and the implications of these are
included in the assessment of site viability and delivery. The context for this is
that (gross) development value is determined by the potential and constraints
of a particular site, which in turn drive the resulting land value.
1.1.11 We have used our assessments of the impact of varying affordable housing
requirements on residual land value as our measure in putting forward to the
Council our judgements and guidelines. This means that we have compared
the impact of possible alternative policy approaches with the current policy
position. So we have we have reviewed the impact on approximate land
values of increasing the percentage of affordable housing sought and/or
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reducing the site sizes on which it is sought. We also reviewed the impact of
variations to affordable housing tenure mix. At all points of the study, the
current policy position with which we seek to make comparisons is as at 1.1.3
above.
1.1.12 This is an approach that we have used in many such studies to date and
which we believe has been validated through Local Plan Inquiry outcomes
and more recently an LDF Core Strategy Examination at Horsham District.
1.1.13 Whilst there are alternatives, such as cash-flow modelling, those tend to rely
on greater knowledge of specific schemes assumptions and can make
comparison of land value impacts more difficult. More assumptions have to be
made for this type of exercise. If some form of cash-flow modelling were
applied to our scheme assumptions it would usually tend to give slightly
higher approximate land residual values than we have arrived at.
1.1.14 In a wider sense Adams Integra have also considered whether, or how,
private residential development more generally might contribute to affordable
housing delivery through a commuted payments scheme, with smaller
schemes below the threshold for on site provision in mind. This topic is
covered in the results and conclusions sections.
1.1.15 This sets out the requirements of the study. The methodology and
assumptions used are described in Section 2, the results are discussed in
Section 3 and the key findings, recommendations and wider conclusions set
out in Sections 4 and 5. The tables, graphs and associated information
referred to throughout the report are appended to the rear of the document.
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2. METHODOLOGY and RELATED COMMENTARY
2.1
Introduction
2.1.1
In considering the factors that need to be taken into account in bringing
forward sites that include an element of affordable housing it is first necessary
to determine what effect increased rates of affordable housing provision and
reduced thresholds may have on the value of a potential residential
development site.
2.1.2
This report investigates a range of development scenarios including
affordable housing provision at 20%, 30%, 35%, 40% and 50%. Sites of 5, 10,
15, 25 and 100 units have been considered at a range of development value
points representative of the typical range of values seen within the District
(see Appendix I for the range of appraisals carried out).
2.1.3
Currently the Council seeks, as a starting point, 30% affordable housing on
qualifying sites of 15 or more dwellings. The development scenarios
summarised above, and set out at Appendix I, test development viability at
both current and potential lowered thresholds, both with potential increased
proportions of affordable housing. The outcomes of the appraisals based on
this range of scenarios provides us with a scale of results (discussed in
Section 3) from which conclusions can be drawn as to the key factors and
trends in the Chiltern locality, how these might be considered in reviewing
policy options, and recommendations made for the direction of those.
2.1.4
The schemes modelled are not actual developments, but notional schemes
chosen to reflect scenarios that best match the various potential policy
options tested. These were arrived at through discussion with the Council’s
Officers, and should reasonably reflect a range of scheme types coming
forward now and anticipated. In practice all schemes are different, but the
number of appraisals has to be controlled owing to the need to change certain
assumptions within each scenario. However, it is considered that those
selected cover a sufficient range of scenarios on which to base our
recommendations.
2.1.5
Research into residential property prices across the District, on a detailed
localised basis, was undertaken to determine realistic residential development
(property sales) values for each appraisal model (see Appendix III – Property
Prices Report). Rather than divide the District into settlement areas, it was
decided to fix a range of value points which represented the variety of typical
new build values in the District. The results of our property values research
informed these judgements. This methodology allows the results of this study
to be used independently of location and, more usefully, by approximate
development value. The range of new build value points across the District
were determined through this research and can be seen in Figure 2:
“Summary of value points and property types” in section 2.5.
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2.1.6
This process brings increased local relevance to the study and the context for
recommendations. While it is possible to carry out a comparative exercise
driven by Land Registry average values, those are not related to particular
property types. They also cover the whole re-sale market and, therefore, fail
to pick up on any differentiation between that and the local new build market
which is the supply source of this planning-led affordable housing.
2.1.7
The requirement to place an increased proportion of affordable housing on a
site will inevitably reduce the sales revenue that a developer can reasonably
expect to receive. As this reduction will not be accompanied by lower
construction costs, the offset must be taken up in either a reduced
development profit, lower land price or a combination of the two.
2.1.8
Developer’s profit and landowner’s sale price are key considerations that
must be taken into account if residential development is to be undertaken.
2.1.9
If profit levels fall below a certain point then developers will not take the risk of
developing a site, nor in many cases will funding organisations lend them the
finance to develop. Equally, if the price offered by a developer to a landowner
for a site is too low, the landowner may not sell and instead continue with, or
pursue, an existing or higher value use. There are also intangibles. For
instance, some of the smaller sites we are considering here may start out as
homes, gardens or small business premises which will not be sold unless
certain aspirations are met. Business and tax considerations, investment
values and costs, and availability and cost of replacement facilities can all
influence decisions to retain or sell sites. A mix of these factors may be
relevant in some cases.
2.1.10 Assuming that a developer will require a minimum fixed profit margin on any
given site to balance risk and obtain funding, beyond a certain point it is,
therefore, the land value that will be affected by the introduction of affordable
housing or other infrastructure requirements, provided the developer’s profit
expectations are not excessive. This follows the general principle that cost
burdens on a development are basically passed through to the land owner;
i.e. they impact on land value. In this sense, and while there can be positive
cash flow issues, affordable housing is viewed as a cost element to the
developer’s appraisals, in much the same way as other planning
infrastructure requirements (planning obligations) are.
2.1.11 Positive cash-flows from affordable housing, whilst not modelled in this
overview study, are mentioned because affordable housing sales are often
akin to “off plan” sales made quite early in the development period. This can
make a positive contribution to viability. Development Agreements are often
structured so that the RSL pays sums to the developer during construction.
Reduced marketing costs can also be relevant.
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2.1.12 Developers view the affordable housing provision as a cost because it has the
effect of reducing scheme revenue (gross development value), whatever the
subsidy level sought or financial basis applied. This revenue impact feeds its
way down through the appraisal to reduced land value – i.e. the cost is
normally passed on to the land owner.
2.1.13 To establish the potential effect of affordable housing on the supply and
development of residential sites, we have compared scheme viability based
on the application of the existing policy (30% affordable housing on sites of 15
or more) with the range of possible alternative options – i.e. 20%, 30%, 35%,
40% or 50% affordable housing requirement on thresholds of 5, 10 or 15
units.
2.2
Approximate Residual Land Value
2.2.1
In order to determine the impact of proposed affordable housing policy on a
range of site types given various value scenarios it is necessary to determine
a common indicator.
2.2.2
In normal circumstances the developer is aiming to secure a minimum
predetermined level of profit (sometimes described as a margin). Assuming a
developer has already reached the initial conclusion that, in principle, a site is
likely to be suitable and viable for development, an appraisal is then carried
out to fine tune scheme feasibility and discover what sum they can afford to
pay for the site. Some sites coming forward for development will have already
been purchased by a developer in advance of planning permission being
granted and/or have already secured planning permission based on the then
prevailing policy position. Sites are secured by a variety of means with the
completion of the purchase from the landowner taking place at varying points
depending on the detail of the particular deal. Such circumstances will have to
be dealt with case by case. However, in this study, we have assumed that
any negotiations will take place in the knowledge of the current development
climate and planning policy requirements as they could apply to a scheme
using the various scenarios we have tested for this study.
2.2.3
The simplest, most effective and widely understood way of checking site
viability in most instances is via a residual land value based model. We have
developed our own spreadsheet model for this purpose. In doing so we have
made what we feel are reasonable assumptions, but it must be noted that
individual developers will have their own variety of approaches, and a
developer might also apply a different approach from one site to another.
Generally however, the basic structure of these calculations does not vary
greatly and in our experience running a variety of models will give similar
approximate land value outcomes assuming similar inputs are made overall.
2.2.4
A highly simplified example which groups various cost elements together and
showing only the basic structure of the calculation method, is shown in outline
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below in Figure 1. This is an example only and is not to be relied upon for
calculation purposes. It demonstrates, in outline only, the key relationship
between development values and costs. This is a dynamic relationship and
determines the amount left over (hence residual) for land purchase. Broadly
speaking, as residential sales values increase (e.g. from one location to
another) but development costs remain similar, there is more scope to sustain
adequate developer’s profit levels together with, crucially, sufficient land
values to promote development. From this flows the concept that with
increased values development will begin to be able to bear the cost of
supporting infrastructure and other justified requirements, including affordable
housing, through planning obligations.
Figure 1: Simplified Example of Residual Land Value Calculation for
illustration purposes only.
Number of Units =
Sales Value =
Gross Development (sales) Value = A
(“GDV”)
10
£120,000
£1,200,000
Development Costs (build costs, fees,
etc.) = B
£575,000
Development Profit
(@15% of GDV) = C
£180,000
Costs associated with Land Purchase
and planning infrastructure obligations
(not including affordable housing
element) = D
£75,000
So, Gross Development Value
Less Development Costs
Less Profit
Less Land Purchase costs and
planning infrastructure obligations
Leaves Approximate Residual Land Value
(“RLV”) = E
A – (B + C + D) = E
2.2.5
£370,000
This general method of assessment reflects one of the main ways of how
development viability tends to be assessed and land value checked relative to
sales values and development costs. It is an established one, and just as
important is the making of sound judgements when inputting to it. Through
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our day to day and wider cross-sector work, and consultations with
developers and others in the supply chain, we have been able to verify our
experience and thoughts on components of the model, indicative output land
values, as well as the general approach. It is also now benefiting from our
previous Local Plan Inquiry, LDF examination and planning appeal
experience. No form of assessment such as this can be regarded as an exact
science due the nature of it and of the development process. There are other
methods such as cash-flow driven models and the use of comparative
information from other land deals but unless full, reliable information is
available to drive the thinking using those, more assumptions generally need
to be made. Therefore it can also be more difficult to make like for like
comparisons on land value impacts using such information and methods.
2.2.6
The model used for analysis in this instance uses a calculation that provides
an approximate residual land value, after taking into account assumed normal
costs for site development. It does not allow for any abnormal development
costs which tend to be of a site specific nature. We do not consider it helpful
in the context of sound policy targets to depress development viability
outcomes and risk prejudicing delivery against those targets based on some
form of standard abnormal cost assumption.
2.2.7
We have then added to the model the inclusion of an affordable housing
element, whereby an assumption has been made that the developer receives
a payment for a number of completed affordable homes based on
predetermined calculation (discussed later), but that is not at a level
comparable with open market values.
2.2.8
In addition, an allowance has been made in the appraisal model, for other
planning infrastructure costs. The figures used are shown in 2.8: “Other
Assumptions”.
2.2.9
The results of the modelling then show the change in approximate residual
land value or change as a percentage of approximate gross development
value. It should be noted that this modelling is based on notional sites and is
a relative exercise only - to determine the probable effect of revised
affordable housing policy. The figures arrived at relate only to the notional
schemes modelled and are the result of calculations that use assumptions
associated only with these notional scheme types. They cannot be used to
substitute actual, site specific consideration of viability, although the
methodology and starting point assumptions should aid that process. The
relative changes in results as the affordable housing criteria alter are the key
outcomes.
2.2.10 This study has involved making calculated judgements based on
development values and changes seen in land values as a result of the range
of potential planning policy positions on affordable housing. This is all in the
context of seeking to guide policy development and arrive at clear policy
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targets. It cannot be a definitive guide to how specific sites will be appraised
or how outcomes on a site specific basis will look. The aim was to set out
reasonable parameters to assist the Council review their planning policies. As
such, the report is not intended for other purposes. However, it is considered
that the approach and assumptions used here will, in a general rather than
rigid sense, be sufficiently robust to guide and inform the Council as to a
reasonable starting point for site specific consideration and related
negotiations it will need to have.
2.3
Gross Development Value
2.3.1
Gross Development Value (“GDV”) is the term used to describe the amount a
developer ultimately receives on completion or sale of a scheme whether
through open market sales alone or a combination of those and the receipt
from a RSL for completed affordable homes. Thus the developer’s profit in
each case relates to a scheme specific sum rather than to a base level of
GDV that assumes no affordable housing. It is reasonable to assume that the
developer has appraised the site and secured land in the knowledge of and
reflecting policy that will apply, i.e. is aware that receipts will be at a lower
level than prior to affordable housing policy taking effect. This can be
regarded as a reasonable approach given the long established principles
flowing from national policy guidance on the provision of affordable housing,
currently expressed by recently released PPS3.
2.3.2
As policy alters and introduces a change in affordable housing delivery rates,
there will tend to be a delay to some extent before the supply of affordable
housing increases, while previous land deals and planning consents come
forward (some of the former may not be able to support the latest policy
approach), and it is realistic to envisage a period of adjustment leading to
some sites being appraised differently. The approach we suggest of adopting
clear targets, but then being prepared to negotiate in light of site specifics
should cater for the range of scenarios that Chiltern District Council will need
to deal with.
2.3.3
Ultimately, land value is a product of a series of calculations that provides a
residual valuation based on both the specific form of development a site can
accommodate and its development costs. While the market uses a variety of
approaches to appraise sites and schemes (including comparisons between
sites) in early stages of feasibility, a more detailed approach is necessary to
understand how the value/cost relationship appears.
2.3.4
Models which study cash flow over the development lead in, build and sales
periods are also used in this context – perhaps particularly for larger, phased
developments. As mentioned above, such methods, because they take
account of income being received from sales during the build period, tend to
produce slightly higher residual land values than the traditional residual
approach, if used on comparable schemes.
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2.3.5
In this study we have looked at values and costs and, therefore, viability
outcomes, on a snapshot basis. Whilst the approach of setting and
considering a range of value points gives some appreciation of how viability
can improve with increased values, this work will need to be updated
periodically and the development cost/value relationships kept under review.
Changing wider planning infrastructure obligations could impact on the cost
side.
2.4
Developer’s Profit
2.4.1
Adams Integra’s experience of working with a range of developers leads us to
suggest that they would need to seek a fixed profit (margin) of at least 15%
(gross) of gross development value. This assumption has underpinned our
previous studies for Local Plan and LDF purposes. It is consistent with the
default of “typically around 15%” assumed in the GVA Grimley and Bespoke
Property Group Housing Corporation Economic Appraisal Tool. It was also
considered for example by the Local Plan Inspector at Portsmouth who
agreed with our contention given the mainly smaller nature of sites coming
forward in the area – as applies in Chiltern in our view. Only if the projections
reveal this fixed profit margin (as a minimum) would they pursue a site.
2.4.2
So the model inputs used for this study include a developer’s profit fixed at
15% of gross development value, which is at the lower end of the acceptable
profit range in normal circumstances. Some developers will look at alternative
profit criteria, for example a higher percentage (perhaps up to 30%) of capital
employed. We felt it appropriate to appraise the scenarios at the margins from
the developer’s perspective. Higher profit levels than those we have assumed
may well be appropriate, depending on the nature of the project and risk/
reward scenario. Different profit aspirations will also be held by different types
of house building and development companies.
2.4.3
Given our acknowledgement that a 15% profit level might not be sufficient in
some instances we have also carried out some limited sample modelling on a
scheme of 25 units only, of mixed affordable housing tenure, to check the
impact of a developer’s profit level of 20% on example results. In our view,
such a notional scheme might currently be regarded as a larger one in the
Chiltern context. This element was carried out in addition to the Council’s
brief.
2.4.4
Those outcomes are set out in Section 3 of this report (Results Analysis). This
is on the basis that that level of profit might be properly justified to the Council
by the developer in terms of risk reward and therefore form part of a scheme
specific appraisal discussion. It is not to say that we expect that level of profit
to be universally required or accepted – our experience shows that
particularly for smaller and lower risk schemes, and those carried out by
smaller more local developers (or contractor developers), the lower level may
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well be sufficient. Therefore, we do not believe it appropriate to consider that
generally development or developers’ requirements will mean that more than
15% profit should be universally assumed. We have to consider that there will
be a wide range of scheme types brought forward by an equally wide range of
parties. Once again, there are no firm rules when it comes to scheme
specifics.
2.5
Approach to values overview and Unit Values
2.5.1
In determining the basis for the use of property values assumptions to drive
the appraisals, it was decided that it would be more useful to Chiltern District
Council to define a range of “value points” rather than concentrate on the
specifics of settlement areas or centres, within which and between which
values can vary greatly in any event.
2.5.2
By taking an approach that looks at a range of value points, we are saying
that the value levels identified at each point could be found anywhere within
the District. This also fits well with the clear target approach as the foundation
for negotiations and practical application.
2.5.3
To this end, Adams Integra has reviewed the asking and subject to contract
sale prices of all available new build one and two-bed flats and two, three and
four-bed houses across the District. This work is set out at Appendix III;
Property Prices Report. It enabled us to consider whether any distinct value
patterns exist within the District, before settling on our value points approach.
It also provided us with the range of values encountered across the District for
new build property by type. The data was collected through a mixture of “on
the ground” and desktop/internet research.
2.5.4
As part of our research, we also spoke to a number of estate agents at
different locations in the District. Where little data was available at the time of
the search, the data has been verified or supplemented by using Land
Registry average figures. The study approach has been further verified
through research and discussions with land agents as to the way in which
developers price their new schemes, and through visits to, and enquiries of,
house builders’ sales offices open locally at the time of the study.
2.5.5
The results of the new build property value research led to the formation of 3
value points, covering the range within which most, what might be regarded
as typical, new build property values found in the District fall. Figure 2 shows
this range. In general terms, the new build market in Chiltern does not vary
greatly although, typically, the lowest values encountered were in parts of
Chesham whilst the highest were seen in a range of localities across the
District. Examples of higher value localities were areas of Amersham,
Chalfont St Giles, Seer Green and Penn. These statements are indications
only, and the methodology does not make any reference to them. The
Property Report found in Appendix III also shows the details of the existing
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(i.e. re-sale) housing market where greater relative differences in values
across settlements in Chiltern can be seen.
Figure 2: Summary of Value Points relating to property types:
<<<<<<<<<< Typical Value Range
>>>>>>>>>>>>>>
Unit
Type
Value
point
1-Bed Flat
2-Bed Flat
2-Bed House
3-Bed House
4-Bed House
Value Point 1
Value Point 2
Value Point 3
£147,900
£191,400
£220,400
£249,400
£292,900
£181,050
£234,300
£269,800
£305,300
£358,550
£214,200
£277,200
£319,200
£361,200
£424,200
2.5.6
The Value Points have been settled upon to cover the range of values seen
for typical new build schemes in the area. The purpose is not to assign
particular viability outcomes to specific locations, as in reality within each
settlement or other area boundary there will be a range of values, even for
similar properties, depending on matters such as size of property, quality of
design and build, proximity to key commuting nodes such as tube and
train stations, schools and other factors that determine an area’s desirability
to buyers.
2.5.7
The Value Points are intended to indicate general tones of value within the
overall Chiltern range, so that we can understand how varying policy and the
resultant range of viability outcomes might affect housing and affordable
housing delivery in various parts of the District or in various value scenarios
typically occurring within it.
2.5.8
This report does not attempt to provide comprehensive property valuation
data but rather identifies the typical range of new build values of various unit
types. The values research was not in depth market research, but was carried
out to enable us to make judgements about the range of values of new build
properties typically available in the District. The values used in the appraisals
are taken from our judgements on the range of values of varying sizes and
types of property. We believe, however, that the information used and
judgements made are reasonably representative of the values to be found
across the District.
2.5.9
Also relevant in this context is the fact that the values used here can only be
on a snapshot/current time basis and do not anticipate future property value
increases or decreases.
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2.6
Model Scenarios, Unit Types, Mix and Size
2.6.1
Chiltern District Council required a range of scenarios to be tested in order to
examine the impact of a range of possible policy options on site viability.
These are outlined in Appendix I – Development Scenarios.
2.6.2
The scheme types modelled range in size from 5 units to 100 units to allow
the study to investigate a wide range of potential policy options and
proportions of affordable housing on qualifying sites. These include a
threshold of 5 units and 10 units - to investigate the possibility of a lowered
threshold, 15 units – representing current policy, and 25 units – representing
larger schemes above the current threshold policy. 100 unit notional schemes
were also considered - to investigate the impact of the potential for future
large, Greenfield release(s) being necessary and to ensure that all likely site
types and policy options have been considered in outline as a part of this
overall scenario. Larger sites do tend to come with particular infrastructure
and other requirements, so again in practice the site specifics would need to
be considered.
2.6.3
Each of these scenarios were appraised by the application of four tenure mix
options – i.e. 100% social rented affordable units, 70% social rent and 30%
shared ownership (although that mix works on fewer combinations of site size
threshold and percentage relevant to considering the policy options set out –
so appraisals were on a sample basis), 50% social rent and 50% shared
ownership; and 100% shared ownership.
2.6.4
For completeness, and as an extension to the scope of the Brief, a nil cost
land scenario was also appraised, on a sample basis only, to judge the likely
impact of this potential policy option. In effect nil cost land usually involves an
approach whereby the developer receives reasonable build costs in return for
completed affordable units and that sum does not vary with affordable
housing tenure. This means that subsidy can be kept within the scheme to
support the affordable rented element. It also forms a sound base from which
to work with the Housing Corporation having secured a good base level of
subsidy, enabling “additionality” to be demonstrated by the improvement of
affordable housing numbers and/or tenure mix (towards affordable rented)
and/or potentially affordability or other sustainability benefits.
2.6.5
It must be remembered that in a high value area such as Chiltern, the
affordability of Shared Ownership and other similar models can be an issue.
The financial assumptions and related means of the purchasers need to be
considered early. Figure 3 below will bring to life the issues that can arise,
even on the base of reduced initial share purchases.
2.6.6
The flat sizes used in the modelling are 51sq m for one-bed and 66 sq m for
two-bed flats. We have assumed a bias towards 2 bed flats which would be a
typical market-led approach. In practice (on a smaller site in particular) a
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developer might seek a totally uniform scheme. In terms of design and cost –
the floor plates, service positions etc. need to marry up reasonably.
Therefore, a practical approach to policy application will again be necessary.
2.6.7
For two, three and four-bed houses we have used 76sq m, 86sq m and 101sq
m respectively as representative sizes. These areas, as with the flats, are
gross internal. They are thought to be reasonably representative especially of
smaller, more typical accommodation of the type likely to come forward,
within the type of schemes likely to be suitable for on site integrated
affordable housing. These unit sizes are also representative of affordable
housing requirements. We acknowledge that these 3 and 4 bed (especially)
house sizes may be small compared with some coming forward, but our
research suggests that the values for larger house types would often exceed
those we have used. Often properties will be innovatively designed and, for
example, make use of the roof space or provide more accommodation on a
similar footprint through increased heights. Thus floor areas vary dependent
on design, but again it was necessary to fix assumptions. The assumption to
use these sizes also means that build costs are reflected accordingly; it is that
value/cost relationship which is important as opposed to the unit size in
isolation.
2.6.8
These sizes are broadly consistent with the range of sizes set out in the
Housing Corporation’s latest Housing Quality Indicators which are cross
referenced from the Corporation’s latest “Design and Quality Standards”
published April 2007 following the completion of our modelling exercise. Fixed
points, not ranges of sizes, needed to be selected to allow for the like for
comparison of impacts process.
2.6.9
For details of the unit mix for each scenario see Appendix I – Development
Scenarios.
2.7
Affordable Housing Unit Transfer (to RSL) – Method of Payment
Calculation and Type of Unit Transferred
2.7.1
Discussions with Chiltern District Council indicate that payments developers
receive from Registered Social Landlords (RSLs) for the provision of
completed affordable units are currently based on a negotiation between the
parties, driven by scheme costs and what the RSL can afford to pay based on
its business planning and financial assumptions. The brief for this study also
made it clear that it was to be assumed that development would have to take
place without public subsidy in the form of Social Housing Grant (SHG).
2.7.2
The likely payment that an RSL would make for an affordable rented or
shared ownership unit within this modelling was determined through carrying
out a series of appraisals using industry standard software (in this case
known as “Proval”). Effectively, the value that could be paid to a developer for
completed affordable homes is usually related to the mortgage finance the
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RSL could raise based on the rental income stream (affordable rent) or capital
and rental income stream (shared ownership). The RSL may have access to
other sources of funding, such as its own resources or recycled capital grant
for example from stair-casing receipts, but such additional funding cannot be
regarded as the norm – it is highly scheme dependent and variable and thus
has not been factored in here.
2.7.3
The values used in the appraisals are shown below for each unit type on each
scheme and reflect the value of the affordable unit (of either tenure):
Figure 3: Summary of Proval Appraisals – RSL Payment to Developer based on
Unit Type, Value and Tenure
Rent
Value
Point
1
2
3
Value
Point
1
2
3
1 Bed Flat
£45,455
£50,440
£55,719
1 Bed Flat
£90,909
£112,609
£133,430
2 Bed
House
£56,547
£60,307
£62,619
£68,173
£69,450
£73,854
Shared Ownership
2 Bed
2 Bed Flat
House
£119,164
£138,093
£145,729
£169,557
£173,053
£201,021
2 Bed Flat
3 Bed
House
£66,759
£75,165
£78,627
4 Bed
House
£75,499
£82,468
£82,468
3 Bed
House
£155,274
£191,867
£226,482
4 Bed
House
£183,518
£226,494
£265,985
2.7.4
As explained above, appraisals were also carried out on the basis of nil cost
serviced land (serviced to the affordable housing land boundary) whereby the
developer receives reasonable build costs in return for completed affordable
units regardless of tenure. These were carried out on a sample basis only to
avoid the number of variables needing to be appraised increasing rapidly (see
Results). In our experience, a Nil Cost Land approach is increasingly used by
local planning and housing authorities to underpin affordable housing
delivery. It can be argued that such an approach creates a clear level of
subsidy required from the land owner/developer, and thus a basis for the
Housing Corporation’s “additionality” concept as covered already. Taking into
account these points, and following discussions with the Council’s Housing
Strategy and Enabling Officer, we felt it worthwhile considering alongside the
current negotiated approach discussed above, as an extension to our remit. It
is a possible approach open to the Council. PPS3 states that likely funding
availability should be taken in to account in such assessments.
2.7.5
For the nil cost land appraisals we have assumed a construction rate of
approx £1,000/sq m (gross internal floor area of development) will be
received by the developer in the case of standard house schemes, and
£1,150 in the case of flatted schemes. These rates might be greater for
example in highly specified or complex schemes; those where particular
materials or other aspects have to be specified; or for more than low rise flats.
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However, we consider it appropriate to take a fairly cautious view of factors
affecting viability. Viability would then be boosted from our positions, albeit
perhaps only marginally, by increased receipts for the affordable housing
units were an increased build cost negotiated to give the developer more
scope on a particular scheme.
2.7.6
These are indicative costs only, and they will move over time. They are base
build costs, inclusive of external works, so that in the developer type
appraisals a range of fees and costs are added to these levels. In terms of the
developer’s reimbursement for the affordable homes, however, we have not
assumed he gets the added elements back because some allowance needs
to be made for the site servicing costs he will have to bear.
2.7.7
In practice costs vary. Our intention would not be for these costs to be used in
any prescriptive way, but perhaps as an emerging benchmark which would
then need to be kept under review and update. From our day to day work we
are aware that some developers’ base costs are significantly lower than
these. Similarly, examination of certain parts of BCIS would also indicate
lower figures. In West Sussex we are aware of current work by the Valuation
Office Agency which assumes lower build cost figures than ours. Conversely,
we are also aware that RSLs may be accustomed to paying higher
construction rates. It is a case of taking a reasonable view for this overview
assessment but where necessary in site specific cases care will need to be
taken over what is assumed to be included or excluded in costs figures.
2.7.8
Through liaison with the Council’s Officers we have considered the likely
affordability of shared ownership tenure. In the Chiltern context of very high
open market property values, a traditional view of purchasers buying an initial
50% share of a property would in many cases be unsustainable. We have
assumed a 30% initial share purchase and a 2.5% per annum rent payable on
the equity retained by the RSL. Such assumptions are not untypical now in
high value property areas. In practice, initial purchase shares starting from
25% may be necessary. The reduced initial share purchase impacts on
viability because it affects the RSL’s cash-flow and means that it can afford to
pay the developer a reduced sum compared with when a higher level of initial
share purchase is assumed.
2.7.9
Developers are in some cases going to be providing affordable housing
without involving RSLs in the development process. It is a scenario more
likely to be relevant to larger schemes, but from our wider work and contact
with the Housing Corporation in our opinion looks likely to develop, given the
emphasis being placed on delivery. The free serviced land level of subsidy
could be aligned to this approach, as there is still a land input cost even
though there may be no land transfer in the same way.
2.7.10 In practice, a developer may be able to recoup a larger sum, improving site
viability marginally. However, there will be costs associated with servicing the
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affordable housing land to its boundaries and the RSL will also need to fund
its own development management costs, hence we have not allowed for the
developer receiving back the equivalent of the full design and build package
cost.
2.7.11 The modelling has been based on transferring units for affordable housing in
proportion to the number of each type within the overall scheme as far as
possible. For example, in a scheme of ten 3-bed units and five 2-bed units
with a requirement for 40% affordable housing, the affordable housing
element would be four 3-bed units and two 2-bed units. As far as is practical,
the same approach has been taken for the mixed tenure appraisals where
applicable. In reality, although the process of securing affordable housing in
this way is planning led, the basic shape of schemes will be established
through market factors. The Council will, however, need to set out its
approach and work closely with land owners and developers in the early
stages of sites coming forward, so as to legitimately shape the affordable
housing provision to meet need as far as possible.
2.7.12 We understand that the Council applies an approach to the number of
affordable homes required within a suitable scheme whereby the number of
affordable units is always rounded up from any fraction - i.e. calculations
based on the relevant proportions will be rounded up to the nearest whole unit
number. This is the approach used in carrying out the appraisals for this
study.
2.7.13 A flexible approach may be adopted to secure the priority needs affordable
rented housing in lower numbers if that becomes necessary and is
appropriate on a particular site. This ability to react for example to particular
viability issues or changing funding positions might be embodied in a
Cascade type approach to affordable housing numbers and/or tenure mix –
on the basis of a discussion with the developer led by the Council. Our
methodology does not preclude this approach.
2.7.14 It could be stated that the Council’s starting point assumption of nil grant
should narrow down the circumstances in which such a cascade mechanism
needs to be relied upon for delivery because by definition more certainty is
created as a base point. However grant, and what it can achieve (the Housing
Corporation’s “additionality” approach), should be borne in mind. Access to it
in Chiltern should not be ruled out. Many Local Authorities assume that, as a
starting point, a certain amount of grant will be available (for affordable rented
homes in particular). So it also might work in the opposite direction. If the
required grant does not become available then Authorities which adopt that
approach will adjust the affordable housing content of sites (either numbers,
tenure mix or a combination of these) by the use of a Cascade mechanism to
get back to a deliverable level of provision again.
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2.7.15 Whilst some cascade mechanisms we have seen appear to be triggered
automatically, we envisage a scenario which would be led by the Council or at
least involve it in a re-negotiation. So the purpose of the mechanism would be
to enable the affordable housing provision to be re-agreed and adjusted if
necessary, subject again to the Council’s approval; but avoiding the need to
revisit and re-draft the Section 106 agreement - which would add delay and
cost.
2.7.16 In reality each scheme will differ as it could be argued that for low cost home
ownership forms of tenure, such as Shared Ownership, provided on site, the
market value of the remaining private units might not be affected as much as
by affordable rented tenure adjacent. We have not reflected such subtleties in
our modelling as it is not possible to do so with notional sites where the
positioning of units and accesses, etc. is not known. In some sense it goes
against sustainable communities thinking to acknowledge the point, but we
think this work needs to raise awareness of market realities. These are,
however, real factors in the market which again it is suggested should be
assessed as part of a practical approach to producing development schemes
which meet wider planning objectives. We have seen landowners valuation
advice which explicitly acknowledges this. Again, site specifics will need to
be considered.
2.8
Other Assumptions
2.8.1
The appraisal model includes other variables such as fees, land buying costs,
finance, agency costs and planning infrastructure provision that are all taken
into account when calculating an approximate land residual value.
2.8.2
As will be seen from the notes accompanying the list below, these figures in
some instances are factors of other elements of the appraisal and therefore
vary by site size and type. For example, certain fees in the calculations are
percentages of sales values and, therefore, as sales values change, so will
the related fees. In practice each site and developer approach would vary and
it is appreciated that the figures used here will not always be appropriate; site
specifics will prevail. However, crucially for this exercise this appraisal model
enables a comparison to be drawn across sites on a ‘like for like’ basis so that
it is the impact of changing affordable housing policy which is highlighted.
2.8.3
The percentages and values assumed for the purposes of this exercise are
listed below and are the result of Adams Integra’s current day to day
experience, work with and discussions with developers, housing associations,
Local Authorities, and regular contact with the Housing Corporation, valuers,
agents and others:
•
Base Build Costs (House Schemes) – £1,000/sq m
•
Base Build Costs (Flatted Schemes) - £1,150/sq m
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Chiltern District Council - Affordable Housing Development Economics Study
The above are applied to the Gross Internal Area (GIA) of the
accommodation. Base costs for flats are likely to be higher than for a
scheme of houses particularly for small flatted schemes where sites
are small and often difficult to work on (storage, craning etc). Common
areas have to be allowed for, as does the degree of repetition of costly
elements. Cash-flows can also be less favourable with flats as rolling
sales are more difficult to deliver – i.e. it is not as easy to phase the
sales during ongoing construction in flatted developments when
compared to housing as often the entire building or significant sections
of it needs to be completed before any one part of it can be occupied.
The sales tend to be in blocks rather than through a more gradual
release. We are envisaging standard low rise flats here (typically no
more than 3/4 storeys). Again costs do vary, but lower rise flats are
thought to be more typical of what comes forward in Chiltern District.
Build cost figures have been taken as an indicative base level,
supported by our discussions with developers and verified through
research of BCIS (Building Cost Information Service) data.
Typical scheme specific additions to these are:
•
Architect Fees
3.5% of build costs
•
Consultants Fees
(e.g. engineer, planning supervisor,
project manager)
3.0% of build costs
•
Contingencies
3.0% of build costs
•
Insurances
2.5% of build costs
•
Marketing and Sales Fees 1.5% of Estimated Gross Sales Value.
There will be instances, dependant on
the location and scheme type, where
some of this expense, or an additional
sum will be directed to the setting up of a
show home. This will, however, not be
appropriate on all schemes hence we
have not included for it as a standard
assumption item. We would not expect it
to alter the outcomes fundamentally.
•
Legal Fees on Sale
£400 per unit
•
Finance (build)
6.5% APR on above costs over build
period. At the time of our calculations
base rates appeared to be on a
potentially rising trend to some extent,
so with time this – as with all other
elements – might need to be reviewed.
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Results would not be materially
affected with the types of changes seen
recently, and there will be balancing
factors to the costs side – for instance
through current property prices trends.
Our assumptions have to be fixed and
appraisals carried out at a specific point
in time.
•
Build Period
9 months for 5 to 15 unit schemes; 12
months for 20 and 25 unit schemes and
24 months for 100 unit schemes
•
Land Survey Costs
£3,000 per site for a 5 unit scheme;
£4,000 for 10 unit schemes; £5,000 per
site for the 15 unit scheme; £10,000 per
site for a 20 units scheme; £15,000 for a
25 units scheme and £50,000 for a 100
unit scheme including basic ground
conditions research (on larger schemes
especially there will usually also be
additional cost associated with transport,
Environmental/landscape, ecology etc
dependant on the scheme and not
covered here).
•
Legal Fees on Land Purchase 0.5% of land value (this will often
produce a low figure (when looking at
very small or low value sites) but only
make a minimal difference to outcome.
•
Planning Application costs £265 per dwelling where the number of
dwellings is 50 or fewer, where the
number of dwellings exceeds 50, an
additional £80 for each extra dwelling,
subject to a maximum total fee of
£50,000
•
Stamp Duty Land Tax
•
Infrastructure Payments £4,000 per unit (applied in all cases,
regardless of site specifics) as agreed with Chiltern District Council.
Between 0% and 4% depending on
residual land value.
Please note that these are the figures used in the appraisals but are
not necessarily representative across all new residential developments
as each site will need to be assessed on its own merits. The same key
points apply here as to those mentioned in the context of abnormal
costs above.
•
Finance related to land purchase 6.5% APR on land survey,
planning costs, legal fees on land purchase and residual land value
over build time plus 26 weeks. No finance arrangement or related fees
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have been included for the purposes of this exercise. They might in
practice be applicable, but we would not expect them to alter the
viability equation fundamentally. Scheme funding arrangements will
vary greatly, dependant again in the type of developer and scheme.
As with much of this exercise, this is a snapshot and there are varying
views as to what future lending rate and other trends will hold. At the
time of writing, interest rates have risen marginally with a bank base
rate (May 07) of 5.5%, with the latest adjustment unavoidably coming
after our appraisals. This does not materially affect outcomes, but
demonstrates the need to keep this type of work under review over the
longer term.
•
2.8.4
Over time we would need to see how added costs in general balanced
against the trend of future sales values.
As this is a relative exercise aimed at determining the likely impact of a
range of potential policy options, the most important factor is
consistency between assumptions used for modelling scenarios. As we
point out, specific assumptions and values for our notional schemes
may not be appropriate for any particular actual development. We are
confident however that our assumptions are reasonable in terms of
making this viability overview and thus in the context of the Council
considering clear policy targets to underpin a negotiated approach.
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3. RESULTS ANAYLSIS
3.1
Introduction
3.1.1
The results of our modelling are shown in Appendix II.
3.1.2
Tables 1, 2 and 3 in Appendix II show a summary of the Residual Land Value
(RLV) appraisals in “Value (£)”, “Percentage of Gross Development Value (%
of GDV)”, and “Reduction in Residual Land Value (%)” for Value Points 1 – 3
respectively, across each development scenario (from a 5 unit scheme to a
100 unit scheme) and at each tenure variation.
3.1.3
This information is also represented graphically. Graphs 1 to 27 in Appendix II
show the Residual Land Values (£) across all Value Points, development
scenarios and tenure variations. Graphs 1a to 27a show the RLVs as a
percentage of GDV. Graphs 1b to 27b show the approximate reduction in
residual land values as a result of testing a range of potential future policy
options.
3.1.4
Table 4 highlights the key trends in the summary of RLV as a percentage of
GDV (discussed below). Table 5 shows the results of sample appraisals
carried out on the basis of nil cost land developer subsidy.
3.1.5
Figure 4 below provides a quick summary of the information to be found in
Appendix II.
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Figure 4: Summary of Tables and Graphs Relationship from Appendix II
Table 1: Value Point 1 Scheme & Appraisal Types, Residual Land Value, RLV as % of GDV and
Percentage Reduction in Residual Land Value from existing Adopted Policy Position
Graph No.
1a
1b
4
4a
4b
7
7a
7b
10
10a
10b
13
13a
13b
16
16a
16b
19
19a
19b
22
22a
22b
25
25a
25b
Graph Title
5 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
5 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options – Value Point 1
10 Unit Housing Scheme - Residual Land Values at Potential Policy Options – Value
Point 1
10 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
10 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options – Value Point 1
15 Unit Housing Scheme - Residual Land Values at Potential Policy Options – Value
point 1
15 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
15 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options – Value Point 1
20 Unit Flatted Scheme - Residual Land Values at Potential Policy Options – Value Point 1
20 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
20 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options – Value Point 1
20 Unit Housing Scheme - Residual Land Values at Potential Policy Options – Value
Point 1
20 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
20 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options – Value Point 1
25 Unit Flatted Scheme - Residual Land Values at Potential Policy Options – Value Point 1
25 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
25 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options – Value Point 1
25 Unit Housing Scheme - Residual Land Values at Potential Policy Options – Value
Point 1
25 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
25 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options – Value Point 1
25 Unit Mixed Scheme - Residual Land Values at Potential Policy Options – Value Point 1
25 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
25 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options – Value Point 1
100 Unit Mixed Scheme - Residual Land Values at Potential Policy Options – Value Point 1
100 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options – Value Point 1
100 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options – Value Point 1
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Figure 4 (Cont’d): Summary of Tables and Graphs Relationship from Appendix II
Table 2: Value Point 2 Scheme & Appraisal Types, Residual Land Value, RLV as % of GDV and
Percentage Reduction in Residual Land Value from Adopted Policy Position
Graph No.
2
2a
2b
5
5a
5b
8
8a
8b
11
11a
11b
14
14a
14b
17
17a
17b
20
20a
20b
23
23a
23b
26
26a
26b
Graph Title
5 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Value Point 2
5 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
5 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 2
10 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 2
10 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
10 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Value Point 2
15 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 2
15 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
15 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Value Point 2
20 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Value Point 2
20 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
20 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 2
20 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 2
20 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
20 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Value Point 2
25 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Value Point 2
25 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
25 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 2
25 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 2
25 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
25 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Value Point 2
25 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Value Point 2
25 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
25 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 2
100 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Value Point 2
100 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 2
100 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 2
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Figure 4 (Cont’d): Summary of Tables and Graphs Relationship from Appendix II
Table 3: Value Point 3 Scheme & Appraisal Types, Residual Land Value, RLV as % of GDV and
Percentage Reduction in Residual Land Value from Adopted Policy Position
Graph No.
3
Graph Title
5 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Value Point 3
5 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
3a
Options - Value Point 3
5 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to Range
3b
of Potential Policy Options - Value Point 3
6
10 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 3
10 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
6a
Options - Value Point 3
10 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
6b
Range of Potential Policy Options - Value Point 3
9
15 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 3
15 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
9a
Options - Value Point 3
15 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
9b
Range of Potential Policy Options - Value Point 3
12
20 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Value Point 3
20 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
12a
Options - Value Point 3
20 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to Range
12b
of Potential Policy Options - Value Point 3
15
20 Unit Housing Scheme - Residual Land Values at Potential Policy Options -Value Point 3
20 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
15a
Options - Value Point 3
20 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
15b
Range of Potential Policy Options - Value Point 3
18
25 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Value Point 3
25 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
18a
Options - Value Point 3
25 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to Range
18b
of Potential Policy Options - Value Point 3
21
25 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Value Point
3
21a
25 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 3
21b
25 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Value Point 3
24
25 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Value Point 3
24a
25 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 3
24b
25 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 3
27
100 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Value Point 3
27a
100 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Value Point 3
27b
100 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Value Point 3
Table 4: Summary of Land Residual Value (as % of GDV) Appraisals for All Value Points - Trends
Table 5: Sample Appraisals showing Residual Land Values and RLV as Percentage of GDV Based on
Nil Cost Land Mechanism of Affordable Housing Provision
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3.1.6
It is worth reiterating here that as the approach to modelling has involved the
use of Value Points rather than specific settlements, these results will apply to
all settlements or locations that fit into the Value Points. So, if we talk about
Value Point 3 for example, this means all schemes that either come from
locations in that Value Point, or schemes that have a value that fit into the
Value Point 3 profile, no matter where they are located. This comes back to
the discussion earlier where we emphasise that land value can vary down to
street level.
3.2
Reduction in Land Residual in Schemes Below Current
Threshold - Value Points 1 to 3 (Tables 1 - 3), Graphs 1b to 27b
3.2.1
As part of this study, we appraised schemes below the current Chiltern
District Local Plan adopted affordable housing policy threshold of 15 units. On
these sites previously there would have been a zero affordable housing
requirement.
3.2.2
As expected, analysis of the results indicates that introducing a requirement
for the provision of an element of affordable housing on any of the scenarios
modelled (notional schemes involving 5 and 10 dwellings were modelled)
leads to a reduction in residual land value across the entire range of Value
Points and scheme types compared to the existing adopted policy approach
where currently no affordable housing provision is required on sites below the
15 unit threshold.
3.2.3
On newly qualifying sites involving 5 units, across Value Points 1 to 3, our
modelling indicates that the introduction of a 20% requirement for the
provision of affordable housing would have the effect of reducing RLVs by
between approximately 31.8% in Value Point 1 to 25.5% in Value Point 3 for a
scheme with 100% affordable rented units when compared to the Council’s
current policy position.
15 unit
Figure 5: Extract of Results from Table 1 & 3 – 5 Unit Schemes: Scheme and Appraisal
Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual
Land Value from Adopted Policy Position (Value points 1 & 3)
Appraisal Type
0% Affordable
20%
Affordable,
100% Rent
20%
Affordable, SO
5 Units - Housing Scheme: Value
Point 1
Reduction in
RLV as
RLV from
% of
RLV
Current
GDV
Policy
Position
5 Units - Housing Scheme: Value
Point 3
Reduction in
RLV as
RLV from
% of
RLV
Current
GDV
Policy
Position
£424,947
35.7%
N/A
£810,969
47.1%
N/A
£289,776
28.8%
31.8%
£603,995
42.0%
25.5%
£375,048
33.4%
11.7%
£712,293
44.9%
12.2%
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3.2.4
In the same scheme but substituting affordable rented units for Shared
Ownership (SO) units, there is a reduction in RLV of between 11.7% and
12.2% from value points 1 to 3 respectively. As the affordable requirement in
this scenario is only for a single unit (20% of 5 units), a mix of affordable rent
and Shared Ownership cannot be appraised.
3.2.5
The above results on a 5 unit scheme show the difference that occurs
between different forms of tenure for the affordable element. The Shared
Ownership form of tenure helps to achieve a higher Residual Land Value than
affordable rented and as such shows a smaller reduction in RLV caused by
the introduction of a policy requirement for the provision of affordable housing
on newly qualifying sites. (This pattern is repeated across all scheme types
appraised from 5 units to 100 unit schemes).
3.2.6
On a 10 unit scheme, the impact of introducing both a 20% and a 30%
affordable housing requirement on qualifying sites has been investigated.
Figure 6 below shows an extract from Tables 1 and 3 indicating the RLV, RLV
as a percentage of GDV and the reduction in RLV from the application of the
current policy position.
Figure 6: Extract of Results from Table 1 & 3 – 10 Unit Schemes: Scheme and
Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage
Reduction in Residual Land Value from Adopted Policy Position
(Value Points 1 & 3)
10 Units -Housing Scheme: Value
Point 1
RLV
RLV as
% of
GDV
Reduction in
RLV from
Current
Policy
Position
£841,292
35.8%
N/A
£1,612,575
47.4%
N/A
£590,253
29.4%
29.8%
£1,225,894
42.7%
24.0%
£712,062
32.8%
15.4%
£1,427,337
45.3%
11.5%
£647,228
31.1%
23.1%
£1,319,039
43.9%
18.2%
£461,230
25.3%
45.2%
£1,018,920
39.3%
36.8%
£651,775
31.2%
22.5%
£1,340,776
44.2%
16.9%
£513,450
27.0%
39.0%
£1,112,065
40.9%
31.0%
Appraisal Type
0% Affordable
20% Affordable,
100% Rent
20% Affordable,
SO
20% Affordable,
50% SO/50%
Rent
30% Affordable,
100% Rent
30% Affordable,
SO
30% Affordable,
50% SO/50%
Rent
10 Units - Housing Scheme: Value
Point 3
Reduction
in RLV
RLV as
from
RLV
% of
Current
GDV
Policy
Position
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3.2.7
A comparison of the reduction in residual land values for a 10 unit scheme
across value points 1 to 3 resulting from a policy of 20% affordable housing
on newly qualifying sites indicates a reduction in RLV of between
approximately 29.8% at point 1 to 24.0% at point 3 for a scheme with 100%
affordable rented units.
3.2.8
In the same scheme but substituting affordable rented units for Shared
Ownership (SO) units, there is a reduction in RLV of between 15.4% and
11.5% from points 1 to 3 respectively. For a scheme that contains a mix of
affordable rented and Shared Ownership, there is reduction in RLV from point
1 to point 3 of 23.1% and 18.2% respectively.
3.2.9
This pattern is repeated for the 30% affordable housing appraisals but here
we see a slightly greater reduction in RLV. For example, at point 1, where the
affordable element of the scheme is 100% affordable rented, the reduction in
RLV is 45.2% as compared to 29.8% when there is only a requirement for
20% affordable housing This compares to 36.8% reduction in RLV in the
equivalent point 3 scheme of the same type.
3.2.10 The patterns emerging from the results show, as expected, a greater
reduction in RLV as the percentage of affordable housing increases. The
greatest reductions are seen at the lowest value points, from the highest
affordable housing percentages and where the affordable housing element is
of a rented tenure. We are also seeing relatively large reductions in RLV for
both 5 and 10 unit schemes as an affordable housing element is introduced
on newly qualifying sites.
3.3
Reduction in Residual Land Value in Schemes at or Above Current 15
unit Threshold - Value Points 1 to 3 (Tables 1 - 3), Graphs 1b to 27b
3.3.1
For 15, 20, 25 and 100 unit schemes, the Council’s current policy approach
would require the provision of 30% affordable housing and this has been used
as the base point from which to investigate the impact of increasing affordable
housing provision on qualifying sites. For 15 and 20 unit schemes an increase
to 35% and 40% affordable housing (range of tenures as before) was
investigated. For 25 and 100 unit schemes 50% affordable housing was also
explored.
3.3.2
By way of example, Figure 7 below shows an extract from Tables 1 and 3 in
Appendix II indicating the RLV, RLV as a percentage of GDV and the reduction
in RLV for a 15 unit housing scheme compared to the application of the current
policy position.
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Figure 7: Extract of Results from Table 1 & 3 – 15 Unit Schemes: Scheme and
Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage
Reduction in Residual Land Value from Adopted Policy Position
(Value Points 1 & 3)
15 Units -Housing Scheme:
Point 1
Appraisal
Type
30%
Affordable,
100% Rent
30%
Affordable,
100% SO
30%
Affordable,
50% SO/
50% Rent
35%
Affordable,
100% Rent
35%
Affordable,
100% SO
35%
Affordable,
50% SO/
50% Rent
40%
Affordable,
100% Rent
40%
Affordable,
100% SO
40%
Affordable,
50% SO/
50% Rent
3.3.3
15 Units - Housing Scheme:
Point 3
Reduction
in RLV
RLV as
from
RLV
% of
Current
GDV
Policy
Position
RLV
RLV as
% of
GDV
Reduction in
RLV from
Current
Policy
Position
£659,684
24.2%
N/A
£1,495,934
38.7%
N/A
£968,136
30.7%
N/A
1,288
43.9%
N/A
£773,634
26.8%
N/A
£1,682,224
40.8%
N/A
£525,906
20.7%
20.3%
£1,288,960
35.9%
13.8%
£899,192
29.4%
7.1%
£1,908,443
43.1%
4.9%
£639,857
23.7%
17.3%
£1,475,250
38.4%
12.3%
£525,906
20.7%
20.3%
£1,288,960
35.9%
13.8%
£899,192
29.4%
7.1%
£1,908,443
43.1%
4.9%
£639,857
23.7%
17.3%
£1,475,250
38.4%
12.3%
Please note that on 15 unit schemes there is no difference between 35% and
40% affordable housing. This is due to the fact that when rounding issues
have been considered, the number of affordable units remains the same (i.e.
35% of 15 equates to 5.25 and 40% of 15 equates to 6 – both rounded up to
6 units as per the Council’s policy).
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3.3.4
Tables 1, 2 and 3 in Appendix II and the extract shown above in Figure 7
show the relatively low reduction in residual land value as the affordable
housing requirement increases from 30% to 35%. At Point 1, the reduction is
slightly greater than at Point 3 and demonstrates the same patterns as
previously discussed (across changes to tenure and from Point 1 to Point 3).
As the affordable housing requirement increases from 30% to 40% there is no
further reduction due to the rounding policy discussed.
3.3.5
The patterns found remain relatively constant with increases to the scheme
size. On 25 unit and 100 unit schemes, a 50% affordable housing
requirement has been investigated and again here we see a slightly greater
reduction in RLV over 40% and 35% requirements. Figure 8 below shows an
extract of the results from Tables 1 & 3 – 25 Unit Housing Schemes and
includes data on 50% affordable housing.
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3.3.6
Figure 8: Extract of Results from Table 1 & 3 – 25 Unit Schemes: Scheme and
Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage
Reduction in Residual Land Value from Adopted Policy Position
(Value Points 1 & 3)
25 Units -Housing Scheme:
Point 1
Appraisal
Type
30%
Affordable,
100% Rent
30%
Affordable,
100% SO
30%
Affordable,
50% SO /
50% Rent
35%
Affordable,
100% Rent
35%
Affordable,
100% SO
35%
Affordable,
50% SO /
50% Rent
40%
Affordable,
100% Rent
40%
Affordable,
100% SO
40%
Affordable,
50% SO /
50% Rent
50%
Affordable,
100% Rent
50%
Affordable,
100% SO
25 Units - Housing Scheme:
Point 3
Reduction
in RLV
RLV as
from
RLV
% of
Current
GDV
Policy
Position
RLV
RLV as
% of
GDV
Reduction in
RLV from
Current
Policy
Position
£1,157,915
23.9%
N/A
£2,607,653
38.1%
N/A
£1,746,275
30.9%
N/A
£3,480,176
43.2%
N/A
£1,418,951
27.3%
N/A
£3,043,915
40.8%
N/A
£1,026,516
22.1%
11.3%
£2,404,360
36.6%
7.8%
£1,688,833
30.3%
3.3%
£3,383,255
42.7%
2.8%
£1,287,553
25.7%
9.3%
£2,840,622
39.6%
6.7%
£911,340
20.3%
21.3%
£2,227,849
35.2%
14.6%
£1,629,619
29.7%
6.7%
£3,298,233
42.2%
5.2%
£1,230,731
24.9%
13.3%
£2,763,949
39.0%
9.2%
£623,535
15.2%
46.2%
£1,778,702
31.2%
31.8%
£1,506,076
28.3%
13.8%
£3,087,487
41.1%
11.3%
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3.3.7
The reduction in RLV results discussed above and shown in Appendix II
provide us with an idea of the impact of increased affordable housing
provision on development economics of residential development by looking at
the reduction in land value. The main influencing factors are the tenure mix
and, more obviously, the percentage of affordable housing. The impact of the
increased percentage of affordable housing on development economics is
reduced somewhat by including a shared ownership form of tenure. At 100%
shared ownership, the scheme fares far better than with 100% affordable
rented accommodation. The 50/50 split of shared ownership to affordable
rented gives results between the two.
3.3.8
We can see that the reduction in RLV was found to be less when we
compared a larger scheme above the current threshold (and where the
affordable housing element is increased from 30% to 35%, 40% or 50%) with
a smaller scheme below the current threshold (where, for example, the
requirement for 20% provision is introduced) as shown above in Figures 5, 6,
7 and 8. This confirms the general indication that the sharpest policy impacts
are on small sites below the current threshold of 15 units, as opposed to sites
which due to their size and capacity, already trigger the application of existing
policy but where an increased proportion is applied under policy options.
3.4
RLV as Percentage of GDV in Schemes Below Current Threshold –
Value Points 1 to 3 (Tables 1 to 3, Graphs 1 and 1a to 27 and 27a)
3.4.1
In section 3.3 we have highlighted the impact of affordable housing on site
viability by looking at the overall reduction in approximate residual land value.
However, it is also relevant to review the approximate land residual figures
produced (in monetary terms) and compare these across the range of
proportion and threshold levels considered.
3.4.2
The figures arrived at relate only to the notional schemes modelled and are
the result of calculations that use assumptions associated only with these
notional scheme types. They cannot be used to substitute for appraisal
figures generated for an actual site. The relative changes in results as the
affordable housing criteria alter are the key outcomes. What we also aim to
do is get a general feel for the amounts of money likely to be available to
landowners, to help assess to what extent they might be incentivised to sell.
3.4.3
In terms of the notional RLV remaining for a 5 unit scheme at Point 1 (see
Figure 5 above and Table 1 in Appendix II), the notional land residual lowers
from £424,947 to £375,048 (or from 35.7% of GDV to 33.4% of GDV) as a
result of applying a 20% affordable housing policy with a 100% shared
ownership affordable tenure mix from an original starting position of zero
affordable housing provision. This reduces to £289,776 or 28.8% of GDV if
the affordable housing is rented accommodation rather than shared
ownership.
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3.4.4
At Point 3 (Figure 5 above and Table 3 in Appendix II), the RLV reduces from
£810,969 (or 47.1% of GDV) through £712,293 (or 44.9% of GDV) with
shared ownership affordable units to £603,995 (or 42.0% of GDV with 100%
rented affordable units. The higher figures here are linked to the higher sales
values in Value Point 3.
3.5
Reduction in Land Residual in Schemes at or Below Current Threshold –
Value Points 1 to 3 (Tables 1 to 3, Graphs 1 and 1a to 27 and 27a)
3.5.1
For a Value Point 1, 15 unit housing scheme (Figure 7 and Table 1) the
notional land residual reduces from a maximum of £968,136 (30.7% of GDV)
for a starting position of 30% affordable housing with 100% shared ownership
affordable units to a minimum of £525,906 (20.7% of GDV) if 35% or 40%
affordable housing with the affordable units required as rented
accommodation.
3.5.2
At Point 3, the same scenario shows £2,007,119 (or 43.9% of GDV) for a
starting position of 30% affordable housing with 100% shared ownership
affordable units reducing to £1,288,960 (35.9% of GDV) if 35% or 40%
affordable housing with the affordable units required as rented
accommodation.
3.5.3
Again it is possible to see the same trends emerging across all scheme types
whereby RLV reduces as a result of a combination of increased proportions of
affordable housing, changes in tenure mix from 100% shared ownership to
100% rented accommodation and decrease in sales and therefore
development and residual land values from Point 3 to Point 1.
3.6
70% affordable rent/30% shared ownership tenure mix comparison
appraisals.
3.6.1
Table 6 within Appendix II shows the results from sample appraisals carried
out on this tenure mix, as referred to at 2.6.3. Unsurprisingly, the results are
intermediate ones, between those from 100% affordable rented tenure and
the 50/50 tenure mix assumption. These appraisals were carried out to
more closely reflect the housing need scenario in Chiltern and also the South
East Plan (draft) position. The outcomes helped to underpin the points made
in sections 4 and 5.
3.7
Nil Cost Serviced Land Sample Appraisals
3.7.1
A sample of appraisals was carried out to determine the likely impact on
financial viability of this form of developer subsidy as compared to the
alternative approach discussed throughout this report (whereby the value of
an affordable unit is determined by the mortgage supportable by an RSL or
similar based on the rental stream and/or capital value of a share of the
unit). The nil cost serviced land model assumes that the developer receives
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(from the RSL, for example) a capital receipt to cover reasonable build costs
in return for completed units (regardless of tenure). The tenure alters based
on the level of public subsidy available, i.e. with little or no grant it is likely that
an increase in the more financially sustainable shared ownership or other
forms of tenure will be required; with significant public subsidy the opposite
may be true.
3.7.2
The results of the appraisals carried out are shown in Table 5 and an
example of the results compared to an equivalent appraisal based on the
mortgage funded by rental stream approach is shown in Figure 9 below:
Figure 9: Extract and Comparison of Nil Cost Land Results Compared to
Mortgage Funded By Rental Stream Approach
Appraisal
Type
25 Units - Mixed Scheme: 40% Affordable – Residual Land
Value
50% SO / 50%
Nil Cost Land
100% SO
100% Rent
Rent
Point 1
£775,013
£1,180,295
£906,874
£645,800
Point 2
£1,287,072
£1,915,879
£1,555,436
£1,210,058
Point 3
£1,799,130
£2,646,776
£2,193,472
£1,758,795
Appraisal
Type
25 Units - Mixed Scheme: 40% Affordable – RLV as Percentage
of GDV
50% SO / 50%
Nil Cost Land
100% SO
100% Rent
Rent
Point 1
19.6%
26.1%
21.9%
17.1%
Point 2
27.6%
34.6%
30.8%
26.5%
Point 3
33.4%
40.3%
37.0%
33.0%
3.7.3
As can be seen from Figure 9 above, the impact of a nil cost land scenario on
this scheme example is slightly less than that for 100% rented affordable
accommodation. In other words, the value of the affordable units in the 100%
rented appraisal is less than a developer would receive for a return on just his
build costs for those units (nil cost land appraisal) – i.e. £645,800 compared
to £775,013. However, a better return (and thus higher RLV) is seen on mixed
tenure schemes or schemes comprising of 100% shared ownership units for
the affordable element. This is seen across all scenarios and Value Points.
3.8
20% Developer’s Profit
3.8.1
As mentioned at 2.4.3 of this report, viability has also been investigated on a
small sample of scenarios using 20% developers profit in place of 15%. This
has been carried out on a 25 unit mixed scheme with a 50% shared
ownership/50% rent tenure mix at value point 1 only, at which point the
greatest impact of an increased profit level would be seen on scheme
viability.
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3.8.2
This comparison allows us to investigate the additional impact of increased
profit requirements that may be more likely on larger schemes as a result, for
example, of increased risk in bringing larger, longer term or more complex
sites forward for development. As expected, the same trends discussed in
sections 3.2 to 3.7 are seen, whereby the lower the development values, the
greater the additional impact on scheme viability. There will be schemes that
the Council needs to consider in this context, in negotiations.
3.8.3
Figure 10 below shows the comparison where the only change made was to
the developer’s profit level.
Figure 10: Comparison of Appraisal Results at 15% and 20% Developer’s Profit
(Value Point 1)
25 Units - Mixed Scheme, 50% SO / 50% Rent
Appraisal
Type
30%
Affordable
35%
Affordable
40%
Affordable
50%
Affordable
RLV – 15%
Profit
RLV – 20%
Profit
RLV as % of
GDV – 15%
Profit
RLV as % of
GDV – 20%
Profit
£1,071,609
£883,345
24.5%
20.2%
£997,907
£814,056
23.4%
19.1%
£906,874
£728,474
21.9%
17.6%
£642,558
£484,985
17.0%
12.9%
3.8.4
Looking at the comparisons above in Figure 10, it is clear to see that there is
a drop of approximately 4% in the RLV as a percentage of GDV regardless of
overall affordable housing percentage between the 15% and 20% developer
profit scenarios tested.
3.8.5
The result of an increase in developer’s profit from 15% to 20% would be
further reductions in the residual land values across the range of
approximately 18% and 25%. As the percentage of affordable housing
increases the impact of an increased developer’s profit on scheme viability
becomes greater as the residual land value reduces; there are more burdens
on the development revenue in simple terms. This serves to highlight the
need for careful consideration and negotiation of schemes.
3.8.6
Our modelling indicates that the higher value schemes/Value Point locations
are more likely to be able to support an increased affordable housing content
more often than not. The sums which remain available for land purchase on
this basis are still significant.
3.8.7
The main trend we are looking at is the scale of reduction in those flowing
from a range of alternative policy scenarios. Whether a specific site comes
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forward for residential development will hinge on the wide range of factors
discussed in this report, not least any competing land use value.
3.9 Viability Study Trends
3.9.1
Due to potential existing and alternative use values of schemes and owners’
circumstances combined with the specific characteristics of sites, it is
impossible to provide the Council with definitive “cut-off” points where viability
will be compromised to the degree that development may not take place.
However, it is possible to provide likely outcomes at varying levels as studied.
3.9.2
By way of an example, a residual calculation that provides an output of zero
value (or 0% of GDV) after the application of an affordable housing policy
means, obviously, that development on this site would be compromised
regardless of wider assumptions. Conversely, on a site where the residual
land value approaches 40% of GDV after the application of affordable
housing policy it is likely (although not definitive) that land values are high
enough to absorb the costs of providing for affordable housing.
3.9.3
We have, therefore, provided in Table 4 (Appendix II) a guide to likely
outcomes by colour coding the land residuals as a percentage of GDV. In this
table, we have taken the following notional cut-off points and indicated
possible outcomes of those land residual results. The matrix of results is
based on the notional scheme types appraised and already described. The
cut-off points are grouped into four sets based on levels of RLV as a
percentage of GDV. The references to ‘Good’, ‘Poor’ etc are for general
indication purposes only as definitive cut off points are impossible to predict.
They are used to help guide the Council to understand what the outcomes of
the modelling mean overall – i.e. to highlight the trends found. The aim is to
demonstrate in general terms at what Value Point levels the various policy
option points might become more or less workable.
3.9.4
The following divisions have been made with an explanation of the
significance of each:
•
Green = ‘Good’: “RLV as % of GDV” greater than 30% - At this point, land
values after policy application are very likely to be able to support
affordable housing policy with the least negotiation and least compromise.
•
Yellow = ‘Average’: “RLV as % of GDV” 20% - 30% - At this point, land
values after policy application likely to support affordable housing policy
with reduced negotiation and major compromise only required in certain
circumstances (for example with significant abnormal site costs or
collective infrastructure burden).
•
Orange = ‘Poor’: “RLV as % of GDV” 10% - 20% - Transitional zone, at
this point land values (certainly at the bottom end) will not always be high
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enough after the application of affordable housing policy to support the
requirements. Negotiation is likely to be required more often than not.
•
Red = ‘Very Poor’: “RLV as % of GDV” <10% - Land values after policy
application are unlikely to support affordable housing policy. Compromise
and negotiation on the level of affordable housing will be required on most
sites.
3.9.5
Using Table 4 (in Appendix II) it is possible to see that for a majority of
schemes at all Value Points at 20%, 30%, 35%, 40% or 50% (at higher value
points) affordable housing and across all tenures, the viability of schemes
using our approximate divisions (rough guide) are either ‘Good’ or ‘Average’.
In summary, this rough guide shows more positive land value and, therefore,
viability results than we have encountered in almost all other Local Authority
areas we have studied.
3.9.6
The exceptions to this positive message come at Point 1 on 20 and 25 unit
flatted schemes and 25 and 100 unit mixed schemes where we see some
forms of tenure providing ‘Poor’ or, exceptionally, ‘Very Poor’ results. At 50%
Affordable rented housing we also see results creeping into ‘Poor’ in Value
Point 2.
3.9.7
It should be noted that for flatted schemes of a comparable number of units to
a housing scheme (20 and 25 unit schemes) will tend to look worse in viability
terms through resulting lower land values. Flatted site approximate land
values will look low if flatted sites of equal numbers of units to housing sites
are compared. This is largely because of the land take requirements – flatted
schemes are generally at higher densities. A greatly increased number of flats
will normally be accommodated on a similar land area, with densities tending
to be around twice, or perhaps significantly more, than for housing or even
mixed unit type schemes.
3.9.8
Overall, some poorer results within the overall trend need not detract from
supporting an overall target approach to affordable housing – they do not in
our view justify and over-complicated approach to policy positions which
might move away from a uniform approach applied District-wide.
3.10
Collection of Payments in Lieu
3.10.1 As requested in the Council’s Brief, we considered the impact from, and role
of, payments in lieu of on site affordable housing. These sub-sections will
cover this topic in outline.
3.10.2 Policy development should include this aspect so as to make clear to land
owners and developers how the Council would apply its approach, and on
what basis calculations would be made. PPS3 (paragraph 29) makes it clear
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that such payments should be of a ‘broadly equivalent value’ to an on site
affordable housing solution.
3.10.3 It should be noted however, again in accordance with previously established
guidance under PPG3 and circular 6/98 and working practice in most Local
Authority areas, that this is very much a secondary approach to sites and
should only apply where there is a very good case for off-site provision and
normally where more appropriate provision would result through that route.
PPS3 confirms this understanding. There may also be a route which involves
provision an alternative site.
3.10.4 It is an area of the Council’s approach that would, in our opinion, need to be
developed in detail through an affordable housing Supplementary Planning
Document, or possibly within a Development Plan Document.
3.10.5 In our experience, Local Authorities adopt a number of calculation methods.
3.10.6 In our view, a calculation route might not be prescriptive but instead might set
out the principles and underlying methodology but still allow for some degree
of negotiation in cases where scheme viability dictates (and is fully justified).
Thus it would be a parallel process to the on-site one. Example calculations
could be set out and thus give a guide to the level of payments expected for a
range of unit and possibly tenure types. Below we will consider a formulaic
approach at the heart of this, which we consider would be workable.
3.10.7 The best methods in our experience are those which are easily understood by
land owners and the development industry, as well as by the Local Authority
Officers. In our view, it is essential that methods are aligned to market
appraisal thinking rather than to terms only understood by those familiar with
affordable housing finance (such as the former Total Cost Indicators or by
over complex references to RSL payment figures and the like). It is also
important that any guidance and worked examples linked to the approach are
readily updateable.
3.10.8 Whilst some Local Authorities have still been using mechanisms which relate
back to the former Housing Corporation Total Cost Indicator regime in some
way, we feel those are now outmoded and should be set aside in favour of
methodologies which relate more closely to the market-led provision that
flows from the planning obligations.
3.10.9 This means considering a methodology which either:
•
Relates to the land cost element – allied to a nil cost land approach to
on -site provision of affordable housing, or
•
Relates to the build cost of the affordable homes in some way, or
perhaps
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•
Considers the difference between the projected open market sales
revenue and the affordable housing revenue for the relevant homes
which would have otherwise formed the on site quota.
3.10.10 Where a Local Authority has developed a prescriptive approach to the
sums a developer will receive for completed affordable homes on site (i.e. a
formal ‘Payment Table’ incorporating the sort of figures we set out at Figure 3
(2.7.3 of the report text)) it may make sense to look at the difference between
market value and the payment table figure (as per the third bullet above).
3.10.11 In our view the most appropriate route may be to look at land value,
particularly if a nil cost land/nil cost serviced land approach is settled upon for
the on site provision route. This means working out how much it would cost to
go elsewhere and replace the land on which the affordable housing would
have been sited.
3.10.12 We would start by taking a pre-affordable housing land value of, say, 40% of
the market sale value of a property and then add an allowance for acquisition
(perhaps plus potential servicing) costs associated with the task of securing
(and potentially servicing) land elsewhere – in the market. A relevant pre
affordable housing typical land value percentage could be drawn from this
study through further analysis of the results. In the Chiltern context, we
anticipate that a figure of around 40% of market sale value would be
appropriate.
3.10.13 Based purely on an indicative basis for our Value Point 1 property values this
would mean payments in lieu in the order of:
•
1bed flat @ 51sq m to sell at £147,900 x 40% = sum of £59,106 (say
£60,000)
•
2 bed flat @ 66 sq m to sell at £191,400 x 40% = sum of £76,560 (say
£77,000)
•
2 bed house @ 76 sq m to sell at £220,400 x 40% = sum of £88,160
(say £88,000)
•
3 bed house @ 86 sq m to sell at £249,400 x 40% = sum of £99,760
(say £100,000)
•
4 bed house @ 101 sq m to sell at £292,900 x 40% = sum of
£117,160 (say £117,000)
•
These might be regarded as starting point figures only, because in our
view there should also be an allowance added for land acquisition and
potentially for servicing costs (depending on the on-site affordable
housing landowner/developer subsidy expectation). This could be up
to 15% of the sums indicated above. We have recommended a similar
approach to other Local Authorities. As well as our work in the area,
we are aware of current Valuation Office Agency (VOA) work being
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carried out in West Sussex, and such an approach is being considered
widely there.
3.10.14 In our experience these indicative figures are of the right order in terms of
providing a basis for this thinking. Seeking to collect sums such as these
should not unduly impact on financial viability given the value levels seen in
Chiltern and providing they were not related to excessive policy requirements
in terms of affordable housing proportion. They are similar to sums we are
involved in negotiating in other Local Authority areas in the South East and
central South in particular.
3.10.15 Making a comparison to a nil cost land (or nil cost serviced land) approach,
they would also secure a broadly equivalent level of benefit secured as in the
case of the on site provision route; as per PPS3 requirements (noted at
3.10.2). Our interpretation is that it is not in order for Local Authorities to look
at the other side of the equation i.e. seek to quantify and capture the benefit
accrued to the developer or landowner by agreeing to commute the
requirements off site.
3.10.16 For illustration only, adding an up-lift of, say, 10% to allow for acquisition and
other land costs, perhaps including servicing to the site boundaries, would lift
the figures at 3.10.13 above to £66,000, £84,700, £96,800, £110,000 and
£128,700 respectively. In practice, again, all sites will be different so in reality
this % addition to reflect acquisition and servicing costs would vary.
3.10.17 An uplift of up to 15% applied to these per plot land values to reflect site
acquisition and servicing costs servicing would in our view be reflective of the
on site approach as the land cost itself would not facilitate the necessary
replacement site purchase; or echo the on-site route subsidy if that were
based on nil cost land or nil cost serviced land. In the VOA West Sussex work
mentioned at 3.10.13, a 15% addition has been made to reflect this. In the
quick example at 3.10.16 we use 10% only to illustrate the general thinking;
this would need to be worked up.
3.10.18 The figures could be re-worked as examples for higher value scenarios, fitting
the notion of broadly equivalent value and relating this also to market
circumstances. They could also be reworked based on particular selected
Residual Land Value Percentages derived from the wider study.
3.10.19 By way of example again, and applying the simple 40% of gross development
value rule of thumb to get to the residual land value guide, the base payment
in lieu figures (before any allowance for acquisition and servicing costs) would
rise to the following for our Value Point 3 scenarios:
•
1 bed flat
£85,680 (say £86,000)
•
2 bed flat
£110,880 (say £111,000)
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•
2 bed house
£127,680 (say £128,000)
•
3 bed house
£144,480 (say £144,000)
•
4 bed house
£169,680 (say £170,000)
3.10.20 The Council could choose a route of a simple formulaic approach, applying
the relevant values to that as site specific scenarios arise. This could be left
as a simple formula, based on the calculation method at 3.10.12. It could then
be illustrated by examples.
3.10.21 Alternatively, it could set out a single set of figures in a simple table, per
property type applicable District-wide, or range of figures based on value
variations.
3.10.22 Such commuted sums could also be used to support other affordable housing
schemes.
3.10.23 We would envisage these sums applying as triggered by the affordable
housing threshold(s) in the normal way, so there might be some exceptional
larger site scenarios to which this were applicable too.
3.10.24 As with the preferred on site route, flexibility needs to be considered –it would
need to be a target approach.
3.10.25 The Council might wish to keep this area under review. In pure financial
viability terms smaller sites than those we have appraised potentially could
make a valuable contribution to affordable housing need. We will pick up this
theme in our conclusions and recommendations to follow (sections 4 and 5).
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4. KEY POINTS and RECOMMENDATIONS
4.1
Adams Integra was commissioned by the Council to undertake a study which
would assist the Council’s understanding of the development economics
associated with providing affordable housing. It would, therefore, help inform
future policy directions for the Chiltern Local Development Framework. The
brief required the exploration a range of scenarios and reporting on the
outcomes from the testing of those. Based on the evidence gathered and the
modelling undertaken to support this study, Adams Integra makes the
following recommendations to the Council:
a.
(i)
The Council could opt for a nil cost land (or nil cost serviced land) approach to
affordable housing provision within the District. This means the
reimbursement developers receive for completing and handing over
affordable homes (usually to Registered Social Landlords – “RSLs”) is
restricted to their reasonable build costs.
(ii)
Alternatively the Council could continue to underpin its starting point on the
basis of little or no (Housing Corporation) social housing grant being
available. However in our view the Council should maintain dialogue with the
Housing Corporation to explore opportunities for drawing grant in to the
District to maintain or improve affordable housing delivery (by way of
numbers, tenure mix or other agreed benefits). The largest viability impacts
come from nil grant affordable rented accommodation.
(iii)
Extending the nil cost land assumption to cover significant subsidy by the
developer of the build cost as well in our experience often impacts viability
too steeply. It can be counter-productive through limiting the amount of
affordable housing viable – reducing what can be provided, or meaning more
grant reliance if provision is to be maintained. The pursuit of such an
approach is not recommended at this stage. It might be considered in the
future, in which case it would need to be fully explored based on agreed
assumptions.
b.
(i)
The results of our modelling suggest that in pure financial viability terms, a
20% proportion of affordable housing on sites of 5 to 9 units and up to 30%
proportion of affordable housing on sites of 10 to 14 units could be supported
at this stage of policy development, so a graduated approach
(sometimes extended further and known as a “sliding scale”) could be
considered. In comparison with the straight introduction of higher proportion
requirements on newly captured smaller sites, this would have a positive
effect on viability – impacts would be dampened on those newly and
otherwise potentially worse affected sites.
(ii)
There can be practical issues particularly with delivery of affordable
housing on such smaller sites. The Council could consider an approach
aligned to the collection of payments in lieu on some or all of these if it
considers that more suitable or sustainable provision could result from the
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contributions sought – an approach which we are aware some South East
Local Authorities are considering.
(iii)
The approach to rounding of affordable housing numbers required needs to
be borne in mind when the detail of the Council’s approach is worked up. It is
likely to be set out and form part of the target approach to provision, as on the
smallest sites rounding of numbers can have a significant effect.
c.
On sites of 15 units and above, in viability terms Adams Integra is able to
support the raising of the affordable housing proportion to a target of 40%.
This is in respect of all sites, including those for sheltered or elderly housing.
It is subject to the caveat that this is an overview report that cannot take into
account individual site characteristics and cannot deal with individual site
circumstances such as abnormal development costs. Although site viability is
affected and residual land values will be reduced, we do not feel that site
viability would be compromised to the point of making residential
development schemes unviable.
We would not, however, recommend the Council to pursue a target of 50%
affordable housing at the current time as part of a District-wide approach. The
comments below the following table should be noted, and this theme is also
picked up in section 5.
Site Size
(No.
of
dwellings)
% of affordable housing considered viable
20%
30%
5
9
10
9
35%
40%
50%
9
15
9
9
9
20
9
9
9
25
9
9
9
(9)
100
9
9
9
(9)
9
= viability support
(9)
= guarded viability support, potentially applicable as a target for
certain strategic or perhaps greenfield scenarios; and subject to specific
scheme details, tenure mix, funding and the like – and generally bearing in
mind the caveats expressed in this study. May be better considered as a
possible future option for exploration dependent on forthcoming land
availability assessment and monitoring of delivery and experiences resulting
from key policy options now being explored; or in the context of particular site
types/allocations. For instance where DPDs and SPDs or other tools or
processes might be used to steer particular site specific planning obligations
requirements meaning in turn that land owners’ and developers’ expectations
and feasibility scenarios are informed at very early stages.
d.
In the Chiltern context we do not consider it necessary to pursue policy which
varies affordable housing thresholds or proportions dependent on location or
other local distinctions. Our property values research has shown that new
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build housing values are consistently high across the District. Although we
have identified a range of potential values, all are relatively strong.
e.
In our view, the only variation within the overall approach needed at this stage
should be the recommended tapering up of % requirements: 20 > (possibly)
30 > 40 This would be positive in introducing affordable housing and therefore
its viability impacts in a graduated way in respect of sites which previously
have not had to provide it.
f.
In terms of tenure mix and viability the Council could adopt a target of 70%
affordable rented housing. A range of scenarios has been modelled. The
Council will need to maintain a practical approach to delivery, however, as the
report discusses. We understand that although the provision of shared
ownership homes has risen, the Council has been able to secure much
needed affordable rented accommodation including on 2 recent schemes
where the affordable housing was all rented.
g.
A methodology basis for the calculation of payments in lieu of on site
affordable housing has been suggested. This is based on calculating the
approximate land value element within the pre-affordable housing appraisals,
and so relates well to a nil cost land (or nil cost serviced land) approach for on
site provision. The guide figures are set out with their basis. The approach
could be purely formulaic with guide examples or could be expanded to
provide a set of figures (e.g. reflecting value ranges) or even single District
wide standard figures, for the various property types.
h.
As at b. above, the chosen payments in lieu methodology could also be
combined with a new policy position requiring sites of less than 15 units to
provide affordable housing. We are working with a number of Authorities who
are exploring on-site provision above 10 or 15 units; and use of part or all
payments in lieu on smaller sites. The Council would need to consider
whether such an approach aided or restricted the contribution to meeting
priority needs in the Chiltern context. There may be a role for the creative
use of such funds on the most appropriate sites if, for example, grant
funding availability is restricting what can be delivered on those. The study
acknowledges that there can be issues with affordable housing delivery on
some of the smallest sites.
i.
In all cases the affordable housing requirements must be regarded as targets,
in accordance with PPS3. Existing or competing land use values, abnormal
development costs and the overall planning obligations requirements can all
affect viability adversely. The Council will expect landowners and developers
to clearly demonstrate the issues in any instances where targets cannot be
met.
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5. WIDER CONCLUSIONS and RECOMMENDATIONS
5.1.1 There were two key elements to Chiltern District Council’s brief.
5.1.2
Firstly the Council wished to understand the development viability impacts
from a range of potential planning led affordable housing policy options. The
Council is in the process of developing Core Strategy Policy options, and
needs to consider the soundness of a range of potential policy approaches,
from a viability point of view, before committing to any particular route.
Currently the Council seeks as a starting point 30% affordable housing on
qualifying sites of 15 or more dwellings. A potential policy option would be to
make no change. However, in the context of severe affordability issues and
known local levels of need, securing more affordable housing is a Strategic
aim of the Council.
5.1.3
We agreed a methodology with the Council to review the likely impacts on
scheme viability through increasing the scope of policy application to include
seeking 20% on sites of 5, 20% or 30% on sites of 10 units and seeking 35%,
40% or 50% on sites above the current threshold of 15 units. The context for
this was to identify the level of developer subsidy that can be requested
without compromising the financial viability across a range of potential
residential development schemes of varying sizes with varying mixes of
dwelling type. Additionally the impact of varying affordable tenures on scheme
viability was also investigated, linked to the affordable housing proportion and
development size.
5.1.4
Secondly, the Council wished to develop its understanding of the likely sum(s)
of money per unit of housing that could reasonably be taken by the Council
in lieu of on-site affordable housing without compromising the financial
viability of residential development in the District
5.1.5
We appraised a range of notional residential development schemes based on
the typical range of sales values encountered within the District. The notional
schemes varied in size from 5 to 100 units, being comprised of flats, houses
and a mix of those. We fixed development values and costs assumptions
while varying the affordable housing content and tenure of schemes so as to
review the impact of the changing affordable housing policy on development
viability.
5.1.6
Property market research was carried out to establish the range of sales
values which we used in the appraisal modelling. Owing to the variety of
value levels encountered in the District, and the sometimes unpredictable
distribution of those value levels we settled on approach which considers a
range of “Value Points”. This is a methodology we have now used in many
such studies.
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5.1.7
For each of the three Value Points used in the case of Chiltern we give a
typical price level to each property type contained in the appraisals, from 1
bed flats through to 4 bed houses.
5.1.8
We did not feel it appropriate to label specific locations, areas or settlements
as higher/lower value, or similar. This is because, in practice, we found that
values can vary from street to street and within very small areas. The Value
Pointing approach means that viability outcomes can effectively be
transported around the District and a feel for viability gained in relation to
relevant value levels.
5.1.9
We describe the Value Points range in terms of 1 to 3. Just for example, at
the lowest value point studied (Point 1 scenarios), a 2 bed house is priced at
£220,400, moving through a range of value points to £319,200 at Point 3.
5.1.10 Typically, the lowest values encountered were in parts of Chesham whilst the
highest were seen in a range of localities across the District. Examples of
higher value localities were areas of Amersham, Chalfont St Giles, Seer
Green and Penn. These are just examples and as per our Value Pointing
approach, the most important point to recognise is that as in all areas, a
range of values is seen. No settlement listing or similar can be definitive on
this point.
5.1.11 Therefore, we have studied what financial viability looks like in the lowest
value (worst case new build values) scenarios likely to exist in the District,
through to the upper value level scenarios where financial viability issues are
usually of much less concern. We are aware that in certain localities values
will go well beyond the levels we have assumed. Subject to the universal
caveats we set out, financial viability is unlikely to be an issue in such cases.
Issues are much more likely to be around design, scheme costs, marketing
and other planning objectives, etc.
5.1.12 There are provisos to this. These include the fact that on this notional sites
basis, site specific issues and abnormal costs cannot be accounted for. The
fact that individual sites and schemes vary is a key characteristic of the
development process. As this study explains, there will be occasions where
particular site characteristics and costs mean that a negotiated approach and
potential compromise on affordable housing provision and/or other
infrastructure requirements may be necessary.
5.1.13 In our opinion the use of notional sites does, however, most effectively enable
like for like comparisons to be made, i.e. the testing of impacts of the varying
requirements on the same typical scheme in a range of value locations. The
fact that individual schemes vary makes like for like comparison very difficult
when studying those for this purpose of trying to measure policy impacts, with
full reliable and readily comparable information being critical.
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5.1.14 The appraisals used a residual valuation approach which, in summary,
deducts development costs from total sales values to ascertain what sum of
money remains for site purchase. As the affordable housing policy approach
is altered and tested, we see significant changes in the residual land values
and we use the size of those changes as our key indicator for judging the
likely impacts of a variety of possible affordable housing policy positions.
5.1.15 We based the bulk of our modelling on an assumption of a 15% developers
profit level (of total ‘gross’ development value) but, given our
acknowledgement that profit levels vary, we also looked at the sensitivity of
sample results to a 20% developers profit level. We found, not surprisingly,
that viability assessments were further impacted by this additional call on
development revenue, but not to the point that undermines the setting of
policy targets on the range of policy options considered.
5.1.16 In terms of sensitivity of results to wider assumptions, we also compared the
impact on scheme viability from requesting nil cost land for affordable
housing. The impacts from a nil cost land scenario were less than from
a100% rented tenure (with no grant) position but greater than for a 50/50
tenure mix. This showed us that in viability terms the Council could consider
detailed policy involving a nil cost land approach were it minded to do so.
5.1.17 We did not model the impact of a level of developer/landowner subsidy which
goes beyond nil cost land. This was beyond the scope of the brief. Such an
approach would need to be tested by additional modelling were the Council
minded to consider it. In our experience such an approach usually goes too
far in viability terms and can result in a significantly lower level of affordable
housing provision by concentrating the private (land owner/developer)
scheme subsidy element into fewer affordable homes.
5.1.18 This conclusions section will not repeat the numerical detail set out in the
report body and appendices, but we will set out the key trends and outcomes
noted in more general terms, allowing us to make our recommendations.
5.1.19 The results highlighted in this report and supported by the tables and graphs
which make up Appendix II indicate that the proposed increased proportions
of affordable housing sought on qualifying sites has an impact across the
model scenarios that is directly correlated to the Value Points. In all cases, all
potential policy options have the effect of reducing the residual land value.
This is quite normal.
5.1.20 There is a notable impact from a policy approach which requires the provision
of affordable housing on smaller sites below the current threshold of 15 units.
Modelling indicates the biggest dip in land values on these smaller sites, even
at a lower delivery rate of 20%. However, this trend on newly captured sites is
not unusual. As we comment on in this study. Given the high property and
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therefore land values predominant in Chiltern, we consider that carefully
judged policies relating to smaller sites would be workable and viable.
5.1.21 Once affordable housing is required on a site then typically there is a less
steep decline in land values resulting from a stepping up of affordable
housing policy requirements (i.e. increased proportions). Nevertheless, the
impacts can still be very significant, particularly in the lower value areas. In
the case of Chiltern, affordable housing is already at a threshold of 15 units.
So the impact of increasing the requirement at that point to 40% from 30% is
not as great as in other areas where we have encountered the threshold
being lowered to 15 from a higher point as well as the proportion of affordable
housing being increased.
5.1.22 Chiltern is an area where high property values, and thus high development
and land values, are the norm. This can be said of the whole District, as even
in the lower value localities, values are relatively strong. This is borne out by
the results of our property values research and our appraisal modelling.
5.1.23 As property values are high in Chiltern, the RLVs after making an allowance
for the provision of affordable housing are still relatively strong. The property
and, therefore, land values, before and after affordable housing is considered,
are stronger than in most other areas we have studied. It must be
remembered however that although the sums remaining for land purchase
after the allowance for affordable housing are significant the relative scale of
impact on values is large. By this we mean that the difference between the
‘before and after policy application’ values will be as significant as in other
lower value areas, and thus the issue of reduced expectations by landowners
just as relevant.
5.1.24 To give a little more detail here before summarising outcomes and making
recommendations, we studied sites of 5 and 10 units (reflecting a potential
lowered threshold from the present policy level of 15). These were tested at
20% at 5 units and 20% and 30% at 10 units. Notional schemes of 15, 20, 25
and 100 units (i.e. those caught by the current policy threshold) were tested at
the existing 30% and a higher 35%, 40% content. 25 and 100 unit schemes
were also tested at 50% affordable housing. All schemes tested below the
current 15 threshold were also modelled with zero affordable housing content
so that we could compare approximate starting point (pre-policy) land values
with those resulting from the changes tested.
5.1.25 There is a direct relationship between the high local price levels and the need
for Affordable Housing in the District, which the Council has identified as a
priority. At the time of writing, the latest housing needs survey information
showed a requirement for in excess of 400 additional affordable homes per
annum; over three times the emerging Regional Spatial Strategy target of 120
dwellings altogether (of all types) per annum for the District.
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5.1.26 The critical issues of maintaining housing supply overall and balancing the
housing market need to be taken into account. PPS 3 recognises this and
states that Local Authorities must consider the economics of housing sites
development in their area.
5.1.27 We will now summarise our findings.
5.1.28 The key outcome of this study is that from a financial viability point of view we
are able to support the policy option headline of 40% affordable housing on
sites of 15 or more dwellings.
5.1.29 This would bring policy in Chiltern in line with the direction of that in many
other South East Local Authorities, including some with lower property and
land values
5.1.30 As a headline/target requirement this would also be an important tool for the
Council in seeking to optimise provision against overall South East Plan
targets on affordable housing.
5.1.31 The “National indicative minimum” (site size) threshold for affordable housing
is regarded as 15 dwellings, as set out by the Government’s PPS3. The PPS
goes on to say however that Local Authorities can set lower thresholds
“where viable and practicable”.
5.1.32 Should it be minded to further consider a lower threshold than 15 the Council
will need to weigh up the wider case for that position. It is evident that the
sites coming forward for development in the District are typically small in
nature, and most commonly involve less than 15 dwellings. The type of sites
coming forward, and the potential for affordable housing delivery likely to flow
from those sites, would need to be reviewed. In our view, a lowered threshold
could be considered on viability grounds. In accordance with the Council’s
Brief, we reviewed the viability of notional sites of 5 and 10 dwellings. Those
appraisals were carried out at 20% potential affordable housing content on
sites of 5 dwellings; 20% and 30% on sites of 15 dwellings, on the same
tenure mix variations as for the larger notional sites modelled.
5.1.33 Should the Council consider proposing a lowered threshold of say 5 units
then we recommend it links that thinking to a lowered, what might be seen as
‘Introductory’, proportion of affordable housing on sites below the current 15
threshold. Only time would tell what impact it had on the issue of avoidance of
thresholds by ‘engineering’ scheme size. That issue is really a market
consequence of the threshold system.
5.1.34 Purely from a financial viability point of view we would be able to support a
policy target that sought 20% affordable housing on sites as small as 5
dwellings and potentially up to 30% on sites of 10 dwellings, across the
District.
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5.1.35 As this would basically involve testing the workability of such proposals in the
District at this stage, and because of the rounding calculations involved on the
smallest sites our suggestion is that the Council should consider that
introductory proportion being set at 20%. For example at 20% a 5 unit site
would produce a requirement for 1 affordable unit. Based on conventional
rounding, the smallest site which would then produce 2 affordable units on
site would be for a scheme of 8 units (rounded up from 1.6).
5.1.36 There might be alternatives. Through considering the numbers rounding
issues the Council could set out a sliding scale clarifying the number of
affordable units to be sought for each given scheme size in the range from
say 5 to 14 dwellings. The Council could then look at the detail of such a
scale in terms of the rounding issues, the point at which the requirement
stepped up from 1 to 2 and possibly 2 to 3 affordable units.
5.1.37 Alternatively, whilst there would be a need to avoid over-complicating it, the
Council might also consider an approach which involved collecting money in
lieu of on-site affordable housing or smaller sites, or in lieu of part units.
Clearly where land supply is scarce and sites are expensive, wherever
possible, the actual provision of affordable homes on sites through planningled supply will be crucial, rather than an over-reliance on the collection of
monies. As with the wider use of payment in lieu monies, the Council will
need to consider these issues.
5.1.38 There may be instances where location, design, servicing cost, marketing or
other practical issues will mean that a reduced proportion of less than the
headline percentage affordable housing, and/or revised tenure mix will need
to be negotiated following open discussions with developers. On the smaller
sites in particular, it is likely to be the practical design and other sensitivities
which may be more of an issue than financial viability.
5.1.39 As with the policy approach in general, this particular aspect of a lowered
threshold would need to be kept under review in the light of experience from
implementing policy (testing its impacts and monitoring delivery from it). The
approach might then be honed in the future.
5.1.40 The final judgement on exactly where this element of the policy proposals will
settle should in our view be based on all the factors viewed together, i.e.
alongside the viability outcomes. Included in these will be the key elements of
forecasting of increased affordable housing units delivery based on the size
and number of sites coming forward (site capture); local housing needs and
practical thinking on the outcome of having small numbers of affordable
homes distributed widely between one and probably a maximum of 5 units
spread across a higher number of schemes. There may need to be some
testing of any concerns over sustainability generally, but also of good RSL
management regimes. RSLs’ views might be sought, although any testing of
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their views at this early policy consideration stage was beyond the scope of
this work.
5.1.41 We have not modelled sites of fewer than 5 dwellings for this study. It is
possible that for future policy development the Council might consider how
even smaller sites might contribute to affordable housing need. Subject to
monitoring outcomes and delivery from the type of policy steps considered by
this study, and carrying out similar testing, this might be workable in viability
terms if the contribution requirements were judged correctly. Certainly, the
practical issues would need to be considered. It seems that with growing
affordability problems and need levels, in the future Councils will need to
consider expanded approaches to securing contributions.
5.1.42 We were also required by the Council to consider the viability impact of
affordable housing tenure mix.
5.1.43 Given the Council’s nil grant starting point and the RSL type financial
appraisals that drives, in our view it might be unrealistic to sustain a target of
100% affordable rented accommodation on all sites.
5.1.44 Although PPS 3 gives encouragement for Councils to say more in policy
about tenure mix (i.e. set targets and guide it, dependent on funding
availability etc) than had been considered appropriate in previous overarching guidance, it may well be that a fully prescriptive approach is still not
appropriate.
5.1.45 Clearly the worst viability impacts come from an all affordable rented
assumption. At 30%, 35% or 40% affordable housing viability results from
100% (of the ‘quota’) affordable were notably poorer than for either 100%
Shared Ownership or a 50/50 tenure mix.
5.1.46 In our view, a more sustainable target, and one more in line with the approach
set out in the Regional Spatial Strategy would be to aim for 70% affordable
rent – as the target/headline. The local level of need for affordable rented
accommodation in particular will underpin the requirement to seek a
predominance of that tenure type. The possible role of grant and likelihood of
obtaining it should not be ruled out. A flexible approach will be needed in
delivery however. This might mean ultimately settling for a more balanced
mix, which is likely to be more financially sustainable across a range of sites if
a nil or limited grant scenario prevails.
5.1.47 Linked to this, and an issue which is difficult to state but nonetheless we feel
needs to be acknowledged, is the area of perceptions of affordable housing –
by residents in a wider sense, by developers from a their marketing stance,
etc. By taking a wider view of what affordable housing encompasses – in
reality it may be a menu of solutions and models – it may be possible to alter
such perceptions and break down certain barriers to delivery. There is no
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doubt that economic and community sustainability relies on a range of
housing solutions, and the Council will need to consider how it seeks to
balance overcoming those barriers and delivering with limited grant, with the
provision of much needed affordable rented accommodation.
5.1.48 Our poorest viability results have come from testing the policy option of 50%
affordable housing based on assumptions of lower end values and also when
all of that is for affordable rent.
5.1.49 In our view a 50% requirement is likely to go too far in viability terms if applied
in any District wide or overall target sense (particularly while the Council
operates a mortgage only funded, grant free RSL payment assumption).
Overall we feel that a target of 50% affordable housing will be difficult to
support unless linked to specific types of sites - possibly most appropriately
strategic or greenfield land releases. This would need to be considered
further by the Council if maintained as a policy option for certain
circumstances, probably linked to more flexibility on tenure mix unless very
significant grant funding becomes available to support the normally prioritised
provision affordable rented accommodation in large proportions still.
5.1.50 Crucially, and regardless of detail, the policy proposals would need to come
forward as targets. They should not be expressed as a minimum level of
provision or be capable of interpretation in an ambiguous way. The new policy
proposals should be viewed in the context of raising the bar on expectations –
the Council seeking to secure significantly improved delivery from current
levels. In our experience the wording of policies has been the subject of much
discussion by Inspectors who are looking for clarity, in the context of the
“targets” approach set out in PPS3.
5.1.51 It is vitally important that a flexible and negotiated approach to policy
application is adopted to ensure the continued supply of residential
development land, notwithstanding the very high priority that will be given to
addressing affordable housing need.
5.1.52 The policy or supporting text would need to make this flexible approach clear.
The aim is to provide clear and robust targets for guidance to developers and
landowners in appraising and bring forward sites.
5.1.53 There are now examples of the type of wording likely to be considered
appropriate to frame a clear policy target. One example is within Horsham
District Council’s Core Strategy (adopted February 2007) Policy CP12 –
Meeting Housing Needs.It is available via:
http://www.horsham.gov.uk/strategic_planning/Core_Strategy
Adams Integra supported Horsham District Council by carrying out similar
viability work there. The Horsham policy states “….Development should
provide a mix of housing sizes, types and tenures to meet the needs of the
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District’s communities. Provision should particularly be made for smaller
homes to meet the needs of existing and new households. Residential
developments of 15 dwellings or more (or on sites of 0.5 hectare and above)
will be expected to include an appropriate proportion of affordable homes,
with the target being 40% of the total, in order to meet the proven needs of
people who are not able to compete in the general housing market.” [our
italics emphasis].The policy goes on to cover how it will apply to sites of 5 or
more dwellings in smaller settlements; bearing in mind that its development
preceded PPG3 which in our view brought in more flexibility to consider lower
thresholds in all areas where viable and practicable.
5.1.54 The Council is advised to consider policy structure and wording examples
from elsewhere now that there is some experience of Core Strategy
preparation, Examination and Inspectors’ views. It is not the purpose of this
study to go into detail on these points
5.1.55 This type of clear target and negotiated approach, as advocated by
Government Guidance, then needs to be brought to life through appropriate
Supplementary Planning Documents and/or Development Plan Documents.
5.1.56 The Council’s brief required us to consider the use of payments in lieu of onsite affordable housing, the use of which process needs to be secondary to
delivering integrated affordable housing within market schemes.
5.1.57 Policy needs to be clear in stating this. Detailed guidance should then be set
out in Supplementary Planning or Development Plan Documents, including on
how the calculation of appropriate sums will be guided.
5.1.58 On our visits to Chiltern to familiarise ourselves with development activity
locally, we noted that there have been, and are, a number of private sheltered
housing schemes brought and coming forward by specialist developers,
including national named companies. This is clearly a form of development
which is in demand locally – there is a market for it. Chiltern is not unusual in
this respect. Such dwellings also command strong prices.
5.1.59 On-site affordable housing provision on such schemes should certainly not be
ruled out. There can be issues around design, buy-in of communal service
levels (viability in a wider sense), management regimes and service charge
levels – but these issues should be examined and not be assumed to prevent
on site affordable housing delivery. In developing policy and considering sites
the Council should in our view recognise the particular issues that can be
relevant for this type of scheme. It should, however, work on the basis (and
include within policy development a baseline assumption) that such schemes
should contribute to affordable housing need; and do so by way of on site
provision as a first assumption. So, such schemes would in the first instance
be treated in the same way as in all other cases where affordable housing
thresholds are triggered. Whilst the role of payments in lieu could be relevant
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to this market sector for some schemes, depending on size and viability,
provision from such schemes need not be related exclusively to that route.
Exceptions can be made regardless of specific scheme type, but they should
be properly justified.
5.1.60 In dealing with payments in lieu the same viability caveats (as to the
achievable scale of sums related to the proportion of affordable housing
sought through the calculation) will apply as with on-site delivery. Our
recommendation is that the calculations are based on the cost of purchasing
land in the market elsewhere, to replace that which would have been
occupied by the affordable housing on site.
Unless the Council moves
towards having in place a more prescriptive approach to developer’s receipts
for completed affordable homes provided on site (referred to in the study as a
‘Payment Table’ type approach) a land value-led approach is likely to give
most clarity and relate best to market-led development, and thus a level of
understanding by developers and landowners.
5.1.61 Looking at the pre-affordable housing approximate land values, the guide
calculations could be based on 40% of the market value of the relevant
proposed open market dwellings. This would produce an appropriate
(approximate) plot value, to which the Council might consider adding some
acquisition and servicing cost allowance (we have suggested of 10 – 15%) as
if it were to seek to replace land it would need more than the land value to
fund that process.
5.1.62 For guidance, the starting point figures for negotiations on payments in lieu
are likely to be around £60,000 for a 1 bed flat to around double that for a 4
bed family house, dependent on the unit size and local values. These figures
might be increased to cover land acquisition and servicing costs, as explained
In section 3 as with on site provision, it is unlikely that a prescriptive
approach would be appropriate. These are based on our (lowest) Value Point
1 figures.
5.1.63 As discussed in the report, and again related to the cost of provision on
particular sites, it may be relevant to increase the sums for higher value
scenarios.
5.1.64 Particularly at the stage of introducing and testing the workability of new
policy, we would not recommend seeking significantly higher payment in lieu
figures than those we have put forward.
5.1.65 As with other planning obligation requirements, in drawing up its more
detailed guidance, the Council needs to consider the timing of such payments
and how indexing of sums to be paid at a future point is to be dealt with. In
our view it is unlikely to be appropriate to seek any kind of claw-back or
enhanced payments, other than by simple indexing, as a result of rising
values. Such an approach would be difficult to manage successfully.
Adams Integra – July 2007 (Ref: 06373)
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Chiltern District Council - Affordable Housing Development Economics Study
5.1.66 The Council would need to have a strategy in place and should keep open
records of where payment in lieu monies are collected and spent. It would
normally manage an ‘affordable housing fund’ or similar and will need to
ensure that best possible use of them is made in conjunction with other
schemes and resources.
5.1.67 The Council may be able to apply some creative thinking in terms of the
application of commuted sums monies to provide housing in such areas of
priority need, or through its relationships with the Housing Corporation, RSLs
and developers to flag up funding requirements early and source social
housing grant with greater certainty; or other funding and innovative housing
investment solutions where available.
5.1.68 From discussions with the Council we are aware that very little Housing
Corporation Grant has been made available in Chiltern in recent years. In our
view this should not be taken as an established picture. Dialogue with the
Corporation should be maintained as there may well be schemes where grant
funding would help to maintain affordable housing numbers or priority tenure
(affordable rent) mix. While a grant free situation is a sound starting
assumption point for delivery, the possibility of securing grant funding may be
enhanced by the Council taking a stance of aiming to secure a significant
level of developer’s subsidy so that any other funding will add clearly to
schemes. The potential for future grant funding availability should be borne in
mind.
5.1.69 In developing policy detail, the Council should be clear about the level of
subsidy expected from landowners and developers. Over time, expectations
of land owners in particular will need to be revised.
5.1.70 If clear guidance as to expected level of subsidy is not given and sites are
thus appraised incorrectly, the result could be reduced affordable numbers or
unmet tenure mix requirements.
5.1.71 Looking at development viability there can be no definite cut-off point as to
what works and what does not. Each landowner’s position and whether
sufficient value will be created to incentivise the sale of a site will vary from
case to case. It is not appropriate to assume that because a development
appears to produce some residual land value, or even what looks like a high
residual land value, the land will change hands and the development proceed.
This must be viewed alongside the owner’s enjoyment/use of the land,
existing use value and alternative uses that the site may be put to in order for
a greater receipt to be achieved. In reality, scheme specific land values would
have to be considered alongside existing or alternative use values and the
latter, being very location and planning use or business dependent, will vary
significantly too.
Adams Integra – July 2007 (Ref: 06373)
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Chiltern District Council - Affordable Housing Development Economics Study
5.1.72 To attempt to make detailed comparisons with existing or alternative uses in
this type of overview work for policy context would, in our view, have limited
meaning. Values are highly site specific. Nonetheless this study
acknowledges that the level of value created by a residential scheme after
making allowance for affordable housing and other planning obligations
requirements will need to be weighed up against any existing or alternative
use relevant to a particular site.
5.1.73 Adams Integra has also made enquiries of a number of commercially oriented
local surveyors and agents during the course of this study. For some of our
studies it has been possible to get a limited amount of local guideline
information on land values for commercial development of various types.
Such information is always purely indicative, but has on some occasions
allowed relatively crude comparisons to be made between our indicative
residential land values and land values for industrial, office, etc, development.
It has not been possible to source this kind of guide information in Chiltern,
which we have found in many other locations too, with the agents confirming
our view that such values are highly site specific – often depending on exact
location, road links, planning consent, trading potential, etc. Values for
existing commercial premises (those in use or capable of going back in to
use) are very wide-ranging and potentially even more site-specific.
Information sources such as the VOA reports, Land Registry or other
information available on the internet do not provide sufficiently local
information to be relevant in this context in the case of Chiltern. There is
sometimes more information available in respect of larger commercial centres
than exist in Chiltern.
5.1.74 As we point out in this report the ability of the scheme to support appropriate
developers profit to reward risk, the incidence of abnormal development costs
and the overall scale of planning obligation requirements (the ‘collective
burden’) on sites, and how these inter-relate with the above factors, will all be
relevant. Scheme specific appraisals, reviewed openly by the Council and
developers, will need to be used to help determine negotiated outcomes
where overall viability is prejudiced and there needs to be compromise.
5.1.75 The Council will expect developers and land owners to come to the table and
be prepared to explain and justify why, in any relevant cases, the affordable
housing targets cannot be met given other demands on a scheme.
5.1.76 It should be noted that pure comparison of residual land value resulting from
flatted as opposed to housing schemes, particularly when looking at per unit
plot values, can be misleading because the land take per unit is much
reduced. A flatted scheme generally needs to produce approximately twice
the density of a pure housing scheme in order to be viable, and may achieve
more than that. Particularly in areas such as Chiltern, there are also cases
where very high value apartment schemes buck this trend owing to the level
Adams Integra – July 2007 (Ref: 06373)
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Chiltern District Council - Affordable Housing Development Economics Study
of values achieved – i.e. where densities do not necessarily need to be much
higher to create significant site values.
5.1.77 The onus will be on developers to clearly and fully demonstrate why they are
unable to meet affordable housing or other planning infrastructure
requirements in instances where that is the case. It is expected that a
methodology similar to one we have used will be appropriate for this process,
to explore the relationship between development costs and values. Again
however we reiterate that whilst this methodology is generally accepted, and
the assumptions we have used might guide the Council on starting/indicative
parameters, there will be no substitute for site-specific appraisal work of this
type. Such work would take into account appropriate specific assumptions.
5.1.78 Issues may arise on those sites which have already changed hands or are
committed through option or similar arrangements, where figures may simply
not work when set against the proposed policy requirements. In the same
way, there will be some previous planning consents capable of
implementation.
5.1.79 A degree of difficulty with increasing planning-led affordable housing supply
may be experienced during the adjustment process where there will be
problems whilst developers/landowners get accustomed to the new policies
and expectations are modified. The modelling in this study has been carried
out on the assumption that knowledge of policies exists and that the
landowner/developer information and adjustment process has been
undertaken.
5.1.80 This study has considered planning led affordable housing in the context of
integrated provision within market led schemes, secured through planning
obligations usually embodied in a Section 106 agreement. The Council, along
with its partners, should also consider the wider routes to affordable housing
provision. Housing Association or contractor developer led schemes can be
successful in significantly bolstering local provision – sometimes on lower
value, more difficult sites, for example as a part of removing non-conforming
uses from older residential areas or recycling unviable former commercial
land. There will always be a balance with retaining sufficient land for
employment use, but the various supply sources of affordable housing need
to be encouraged. The appraisals for such schemes can sometimes be aided
by taking a reduced view on profit needed. Housing Associations and others
should be encouraged to be proactive in these areas, and supported by the
Council where possible.
End of Main Report
Appendices follow
July 2007
Adams Integra – July 2007 (Ref: 06373)
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Chiltern District Council - Affordable Housing Development Economics Study
Appendices
Appendix I -
Development Scenarios - Showing Range of
Appraisals
Appendix II -
Results of Land Residual Calculations (Tables 1 – 6);
Graphs 1 to 27, 1a to 27a and 1b to 27b)
Appendix III -
Chiltern Property Values Report
Appendix IV -
Glossary of terms
Adams Integra – July 2007 (Ref: 06373)
58
APPENDIX I
Development Scenarios – Showing Range of Appraisals
Development Scenarios and Key Assumptions Required for Chiltern District Council Viability Study Based on Mortgage Funded By Rental Stream Payment to
Developers for Completed Affordable Units (No Grant)
Development Scenario
/ Threshold
Unit Mix
Band
5 Units - 5 x Houses
3 x 3-bed houses; 2 x 2bed houses
1
2
3
0%
0%
0%
20%
20%
20%
10 Units - 10 x Houses
5 x 3-bed houses; 5 x 2bed houses
1
2
3
0%
0%
0%
20%
20%
20%
15 Units - 15 x Houses
10 x 3-bed houses; 5 x
2-bed houses
5 x 4-bed houses; 10 x
20 Units - 20 x Houses 3-bed houses; 5 x 2bed houses
20 Units - 20 x Flats
13 x 2-bed flats; 7 x 1bed flats
6 x 4-bed houses; 13 x
25 Units - 25 x Houses 3-bed houses; 6 x 2bed houses
25 Units - 25 x Flats
25 Units Mixed - 15 x
Houses; 10 x Flats
100 Unit Scheme
(Greenfield) - 50
Houses; 50 Flats
15 x 2-bed flats; 10 x 1bed flats
6 x 2-bed flats; 4 x 1bed flats; 10 x 3-bed
houses; 5 x 2-bed
houses
33 x 2-bed flats; 17 x 1bed flats; 11 x 2-bed
houses; 25 x 3-bed
houses; 14 x 4-bed
houses
30%
30%
30%
1
30%
35%
40%
2
30%
35%
40%
3
30%
35%
40%
1
30%
35%
40%
2
30%
35%
40%
3
30%
35%
40%
1
30%
35%
40%
2
30%
35%
40%
3
30%
35%
40%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
3
30%
35%
40%
50%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
3
30%
35%
40%
50%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
3
30%
35%
40%
50%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
30%
35%
40%
50%
4-Bed Houses
£292,900
£358,550
£424,200
£ / sq m Equivalent
£2,900
£3,550
£4,200
3
Total Appraisals =
Build Period
(Months) Abnormals
£3,000
9
£15,000
£4,000
9
£20,000
£5,000
9
£25,000
£10,000
12
£30,000
£10,000
12
£30,000
£15,000
12
£35,000
£15,000
12
£35,000
£15,000
12
£35,000
£50,000
24
£100,000
90
Band
1
2
3
1-Bed Flats
£147,900
£181,050
£214,200
1-Bed Flats
51
2-Bed Flats
66
Other Assumtions:
Infrastructure Costs per
unit:
Finance (%)
Build Costs
Build Period Lead In
Survey
Costs (per
site)
% Affordable
£4,000
6.50%
Standard
6 months
2-Bed Flats
£191,400
£234,300
£277,200
Sizes (sq m)
2-Bed Houses
76
Values
2-Bed Houses
3-Bed Houses
£220,400
£249,400
£269,800
£305,300
£319,200
£361,200
3-Bed Houses
86
Notes:
4-Bed Houses
101
Appraisals carried out with variations to tenure mix. All schemes appraised with 100% Rent; 50% Rent / 50% Shared Ownership and 100%
Shared Ownership. In addition a sample of appraisals were carried out for 25 and 100 unit schemes on the basis of a 30% shared ownership
/ 70% social rented tenure split.
Appendix I
Development Scenarios and Key Assumptions Required for Chiltern District Council Viability Study based on Free Land Basis of Payment to Developers for
Completed Affordable Units
Development Scenario
/ Threshold
Unit Mix
Band
5 Units - 5 x Houses
3 x 3-bed houses; 2 x 2bed houses
1
2
3
0%
0%
0%
20%
20%
20%
10 Units - 10 x Houses
5 x 3-bed houses; 5 x 2bed houses
1
2
3
0%
0%
0%
20%
20%
20%
15 Units - 15 x Houses
10 x 3-bed houses; 5 x
2-bed houses
5 x 4-bed houses; 10 x
20 Units - 20 x Houses 3-bed houses; 5 x 2bed houses
20 Units - 20 x Flats
13 x 2-bed flats; 7 x 1bed flats
6 x 4-bed houses; 13 x
25 Units - 25 x Houses 3-bed houses; 6 x 2bed houses
25 Units - 25 x Flats
25 Units Mixed - 15 x
Houses; 10 x Flats
100 Unit Scheme
(Greenfield) - 50
Houses; 50 Flats
15 x 2-bed flats; 10 x 1bed flats
6 x 2-bed flats; 4 x 1bed flats; 10 x 3-bed
houses; 5 x 2-bed
houses
33 x 2-bed flats; 17 x 1bed flats; 11 x 2-bed
houses; 25 x 3-bed
houses; 14 x 4-bed
houses
30%
30%
30%
1
30%
35%
40%
2
30%
35%
40%
3
30%
35%
40%
1
30%
35%
40%
2
30%
35%
40%
3
30%
35%
40%
1
30%
35%
40%
2
30%
35%
40%
3
30%
35%
40%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
3
30%
35%
40%
50%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
3
30%
35%
40%
50%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
3
30%
35%
40%
50%
1
30%
35%
40%
50%
2
30%
35%
40%
50%
30%
35%
40%
50%
4-Bed Houses
£292,900
£358,550
£424,200
£ / sq m Equivalent
£2,900
£3,550
£4,200
3
Total Appraisals =
Build Period
(Months) Abnormals
£3,000
9
£15,000
£4,000
9
£20,000
£5,000
9
£25,000
£10,000
12
£30,000
£10,000
12
£30,000
£15,000
12
£35,000
£15,000
12
£35,000
£15,000
12
£35,000
£50,000
24
£100,000
90
Band
1
2
3
1-Bed Flats
£147,900
£181,050
£214,200
1-Bed Flats
51
2-Bed Flats
66
Other Assumtions:
Infrastructure Costs per
unit:
Finance (%)
Build Costs
Build Period Lead In
Survey
Costs (per
site)
% Affordable
2-Bed Flats
£191,400
£234,300
£277,200
Sizes (sq m)
2-Bed Houses
76
Values
2-Bed Houses
3-Bed Houses
£220,400
£249,400
£269,800
£305,300
£319,200
£361,200
3-Bed Houses
86
4-Bed Houses
101
£4,000
6.50%
Standard
6 months
Appendix I
APPENDIX II
Results of Land Residual Calculations
(Tables 1-6; Graphs 1 -27, 1a – 27a
and 1b to 27b)
Table1: Band 1 Scheme Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual Land Value from Adopted Policy Position
5 Units - Housing Scheme
10 Unit - Housing Scheme
Appraisal Type
15 Unit - Housing Scheme
20 Unit - Flatted Scheme
20 Unit - Housing Scheme
RLV
RLV as %
of GDV
Reduction in RLV
from Current
Policy Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
0% Affordable
£424,947
35.7%
N/A
£841,292
35.8%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 100% Rent
£289,776
28.8%
31.8%
£590,253
29.4%
29.8%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, S.O.
£375,048
33.4%
11.7%
£712,062
32.8%
15.4%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
£647,228
31.1%
23.1%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30% Affordable, 100% Rent
N/A
N/A
N/A
£461,230
25.3%
45.2%
£659,684
24.2%
N/A
£487,835
17.6%
N/A
£976,495
24.8%
N/A
30% Affordable, S.O.
N/A
N/A
N/A
£651,775
31.2%
22.5%
£968,136
30.7%
N/A
£733,433
23.5%
N/A
£1,371,207
30.5%
N/A
30% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
£513,450
27.0%
39.0%
£773,634
26.8%
N/A
£610,634
20.7%
N/A
£1,168,525
27.7%
N/A
35% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
£525,906
20.7%
20.3%
£394,888
14.9%
19.1%
£845,097
22.5%
13.5%
35% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
£899,192
29.4%
7.1%
£681,464
22.4%
7.1%
£1,303,489
29.7%
4.9%
35% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
£639,857
23.7%
17.3%
£513,616
18.2%
15.9%
£1,042,452
25.9%
10.8%
40% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
£525,906
20.7%
20.3%
£320,418
12.6%
34.3%
£713,698
20.0%
26.9%
40% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
£899,192
29.4%
7.1%
£640,463
21.4%
12.7%
£1,235,771
28.7%
9.9%
40% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
£639,857
23.7%
17.3%
£463,290
17.1%
24.1%
£974,735
24.8%
16.6%
50% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N.B. S.O. =Shared Ownership
Appendix II
Table1: Band 1 Scheme Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual Land Value from Adopted Policy Position
25 Unit - Flatted Scheme
Appraisal Type
25 Unit - Housing Scheme
25 Unit - Mixed Scheme
100 Unit Mixed Scheme
RLV
RLV as % of
GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in RLV
from Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
0% Affordable
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30% Affordable, 100% Rent
£555,280
16.5%
N/A
£1,157,915
23.9%
N/A
£874,216
21.3%
N/A
£3,239,917
19.1%
N/A
30% Affordable, S.O.
£878,629
23.0%
N/A
£1,746,275
30.9%
N/A
£1,299,982
27.7%
N/A
£4,726,062
24.7%
N/A
30% Affordable, 50% S.O. / 50%
Rent
£710,781
19.8%
N/A
£1,418,951
27.3%
N/A
£1,071,609
24.5%
N/A
£3,972,201
22.0%
N/A
35% Affordable, 100% Rent
£481,578
14.7%
13.3%
£1,026,516
22.1%
11.3%
£800,514
20.0%
8.4%
£2,686,138
16.7%
17.1%
35% Affordable, S.O.
£837,627
22.3%
4.7%
£1,688,833
30.3%
3.3%
£1,258,981
27.2%
3.2%
£4,438,917
23.7%
6.1%
35% Affordable, 50% S.O. / 50%
Rent
£637,078
18.3%
10.4%
£1,287,553
25.7%
9.3%
£997,907
23.4%
6.9%
£3,512,117
20.3%
11.6%
40% Affordable, 100% Rent
£388,566
12.4%
30.0%
£911,340
20.3%
21.3%
£645,800
17.1%
26.1%
£2,192,456
14.3%
32.3%
40% Affordable, S.O.
£785,658
21.3%
10.6%
£1,629,619
29.7%
6.7%
£1,180,295
26.1%
9.2%
£4,178,841
22.8%
11.6%
40% Affordable, 50% S.O. / 50%
Rent
£585,109
17.2%
17.7%
£1,230,731
24.9%
13.3%
£906,874
21.9%
15.4%
£3,179,921
18.9%
19.9%
50% Affordable, 100% Rent
£240,095
7.6%
56.8%
£623,535
15.2%
46.2%
£328,913
9.9%
62.4%
£1,146,563
8.3%
64.6%
50% Affordable, S.O.
£640,718
18.4%
27.1%
£1,506,076
28.3%
13.8%
£1,012,362
23.6%
22.1%
£3,631,627
20.7%
23.2%
50% Affordable, 50% S.O. / 50%
Rent
£399,236
12.7%
43.8%
£1,004,214
21.7%
29.2%
£642,558
17.0%
40.0%
£2,370,366
15.2%
40.3%
N.B. S.O. =Shared Ownership
Appendix II
Table 2: Band 2 Scheme Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual Land Value from Adopted Policy Position
5 Units - Housing Scheme
10 Unit - Housing Scheme
Appraisal Type
15 Unit - Housing Scheme
20 Unit - Flatted Scheme
20 Unit - Housing Scheme
RLV
RLV as %
of GDV
Reduction in RLV
from Current
Policy Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
0% Affordable
£615,768
42.3%
N/A
£1,226,934
42.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 100% Rent
£451,861
36.9%
26.6%
£910,684
37.3%
25.8%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, S.O.
£532,682
39.7%
13.5%
£1,070,424
40.2%
12.8%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
£984,944
35.3%
19.7%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30% Affordable, 100% Rent
N/A
N/A
N/A
£742,119
33.5%
39.5%
£1,084,841
32.8%
N/A
£915,258
27.1%
N/A
£1,579,981
33.1%
N/A
30% Affordable, S.O.
N/A
N/A
N/A
£997,000
38.9%
18.7%
£1,489,800
38.6%
N/A
£1,238,125
32.4%
N/A
£2,101,014
38.2%
N/A
30% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
£816,379
35.3%
33.5%
£1,233,361
35.1%
N/A
£1,076,691
29.9%
N/A
£1,835,560
35.7%
N/A
35% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
£916,276
29.8%
15.5%
£791,744
24.7%
13.5%
£1,414,414
31.1%
10.5%
35% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
£1,406,715
37.5%
5.6%
£1,174,404
31.5%
5.1%
£2,019,406
37.5%
3.9%
35% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
£1,064,796
32.5%
13.7%
£953,178
27.8%
11.5%
£1,674,930
34.1%
8.8%
40% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
£916,276
29.8%
15.5%
£700,657
22.8%
23.4%
£1,248,846
28.9%
21.0%
40% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
£1,406,715
37.5%
5.6%
£1,125,165
30.7%
9.1%
£1,937,798
36.7%
7.8%
40% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
£1,064,796
32.5%
13.7%
£882,823
26.7%
18.0%
£1,593,322
33.2%
13.2%
50% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N.B. S.O. =Shared Ownership
Appendix II
Table 2: Band 2 Scheme Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual Land Value from Adopted Policy Position
25 Unit - Flatted Scheme
Appraisal Type
25 Unit - Housing Scheme
25 Unit - Mixed Scheme
100 Unit Mixed Scheme
RLV
RLV as % of
GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in RLV
from Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
0% Affordable
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30% Affordable, 100% Rent
£1,063,465
26.1%
N/A
£1,896,483
32.3%
N/A
£1,499,139
30.2%
N/A
£5,636,218
27.5%
N/A
30% Affordable, S.O.
£1,496,606
32.0%
N/A
£2,585,435
37.9%
N/A
£2,061,208
35.9%
N/A
£7,608,729
32.4%
N/A
30% Affordable, 50% S.O. / 50%
Rent
£1,272,503
29.2%
N/A
£2,240,959
35.3%
N/A
£1,760,557
33.0%
N/A
£6,609,389
30.1%
N/A
35% Affordable, 100% Rent
£981,010
24.8%
7.8%
£1,730,916
30.7%
8.7%
£1,405,174
29.1%
6.3%
£4,934,714
25.4%
12.4%
35% Affordable, S.O.
£1,447,367
31.4%
3.3%
£2,503,828
37.3%
3.2%
£2,011,969
35.4%
2.4%
£7,259,798
31.6%
4.6%
35% Affordable, 50% S.O. / 50%
Rent
£1,178,537
27.8%
7.4%
£2,075,392
34.0%
7.4%
£1,666,592
32.1%
5.3%
£6,031,004
28.6%
8.8%
40% Affordable, 100% Rent
£857,497
22.6%
19.4%
£1,585,858
29.2%
16.4%
£1,210,058
26.5%
19.3%
£4,308,011
23.3%
23.6%
40% Affordable, S.O.
£1,383,646
30.6%
7.5%
£2,431,709
36.8%
5.9%
£1,915,879
34.6%
7.1%
£6,945,524
30.9%
8.7%
40% Affordable, 50% S.O. / 50%
Rent
£1,114,816
26.9%
12.4%
£2,009,356
33.3%
10.3%
£1,555,436
30.8%
11.7%
£5,619,780
27.4%
15.0%
50% Affordable, 100% Rent
£519,382
15.7%
51.2%
£1,221,668
24.8%
35.6%
£805,468
20.1%
46.3%
£2,983,058
18.0%
47.1%
50% Affordable, S.O.
£1,206,965
28.2%
19.4%
£2,255,096
35.4%
12.8%
£1,712,914
32.6%
16.9%
£6,281,313
29.2%
17.4%
50% Affordable, 50% S.O. / 50%
Rent
£878,342
23.0%
31.0%
£1,723,042
30.6%
23.1%
£1,223,784
26.7%
30.5%
£4,606,749
24.3%
30.3%
N.B. S.O. =Shared Ownership
Appendix II
Table 3: Band 3 Scheme Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual Land Value from Adopted Policy Position
5 Units - Housing Scheme
10 Unit - Housing Scheme
Appraisal Type
15 Unit - Housing Scheme
20 Unit - Flatted Scheme
20 Unit - Housing Scheme
RLV
RLV as %
of GDV
Reduction in RLV
from Current
Policy Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
0% Affordable
£810,969
47.1%
N/A
£1,612,575
47.4%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 100% Rent
£603,995
42.0%
25.5%
£1,225,894
42.7%
24.0%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, S.O.
£712,293
44.9%
12.2%
£1,427,337
45.3%
11.5%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
£1,319,039
43.9%
18.2%
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30% Affordable, 100% Rent
N/A
N/A
N/A
£1,018,920
39.3%
36.8%
£1,495,934
38.7%
N/A
£1,333,777
33.7%
N/A
£2,163,182
38.7%
N/A
30% Affordable, S.O.
N/A
N/A
N/A
£1,340,776
44.2%
16.9%
£2,007,119
43.9%
N/A
£1,743,736
38.5%
N/A
£2,822,961
43.4%
N/A
30% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
£1,112,065
40.9%
31.0%
£1,682,224
40.8%
N/A
£1,538,756
36.3%
N/A
£2,486,473
41.1%
N/A
35% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
£1,288,960
35.9%
13.8%
£1,184,314
31.6%
11.2%
£1,959,889
36.9%
9.4%
35% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
£1,908,443
43.1%
4.9%
£1,668,809
37.7%
4.3%
£2,726,040
42.8%
3.4%
35% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
£1,475,250
38.4%
12.3%
£1,389,294
34.5%
9.7%
£2,289,713
39.7%
7.9%
40% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
£1,288,960
35.9%
13.8%
£1,070,297
29.8%
19.8%
£1,756,596
35.0%
18.8%
40% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
£1,908,443
43.1%
4.9%
£1,610,700
37.1%
7.6%
£2,629,119
42.2%
6.9%
40% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
£1,475,250
38.4%
12.3%
£1,303,055
33.5%
15.3%
£2,192,792
38.9%
11.8%
50% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
50% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N.B. S.O. =Shared Ownership
Appendix II
Table 3: Band 3 Scheme Appraisal Types, Residual Land Value, RLV as % of GDV and Percentage Reduction in Residual Land Value from Adopted Policy Position
25 Unit - Flatted Scheme
Appraisal Type
25 Unit - Housing Scheme
25 Unit - Mixed Scheme
100 Unit Mixed Scheme
RLV
RLV as % of
GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as % of
GDV
Reduction in RLV
from Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
RLV
RLV as %
of GDV
Reduction in
RLV from
Current Policy
Position
0% Affordable
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 100% Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, S.O.
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
20% Affordable, 50% S.O. / 50%
Rent
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
30% Affordable, 100% Rent
£1,575,014
32.9%
N/A
£2,607,653
38.1%
N/A
£2,111,551
36.3%
N/A
£7,989,193
33.2%
N/A
30% Affordable, S.O.
£2,115,417
38.2%
N/A
£3,480,176
43.2%
N/A
£2,818,624
41.5%
N/A
£10,473,666
37.7%
N/A
30% Affordable, 50% S.O. / 50%
Rent
£1,835,902
35.7%
N/A
£3,043,915
40.8%
N/A
£2,439,856
38.9%
N/A
£9,173,244
35.5%
N/A
35% Affordable, 100% Rent
£1,460,997
31.6%
7.2%
£2,404,360
36.6%
7.8%
£1,997,534
35.3%
5.4%
£7,131,571
31.3%
10.7%
35% Affordable, S.O.
£2,057,308
37.7%
2.7%
£3,383,255
42.7%
2.8%
£2,760,516
41.1%
2.1%
£10,060,317
37.1%
3.9%
35% Affordable, 50% S.O. / 50%
Rent
£1,721,885
34.5%
6.2%
£2,840,622
39.6%
6.7%
£2,325,839
38.0%
4.7%
£8,469,622
34.2%
7.7%
40% Affordable, 100% Rent
£1,311,534
22.6%
16.7%
£2,227,849
35.2%
14.6%
£1,758,795
33.0%
16.7%
£6,364,795
29.5%
20.3%
40% Affordable, S.O.
£1,982,381
37.0%
6.3%
£3,298,233
42.2%
5.2%
£2,646,776
40.3%
6.1%
£9,687,532
36.4%
7.5%
40% Affordable, 50% S.O. / 50%
Rent
£1,646,958
33.7%
10.3%
£2,763,949
39.0%
9.2%
£2,193,472
37.0%
10.1%
£7,961,946
33.2%
13.2%
50% Affordable, 100% Rent
£898,592
23.4%
42.9%
£1,778,702
31.2%
31.8%
£1,264,974
27.3%
40.1%
£4,746,996
24.8%
40.6%
50% Affordable, S.O.
£1,774,418
35.0%
16.1%
£3,087,487
41.1%
11.3%
£2,406,724
38.7%
14.6%
£8,901,477
35.0%
15.0%
50% Affordable, 50% S.O. / 50%
Rent
£1,364,459
30.4%
25.7%
£2,412,824
36.7%
20.7%
£1,791,140
33.4%
26.6%
£6,735,091
30.4%
26.6%
N.B. S.O. =Shared Ownership
Appendix II
Table 4: Summary of Land Residual Value (as % of GDV) Appraisals for All Bands Showing Trends
5 Units - Housing Scheme
10 Unit - Housing Scheme
15 Unit - Housing Scheme
20 Unit - Flatted Scheme
20 Unit - Housing Scheme
Appraisal Type
Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
0% Affordable
35.7%
42.3%
47.1%
35.8%
42.7%
47.4%
20% Affordable, 100% Rent
28.8%
36.9%
42.0%
29.4%
37.3%
42.7%
20% Affordable, S.O.
33.4%
39.7%
44.9%
32.8%
40.2%
45.3%
20% Affordable, 50% S.O. / 50%
Rent
31.1%
35.3%
43.9%
30% Affordable, 100% Rent
25.3%
33.5%
39.3%
24.2%
32.8%
38.7%
17.6%
27.1%
33.7%
24.8%
33.1%
38.7%
30% Affordable, S.O.
31.2%
38.9%
44.2%
30.7%
38.6%
43.9%
23.5%
32.4%
38.5%
30.5%
38.2%
43.4%
30% Affordable, 50% S.O. / 50%
Rent
27.0%
35.3%
40.9%
26.8%
35.1%
40.8%
20.7%
29.9%
36.3%
27.7%
35.7%
41.1%
35% Affordable, 100% Rent
20.7%
29.8%
35.9%
14.9%
24.7%
31.6%
22.5%
31.1%
36.9%
35% Affordable, S.O.
29.4%
37.5%
43.1%
22.4%
31.5%
37.7%
29.7%
37.5%
42.8%
35% Affordable, 50% S.O. / 50%
Rent
23.7%
32.5%
38.4%
18.2%
27.8%
34.5%
25.9%
34.1%
39.7%
40% Affordable, 100% Rent
20.7%
29.8%
35.9%
12.6%
22.8%
29.8%
20.0%
28.9%
35.0%
40% Affordable, S.O.
29.4%
37.5%
43.1%
21.4%
30.7%
37.1%
28.7%
36.7%
42.2%
40% Affordable, 50% S.O. / 50%
Rent
23.7%
32.5%
38.4%
17.1%
26.7%
33.5%
24.8%
33.2%
38.9%
50% Affordable, 100% Rent
50% Affordable, S.O.
50% Affordable, 50% S.O. / 50%
Rent
N.B. S.O. =Shared Ownership
Appendix II
Table 4: Summary of Land Residual Value (as % of GDV) Appraisals for All Bands Showing Trends
25 Unit - Flatted Scheme
25 Unit - Housing Scheme
25 Unit - Mixed Scheme
100 Unit Mixed Scheme
Appraisal Type
Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV Band 1 RLV Band 2 RLV Band 3 RLV
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
as % of
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
GDV
0% Affordable
20% Affordable, 100% Rent
20% Affordable, S.O.
20% Affordable, 50% S.O. / 50%
Rent
30% Affordable, 100% Rent
16.5%
26.1%
32.9%
23.9%
32.3%
38.1%
21.3%
30.2%
36.3%
19.1%
27.5%
33.2%
30% Affordable, S.O.
23.0%
32.0%
38.2%
30.9%
37.9%
43.2%
27.7%
35.9%
41.5%
24.7%
32.4%
37.7%
30% Affordable, 50% S.O. / 50%
Rent
19.8%
29.2%
35.7%
27.3%
35.3%
40.8%
24.5%
33.0%
38.9%
22.0%
30.1%
35.5%
35% Affordable, 100% Rent
14.7%
24.8%
31.6%
22.1%
30.7%
36.6%
20.0%
29.1%
35.3%
16.7%
25.4%
31.3%
35% Affordable, S.O.
22.3%
31.4%
37.7%
30.3%
37.3%
42.7%
27.2%
35.4%
41.1%
23.7%
31.6%
37.1%
35% Affordable, 50% S.O. / 50%
Rent
18.3%
27.8%
34.5%
25.7%
34.0%
39.6%
23.4%
32.1%
38.0%
20.3%
28.6%
34.2%
40% Affordable, 100% Rent
12.4%
22.6%
22.6%
20.3%
29.2%
35.2%
17.1%
26.5%
33.0%
14.3%
23.3%
29.5%
40% Affordable, S.O.
21.3%
30.6%
37.0%
29.7%
36.8%
42.2%
26.1%
34.6%
40.3%
22.8%
30.9%
36.4%
40% Affordable, 50% S.O. / 50%
Rent
17.2%
26.9%
33.7%
24.9%
33.3%
39.0%
21.9%
30.8%
37.0%
18.9%
27.4%
33.2%
50% Affordable, 100% Rent
7.6%
15.7%
23.4%
15.2%
24.8%
31.2%
9.9%
20.1%
27.3%
8.3%
18.0%
24.8%
50% Affordable, S.O.
18.4%
28.2%
35.0%
28.3%
35.4%
41.1%
23.6%
32.6%
38.7%
20.7%
29.2%
35.0%
50% Affordable, 50% S.O. / 50%
Rent
12.7%
23.0%
30.4%
21.7%
30.6%
36.7%
17.0%
26.7%
33.4%
15.2%
24.3%
30.4%
N.B. S.O. =Shared Ownership
Appendix II
Table 5: Sample Appraisals showing Residual Land Values and RLV as Percentage of GDV Based on Free Land Mechanism of Affordable Housing Provision
5 Units - Housing Scheme
10 Unit - Housing Scheme
15 Unit - Housing Scheme
20 Unit - Flatted Scheme
20 Unit - Housing Scheme
RLV
RLV as %
of GDV
RLV
RLV as %
of GDV
RLV
RLV as %
of GDV
RLV
RLV as %
of GDV
Free Land 30% Affordable Band 1
£496,156
26.4%
Free Land 30% Affordable Band 2
£763,725
34.0%
Free Land 30% Affordable Band 3
£1,031,293
39.5%
Free Land 40% Affordable Band 1
£605,268
22.8%
£419,535
15.7%
£828,342
Free Land 40% Affordable Band 2
£959,487
30.6%
£757,517
24.0%
Free Land 40% Affordable Band 3
£1,313,706
36.3%
£1,099,825
30.3%
25 Unit - Flatted Scheme
25 Unit - Housing Scheme
25 Unit - Mixed Scheme
100 Unit Mixed Scheme
Appraisal Type
RLV
RLV as %
of GDV
Free Land 20% Affordable Band 1
£304,016
29.6%
Free Land 20% Affordable Band 2
£459,880
37.2%
Free Land 20% Affordable Band 3
£609,395
42.1%
RLV
RLV as % of
GDV
RLV
RLV as %
of GDV
22.2%
£506,071
£1,317,954
29.9%
£1,807,566
35.5%
RLV
RLV as %
of GDV
RLV
RLV as %
of GDV
15.3%
£1,051,116
22.4%
£775,013
19.6%
£2,694,384
16.7%
£926,941
23.9%
£1,668,392
30.1%
£1,287,072
27.6%
£4,628,979
24.4%
£1,347,811
30.2%
£2,285,668
35.7%
£1,799,130
33.4%
£6,563,575
30.0%
Appendix II
Table 6: Sample Appraisals showing Residual Land Values and RLV as Percentage of GDV Based on 70% GN Rent / 30% Shared Ownership Tenure Split
25 Unit - Flatted Scheme
25 Unit - Housing Scheme
25 Unit - Mixed Scheme
100 Unit Mixed Scheme
Appraisal Type
RLV
RLV as % of
GDV
RLV
RLV as %
of GDV
RLV
RLV as %
of GDV
RLV
RLV as %
of GDV
30% Affordable, 30% S.O. / 70%
Rent - Band 1
N/A
N/A
N/A
N/A
N/A
N/A
£3,707,581
21.0%
30% Affordable, 30% S.O. / 70%
Rent - Band 2
N/A
N/A
N/A
N/A
N/A
N/A
£5,967,501
28.4%
30% Affordable, 30% S.O. / 70%
Rent - Band 3
N/A
N/A
N/A
N/A
N/A
N/A
£8,227,420
33.7%
40% Affordable, 30% S.O. / 70%
Rent - Band 1
£495,011
15.1%
£1,086,944
15.1%
£768,599
19.5%
£2,807,758
17.3%
40% Affordable, 30% S.O. / 70%
Rent - Band 2
£915,881
23.7%
£1,704,221
23.7%
£1,280,657
27.5%
£4,731,509
24.7%
40% Affordable, 30% S.O. / 70%
Rent - Band 3
£1,336,751
30.0%
£2,321,497
36.0%
£1,792,716
33.4%
£6,655,260
30.2%
50% Affordable, 30% S.O. / 70%
Rent - Band 1
N/A
N/A
N/A
N/A
N/A
N/A
£1,944,693
13.0%
50% Affordable, 30% S.O. / 70%
Rent - Band 2
N/A
N/A
N/A
N/A
N/A
N/A
£3,553,964
20.4%
50% Affordable, 30% S.O. / 70%
Rent - Band 3
N/A
N/A
N/A
N/A
N/A
N/A
£5,163,235
26.1%
Appendix II
Graph 1: 5 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 1
£450,000
£400,000
Residual Land Value (£)
£350,000
£300,000
£250,000
£200,000
£150,000
£100,000
£50,000
£0
0% Affordable
100% Rent
0% Affordable
S.O.
20% Affordable
Policy Options
Appendix II
Graph 2: 5 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 2
£700,000
£600,000
Residual Land Value (£)
£500,000
£400,000
£300,000
£200,000
£100,000
£0
0% Affordable
100% Rent
0% Affordable
S.O.
20% Affordable
Policy Options
Appendix II
Graph 3: 5 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 3
£900,000
£800,000
Residual Land Value (£)
£700,000
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
0% Affordable
100% Rent
0% Affordable
S.O.
20% Affordable
Policy Options
Appendix II
Graph 4: 10 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 1
£900,000
£800,000
Residual Land Value (£)
£700,000
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
0% Affordable
0% Affordable
100% Rent
S.O.
50% S.O. / 50% Rent
20% Affordable
100% Rent
S.O.
50% S.O. / 50% Rent
30% Affordable
Policy Options
Appendix II
Graph 5: 10 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 2
£1,400,000
£1,200,000
Residual Land Value (£)
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
0% Affordable
0% Affordable
100% Rent
S.O.
50% S.O. / 50%
Rent
20% Affordable
100% Rent
S.O.
50% S.O. / 50%
Rent
30% Affordable
Policy Options
Appendix II
Graph 6: 10 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 3
£1,800,000
£1,600,000
Residual Land Value (£)
£1,400,000
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
0% Affordable
0% Affordable
100% Rent
S.O.
50% S.O. / 50%
Rent
20% Affordable
100% Rent
S.O.
50% S.O. / 50%
Rent
30% Affordable
Policy Options
Appendix II
Graph 7: 15 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 1
£1,200,000
Residual Land Value (£)
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 8: 15 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 2
£1,600,000
£1,400,000
Residual Land Value (£)
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 9: 15 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 3
£2,500,000
Residual Land Value (£)
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 10: 20 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Band 1
£800,000
£700,000
Residual Land Value (£)
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 11: 20 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Band 2
£1,400,000
£1,200,000
Residual Land Value (£)
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 12: 20 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Band 3
£2,000,000
£1,800,000
Residual Land Value (£)
£1,600,000
£1,400,000
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 13: 20 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 1
£1,600,000
£1,400,000
Residual Land Value (£)
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 14: 20 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 2
£2,500,000
Residual Land Value (£)
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 15: 20 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 3
£3,000,000
Residual Land Value (£)
£2,500,000
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100% Rent
S.O.
30% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
35% Affordable
50% S.O. /
50% Rent
100% Rent
S.O.
50% S.O. /
50% Rent
40% Affordable
Policy Options
Appendix II
Graph 16: 25 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Band 1
£1,000,000
£900,000
Residual Land Value (£)
£800,000
£700,000
£600,000
£500,000
£400,000
£300,000
£200,000
£100,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 17: 25 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Band 2
£1,600,000
£1,400,000
Residual Land Value (£)
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 18: 25 Unit Flatted Scheme - Residual Land Values at Potential Policy Options - Band 3
£2,500,000
Residual Land Value (£)
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 19: 25 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 1
£2,000,000
£1,800,000
Residual Land Value (£)
£1,600,000
£1,400,000
£1,200,000
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 20: 25 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 2
£3,000,000
Residual Land Value (£)
£2,500,000
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 21: 25 Unit Housing Scheme - Residual Land Values at Potential Policy Options - Band 3
£4,000,000
£3,500,000
Residual Land Value (£)
£3,000,000
£2,500,000
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 22: 25 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Band 1
£1,400,000
£1,200,000
Residual Land Value (£)
£1,000,000
£800,000
£600,000
£400,000
£200,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 23: 25 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Band 2
£2,500,000
Residual Land Value (£)
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 24: 25 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Band 3
£3,000,000
Residual Land Value (£)
£2,500,000
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 25: 100 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Band 1
£5,000,000
£4,500,000
Residual Land Value (£)
£4,000,000
£3,500,000
£3,000,000
£2,500,000
£2,000,000
£1,500,000
£1,000,000
£500,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 26: 100 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Band 2
£8,000,000
£7,000,000
Residual Land Value (£)
£6,000,000
£5,000,000
£4,000,000
£3,000,000
£2,000,000
£1,000,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 27: 100 Unit Mixed Scheme - Residual Land Values at Potential Policy Options - Band 3
£12,000,000
Residual Land Value (£)
£10,000,000
£8,000,000
£6,000,000
£4,000,000
£2,000,000
£0
100%
Rent
S.O.
50% S.O. /
50% Rent
30% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
100%
Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
40% Affordable
100%
Rent
S.O.
50% S.O. /
50% Rent
50% Affordable
Policy Options
Appendix II
Graph 1a: 5 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
40.0%
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0% Affordable
0% Affordable
100% Rent
20% Affordable
S.O.
Policy Options
Appendix II
Graph 2a: 5 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
45.0%
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0% Affordable
0% Affordable
100% Rent
20% Affordable
S.O.
Policy Options
Appendix II
Graph 3a: 5 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
50.0%
45.0%
Residual Land Value (% of GDV)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0% Affordable
0% Affordable
100% Rent
20% Affordable
S.O.
Policy Options
Appendix II
Graph 4a: 10 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
40.0%
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0% Affordable
0% Affordable
100% Rent
20% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
30% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 5a: 10 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
45.0%
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0% Affordable
0% Affordable
100% Rent
20% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
30% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 6a: 10 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
50.0%
45.0%
Residual Land Value (% of GDV)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
0% Affordable
0% Affordable
100% Rent
20% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
30% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 7a: 15 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 8a: 15 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
45.0%
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 9a: 15 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
50.0%
45.0%
Residual Land Value (% of GDV)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 10a: 20 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
25.0%
Residual Land Value (% of GDV)
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 11a: 20 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
45.0%
Graph 12a: 20 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 13a: 20 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential
Policy Options - Band 1
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 14a: 20 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential
Policy Options - Band 2
45.0%
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 15a: 20 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential
Policy Options - Band 3
50.0%
45.0%
Residual Land Value (% of GDV)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 16a: 25 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
25.0%
Residual Land Value (% of GDV)
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 17a: 25 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 18a: 25 Unit Flatted Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
45.0%
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 19a: 25 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential
Policy Options - Band 1
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 20a: 25 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential
Policy Options - Band 2
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 21a: 25 Unit Housing Scheme - Residual Land Values as Percentage of GDV at Potential
Policy Options - Band 3
50.0%
45.0%
Residual Land Value (% of GDV)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 22a: 25 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
30.0%
Residual Land Value (% of GDV)
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 23a: 25 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 24a: 25 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
45.0%
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 25a: 100 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 1
30.0%
Residual Land Value (% of GDV)
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 26a: 100 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 2
35.0%
Residual Land Value (% of GDV)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 27a: 100 Unit Mixed Scheme - Residual Land Values as Percentage of GDV at Potential Policy
Options - Band 3
40.0%
Residual Land Value (% of GDV)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
30%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
35%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
40%
Affordable
S.O.
50% S.O. / 100% Rent
50% Rent
50%
Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 1b: 5 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Band 1
35.0%
Reduction in Residual Land Value (%)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
20% Affordable
S.O.
Policy Options
Appendix II
Graph 2b: 5 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Band 2
30.0%
Reduction in Residual Land Value (%)
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
20% Affordable
S.O.
Policy Options
Appendix II
Graph 3b: 5 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Band 3
30.0%
Reduction in Residual Land Value (%)
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
20% Affordable
S.O.
Policy Options
Appendix II
Graph 4b: 10 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
50.0%
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
20% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
30% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 5b: 10 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
45.0%
40.0%
Reduction in Residual Land Value (%)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
20% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
30% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 6b: 10 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
40.0%
Reduction in Residual Land Value (%)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
20% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
30% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 7b: 15 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
25.0%
Reduction in Residual Land Value (%)
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 8b: 15 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
18.0%
Reduction in Residual Land Value (%)
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 9b: 15 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
16.0%
Reduction in Residual Land Value (%)
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 10b: 20 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
40.0%
Reduction in Residual Land Value (%)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 11b: 20 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
25.0%
Reduction in Residual Land Value (%)
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
25.0%
Graph 12b: 20 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
Reduction in Residual Land Value (%)
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 13b: 20 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
30.0%
Reduction in Residual Land Value (%)
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 14b: 20 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
25.0%
Reduction in Residual Land Value (%)
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 15b: 20 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
20.0%
18.0%
Reduction in Residual Land Value (%)
16.0%
14.0%
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. / 50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. / 50% Rent
Policy Options
Appendix II
Graph 16b: 25 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
60.0%
Reduction in Residual Land Value (%)
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 17b: 25 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
60.0%
Reduction in Residual Land Value (%)
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 18b: 25 Unit Flatted Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
50.0%
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 19b: 25 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
50.0%
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 20b: 25 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
40.0%
Reduction in Residual Land Value (%)
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 21b: 25 Unit Housing Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
35.0%
Reduction in Residual Land Value (%)
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 22b: 25 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Band 1
70.0%
Reduction in Residual Land Value (%)
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 23b: 25 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Band 2
50.0%
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 24b: 25 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to Range
of Potential Policy Options - Band 3
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 25b: 100 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 1
70.0%
Reduction in Residual Land Value (%)
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 26b: 100 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 2
50.0%
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
Graph 27b: 100 Unit Mixed Scheme - Reduction in Residual Land Value from Adopted Policy to
Range of Potential Policy Options - Band 3
45.0%
Reduction in Residual Land Value (%)
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
100% Rent
35% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
40% Affordable
S.O.
50% S.O. /
50% Rent
100% Rent
50% Affordable
S.O.
50% S.O. /
50% Rent
Policy Options
Appendix II
APPENDIX III
Chiltern Property Values Report
APPENDIX III
Property Values Report for Chiltern District – Viability Study Background
Introduction
Adams Integra was asked to prepare a study that investigated the impact of potential
lowered thresholds and increased proportions of affordable housing on residential
development viability. As part of that study, research was required to determine the level
of new build values across Chiltern District. As context for the viability study work, we
needed to understand the level and range of values encountered so as to make
judgements as to the figures most appropriate to use in our appraisal modelling.
It is the new build values that are of key relevance to the viability study, given that such
schemes are the supply source of the planning-led affordable housing being considered.
In addition to new build sales rates and for general background purposes, desktop
research was undertaken to ascertain the state of the overall housing market in Chiltern
District including existing values (re-sale values).
The initial desktop research involved looking at an overview of values in different
locations across Chiltern using internet property websites (for example RightMove) and
Land Registry data. A market overview has also been included from market reports
provided by the RICS and Land Registry.
New Build Data
The new build data was collated through on the ground and desktop research. The site
research included travelling throughout the District (on one occasion with a member of
the Council’s planning team) to view new developments and speak to sales agents on
site for those new build developments that had sales offices. Where this was not
possible, the sales agents were contacted by telephone.
A review of new build sale prices of all available unit types at the time of the study
research (October 2006) across the District enabled us to underpin our judgements on
the various value levels (‘points’) for the range of dwelling types to be used in our
appraisal modelling.
Our findings lead us to the conclusion that values were lower in parts of Chesham than
other parts of the District and that the highest values were most likely to be seen in
locations such as parts of Amersham, Chalfont St Giles, Seer Green and Penn. In
addition to speaking to on-site sales agents, Adams Integra also requested opinions
from estate agents located in Chalfont St Peter, Chesham and Amersham (25 October
2006) with regard to new build sales values and indicative sales rates per sq m, across
the District as far as possible. They provided average new build sales values per square
Appendix III
1
foot (many developers and agents work in that particular way for comparison purposes)
that agreed with our views on property values. Those were consistent figures of £3,250£3,500 per m2 (converted from £ per sq ft rates) within the District with a slightly lower
figure of £3,000 per m2 applicable in some areas of Chesham.
The results of the new build property value research led to the formation of 3 value
points within which range we consider most areas of the District fall. As most areas have
a variety of property values, the results of this research can be used independently of
location where approximate sales values can be estimated.
In the background to this, resale and Land Registry data helps provide an overview of
the property market in the District and shows the relative differences in values across the
District. Thus we can develop a wider understanding of the local market. We undertook a
desktop/internet research exercise to obtain resale property values to verify and
supplement the new build property values research.
The new build data and information collected from estate agents allows us to apply sales
values to each unit type in each value band for the residual land value appraisal
modelling.
Housing Market Overview
In October 2006 RICS (Royal Institution of Chartered Surveyors) published a Housing
Market Survey which stated that house prices rose for a twelfth consecutive month in
October, up at the fastest pace since September 2002. Price rises continue to be driven
by a combination of increased new buyer enquiries and declining property supply.
Surveyor’s confidence in the sales outlook dropped back for the third consecutive month
as they anticipated a slowdown due to rising interest rates. However, the rising interest
rate environment is yet to hurt the outlook for prices according to surveyors. Optimism
continued to rise in October as the stock of unsold property on the market fell to the
lowest level since August 2004.
The strongest rises in prices are in London and the South of England on the back of
booming city economy.
The Halifax House Price Index for the third quarter 2006 states house prices rose by
1.5% in Q3 2006 in the South East. The annual rate of house price inflation in the South
East is 7.7%, slightly below the UK average of 8.0%. Over the past five years prices
have risen by approximately 60%.
Update at the time of concluding the study: The original research for this study
commenced in October 2006. The property values used in the study have been based
Appendix III
2
on this information. Since that date prices have been steadily rising and more recent
market overview information is as follows:
Royal Institution of Chartered Surveyors (RICS)
“House prices gained further momentum in April despite increased supply triggered by
the forthcoming introduction of HIPS (Home Information Packs)”, says RICS' UK housing
market survey published today (15 May 2007).
“House prices rose for the eighteenth consecutive month in April driven primarily by
renewed momentum in London, the South East and East Anglia. 28.9% more Chartered
Surveyors reported a rise than a fall in house prices, up from 26.9% in March. The pace
of increase remains above the long run average of 21.6% indicating that the housing
market is still in rude health.
New instructions to sell property rose for the second consecutive month after the longest
decline in seven years. The pick up appears to be closely related to the planned
introduction of HIPS rather than any decline in the state of household finances.
Surveyors report that increasing numbers of sellers are listing their properties early in
order to avoid the upfront cost of assembling the pack.
Consequently, the stock of unsold property on surveyors' books increased for the first
time since last November. As sales per surveyor slowed, the ratio of completed sales to
the stock of available property on the market fell for the first time since last May.
New buyer enquiries declined for the fifth consecutive month and at a faster pace,
indicating that recent interest rate hikes are weighing heavily on buyer affordability. 11%
more Chartered Surveyors reported a fall than a rise in new buyer enquiries compared to
8% in March.
Yet again the strongest house price growth took place in Northern Ireland and Scotland
with London again leading the way in England. Price rises also increased more firmly in
East Anglia and the North West, but prices fell mildly in the East and West Midlands.”
RICS UK housing market survey, April 2007
Land Registry
The Land Registry House price Index April 2007, released 30 May 2007, states as its
headlines:
“House price change in England and Wales remained positive for residential property
transactions that completed in April 2007.
Appendix III
3
Although the monthly rate of increase is slightly less than the previous month, the
change of 0.6 per cent raises the average house price to £179,935 (England & Wales
overall – our clarification) in this month. The annual change in house prices is 9.1 per
cent.
The data for this month continues to show one of the highest annual increases in almost
two years. A year ago, in April 2006, the annual price change was 4.1 per cent, less than
half the …..annual price change in April 2007.”
The detail of the Index reveals that the price of flats/maisonettes have risen the fastest
overall (10.2% over the last year) while detached houses showed the smallest annual
increase, overall, of 7.5%.
Regionally, London showed the steepest increase – 2.3% for the month; 15.6% over the
last year. The monthly change in South East prices was 1.0% and annual change 9.6%.
In the Chiltern context, the Index shows Buckinghamshire prices rose at 1.3% during the
month and 9.8% over the year since April 2006, a rise in excess of both the England and
Wales and South East Regional figures. The average house price in Buckinghamshire
according the Land Registry currently stands at £262,780.
Land Registry Historical Data
Before conducting our field research, a comparison was made using Land Registry (the
Government department that records land ownership in England and Wales) historical
data for the areas within Chiltern District to help determine the likely hierarchy of values.
Every quarter, the Land Registry supply average prices for different property types.
These averages cover about 80% of all domestic property sales in England and Wales.
The average price by property type is calculated by dividing total sales revenue for each
type of property by the number of units sold.
The comparison was based on July to September 2006 figures for sales completions of
all property types (not just new build). These values are shown below by ‘Overall’
property type, flats, terraced, semi-detached and detached housing.
Appendix III
4
Property Type
Detached
Area (by
postcode)
Semi-Detached
Terraced
Flats/Maisonettes
Overall
Average
Price (£)
Sales
Average
Price (£)
Sales
Average
Price (£)
Sales
Average
Price (£)
Sales
Average
Price (£)
Sales
HP23 4
428,321
14
322,000
15
216,996
13
0
0
324,939
42
HP23 5
464,605
9
271,704
12
213,142
24
0
0
279,051
45
HP23 6
699,250
10
265,562
8
242,192
7
0
0
432,493
25
HP5 1
459,250
6
323,320
17
215,973
21
157,880
5
277,077
49
HP5 2
396,860
15
296,663
17
185,883
9
136,500
6
286,981
47
HP5 3
500,653
13
266,350
15
219,868
16
136,161
9
287,680
53
HP16 0
541373
18
325,859
11
272,750
10
0
0
411,709
39
HP16 9
687,605
19
381,000
5
0
0
0
0
623,728
24
HP15 6
450,707
19
283,788
9
207,690
5
0
0
368,362
33
HP7 0
518,516
6
343,875
4
401,237
4
232,254
6
374,253
20
HP6 5
741,463
15
0
0
302,062
4
270,487
4
583,136
23
WD3 6
627,500
3
0
0
322,100
5
0
0
436,625
8
HP8 4
883,421
38
382,750
8
296,583
6
0
0
738,682
52
HP10 8
806,593
16
347,612
4
0
0
298,926
7
606,978
27
HP9 1
866,438
25
358,928
7
0
0
0
0
755,420
32
HP9 2
788,234
32
390,317
11
0
0
483,600
5
665,311
48
SL9 9
532,972
22
332,166
6
247,333
3
201,000
3
443,040
34
HP7 9
396,150
16
294,361
9
212,421
7
163,333
3
313,274
35
HP6 6
502,432
20
297,236
13
273,485
7
176,780
5
371,355
45
SL9 0
473,975
22
0
0
0
0
0
0
473,975
22
HP5 1
459,250
6
323,320
17
215,973
21
157,880
5
277,077
49
Property Values Table (Source: Land Registry)
Appendix III
5
Areas
HP23
HP5
HP5 2
HP5 3
HP16
HP16 0
HP16 9
HP15 6
HP7 0
HP6 5
WD3 6
HP8 4
HP10 8
HP9 1
HP9 2
SL9 9
HP7 9
HP6 6
SL9 0
SL9 8
HP5 1
NOTE:
Cholesbury, St Leonards
Chesham, Ley Hill,
Asheridge, Bellingdon, Chartridge, Hawridge
Ashley Green
Hyde End
Great Missenden, Prestwood, Little Kingshill, South Heath
Ballinger, South Heath, The Lee, Great Missenden
Great Kingshill, Holmer Green
Little Missenden, Amersham, Winchmore Hill, Coleshill, Amersham
Hyde Heath, Chesham Bois, Little Chalfont, Amersham
Chenies
Chalfont St Giles
Penn
Knotty Green, Forty Green
Seer Green, Jordans
Chalfont St Peter
Amersham, Little Chalfont
Amersham, Chesham Bois, Little Chalfont
Chalfont St Peter
Chalfont St Peter
Latimer
No data available for HP5 0 (Latimer)
The Overall average values in the table above suggest the following neighbourhoods as
the lower priced areas;
1.
2.
3.
4.
5.
Latimer
Cholesbury, St Leonards
Chesham, Ley Hill
Asheridge, Bellingdon, Chartridge, Hawridge
Ashley Green
The suggested higher priced areas are;
1.
2.
3.
4.
5.
Ballinger, South Heath, The Lee, Great Missenden
Chalfont St Giles
Penn
Knotty Green, Forty Green
Seer Green, Jordans
Appendix III
6
The data suggests a limited number of sales of flats and maisonettes.
Although this data provides an overview of values within Chiltern District, it is only
representative of a snapshot in time and there may be a lack of sales information for
some property types and areas.
Resale Property Values
We studied the resale market as a whole to further understand the range of and any
pattern in values. Twenty-eight settlements were covered by this element of the
research, although a third of all residents live in Chesham and Amersham. The tables
below show data collected from www.rightmove.co.uk. The values collected from
RightMove are necessarily asking prices and “subject to contract” prices and as such it
is likely that actual sales values may be marginally less. Each table shows the data as
average, minimum, 1st quartile, median (2nd quartile), 3rd quartile and maximum so that it
can be considered in a number of ways.
Appendix III
7
1
Source: Chiltern District Council
No data was found for Cholesbury, Jordans, Chenies, St Leonard, Asheridge, or Hyde
End. It is not unusual to find this in smaller settlements.
Appendix III
8
Chesham: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
3rd
Quartile
1-bed
£131,698 £109,950 £120,000 £132,500 £137,500
Flats
2-Bed
£173,616 £137,500 £159,500 £165,000 £169,950
Flats
1-Bed
House £175,760 £149,950 £154,950 £185,000 £189,950
2-Bed
Houses £215,337 £164,950 £189,950 £210,000 £224,950
3-Bed
Houses £258,163 £164,950 £209,950 £247,950 £295,000
4-Bed
Houses £370,708 £200,000 £319,500 £379,950 £415,000
5+Bed
Houses £405,385 £265,000 £334,950 £399,950 £470,000
Data Sourced from: www.rightmove.co.uk – October 2006
Maximum
£155,000
£244,950
£198,950
£325,000
£429,950
£487,500
£495,000
Amersham: Average Property Value
Overall
Average
1-bed
Flats
2-Bed
Flats
3-Bed
Flats
1-Bed
House
2-Bed
Houses
3-Bed
Houses
4-Bed
Houses
Minimum
1st
Quartile
Median
3rd
Quartile
Maximum
£184,522 £149,950 £159,950 £174,950 £194,750
£239,950
£260,988 £160,000 £196,225 £285,000 £302,450
£350,000
£307,488 £195,000 £205,000 £299,950 £395,000
£450,000
£179,950 No data
No data
No data
No data
No data
£278,030 £215,000 £226,875 £279,475 £302,500
£350,000
£335,135 £275,000 £295,000 £339,950 £377,475
£925,000
£514,658 £325,000 £395,000 £472,475 £590,000
£1,175,000
5+Bed
Houses £635,613 £369,950 £379,950 £595,000 £685,000
Data Sourced from: www.rightmove.co.uk – October 2006
£1,150,000
Appendix III
9
Chalfont St. Giles: Average Property Value
Overall
Average
£179,97
5
£194,00
0
Minimum
1st
Quartile
Median
1-bed
No data
No data
No data
Flats
2-Bed
No data
No data
No data
Flats
3-Bed
No data No data
No data
No data
Flats
1-Bed
House
No data No data
No data
No data
2-Bed
£321,22
£265,000
£282,475
£319,950
Houses
5
3-Bed
£334,73
£235,000
£295,000
£365,000
Houses
3
4-Bed
£653,80
£429,950
£496,213
£585,000
Houses
9
5+Bed
£971,84
£585,000
£708,750
£897,500
Houses
2
Data Sourced from: www.rightmove.co.uk – October 2006
3rd Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
£359,975
£380,000
£395,000
£450,000
£687,500
£1,500,000
£1,212,500
£1,850,000
Great Missenden: Average Property Value
Overall
Average
1st
Minimum Quartile
1-bed
Flats
£174,967 No data No data
2-Bed
£179,950 No data No data
Flats
3-Bed
£169,959 No data No data
Flats
1-Bed
House £189,950 No data No data
2-Bed
Houses £265,780 £199,950 £239,950
3-Bed
Houses £396,096 £225,000 £246,950
4-Bed
Houses £643,838 £319,950 £375,000
5+Bed
Houses £793,900 £369,000 £662,500
Data Sourced from: www.rightmove.co.uk
Appendix III
Median
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£255,000 £259,000 £375,000
£319,950 £400,000 £845,000
£520,000 £699,980 £1,395,000
£725,000 £825,000 £1,450,000
– October 2006
10
Chalfont St Peter: Average Property Value
Overall
Average
1st
Minimum Quartile
1-bed
Flats
£189,950 No data No data
2-Bed
£221,359 £175,000 £189,850
Flats
3-Bed
£574,975 No data No data
Flats
1-Bed
House No data No data No data
2-Bed
Houses £252,054 £189,950 £232,463
3-Bed
Houses £391,212 £250,000 £341,463
4-Bed
Houses £542,093 £395,000 £450,000
5+Bed
Houses £862,667 £525,000 £775,000
Data Sourced from: www.rightmove.co.uk
Median
3rd
Quartile
Maximum
No data
No data
No data
£203,875 £220,000 £325,000
No data
No data
No data
No data
No data
No data
£252,475 £265,000 £349,950
£367,000 £438,713 £650,000
£499,950 £595,000 £1,000,000
£822,500 £896,250 £1,250,000
– October 2006
Ballinger: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
No data
No data
No data
No data No data
Flats
1-Bed
No data
No data
No data No data
House No data
2-Bed
Houses £350,000 No data
No data
No data No data
3-Bed
No data
No data No data
Houses £385,000 No data
4-Bed
No data
No data No data
Houses £637,500 No data
5+Bed
No data
No data
No data No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
11
The Lee: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
No data
No data
No data
No data No data
Flats
1-Bed
House No data
No data
No data
No data No data
2-Bed
No data
No data No data
Houses £337,500 No data
3-Bed
No data
No data No data
Houses £350,000 No data
4-Bed
No data
No data
No data No data
Houses No data
5+Bed
No data
No data
No data No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
Bellingdon: Average Property Value
Overall
Average
1st
Minimum Quartile
1-bed
Flats
No data No data No data
2-Bed
No data No data No data
Flats
3-Bed
No data No data No data
Flats
1-Bed
House No data No data No data
2-Bed
Houses No data No data No data
3-Bed
Houses £325,000 No data No data
4-Bed
Houses £722,500 No data No data
5+Bed
Houses No data No data No data
Data Sourced from: www.rightmove.co.uk
Appendix III
Median
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data No data
– October 2006
No data
12
Hawridge: Average Property Value
Overall
Average
1st
Minimum Quartile
1-bed
Flats
No data No data No data
2-Bed
No data No data No data
Flats
3-Bed
No data No data No data
Flats
1-Bed
House No data No data No data
2-Bed
Houses No data No data No data
3-Bed
Houses £345,000 No data No data
4-Bed
Houses No data No data No data
5+Bed £1,000,00
Houses 0
No data No data
Data Sourced from: www.rightmove.co.uk
Median
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data No data
– October 2006
No data
Ashley Green: Average Property Value
Overall
Average
1st
Minimum Quartile
3rd
Quartile
Median
1-bed
Flats
No data
No data
No data
No data No data
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
No data
No data
No data
No data No data
Flats
1-Bed
No data
No data
No data No data
House No data
2-Bed
No data
No data No data
Houses £212,000 No data
3-Bed
No data
No data No data
Houses £333,950 No data
4-Bed
Houses £435,000 No data
No data
No data No data
5+Bed
No data
No data No data
Houses £829,950 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
13
Ley Hill: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
Flats
No data
No data
No data
No data No data
1-Bed
No data
No data No data
House £230,000 No data
2-Bed
No data
No data
No data No data
Houses No data
3-Bed
No data
No data No data
Houses £229,950 No data
4-Bed
No data
No data
No data No data
Houses No data
5+Bed
No data
No data No data
Houses £599,950 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
Latimer: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
Flats
No data
No data
No data
No data No data
1-Bed
No data
No data
No data No data
House No data
2-Bed
No data
No data
No data No data
Houses No data
3-Bed
No data
No data No data
Houses £280,000 No data
4-Bed
No data
No data No data
Houses £460,000 No data
5+Bed
No data
No data
No data No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
14
Little Chalfont: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data
No data
Flats
2-Bed
£285,000 No data
No data
No data
No data
Flats
3-Bed
Flats
No data
No data
No data
No data
No data
1-Bed
No data
No data
No data
No data
House No data
2-Bed
No data
No data
No data
Houses £222,000 No data
3-Bed
Houses £313,317 £275,000 £280,000 £379,950 £417,500
4-Bed
No data
No data
No data
Houses £463,333 No data
5+Bed
No data
No data
No data
Houses £685,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Maximum
No data
No data
No data
No data
No data
£895,000
No data
No data
Seer Green: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
£285,000
No data
No data
No data No data
Flats
3-Bed
Flats
No data
No data
No data
No data No data
1-Bed
No data
No data
No data No data
House No data
2-Bed
No data
No data
No data No data
Houses £282,317
3-Bed
No data
No data
No data No data
Houses £484,286
4-Bed
No data
No data
No data No data
Houses £572,833
5+Bed
No data
No data No data
Houses £1,140,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
15
Coleshill: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
Flats
£475,000 No data
No data
No data No data
1-Bed
No data
No data
No data No data
House No data
2-Bed
No data
No data
No data No data
Houses No data
3-Bed
No data
No data No data
Houses £350,000 No data
4-Bed
No data
No data No data
Houses £975,000 No data
5+Bed
No data
No data No data
Houses £895,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
Holmer Green: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data
No data
Flats
2-Bed
£217,450 No data
No data
No data
No data
Flats
3-Bed
Flats
No data
No data
No data
No data
No data
1-Bed
No data
No data
No data
No data
House No data
2-Bed
No data
No data
No data
Houses £281,863 No data
3-Bed
Houses £289,332 £198,000 £252,450 £282,450 £321,250
4-Bed
No data
No data
No data
Houses £445,693 No data
5+Bed
No data
No data
No data
Houses £650,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
Maximum
No data
No data
No data
No data
No data
£350,000
No data
No data
16
Winchmore Hill: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
1-bed
No data
No data
No data
No data No data
Flats
2-Bed
No data
No data
No data
No data No data
Flats
3-Bed
Flats
No data
No data
No data
No data No data
1-Bed
No data
No data
No data No data
House No data
2-Bed
No data
No data No data
Houses £234,950 No data
3-Bed
No data
No data No data
Houses £335,000 No data
4-Bed
No data
No data No data
Houses £491,667 No data
5+Bed
No data
No data
No data No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
Penn: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
1-bed
£295,000
No data
No data
No data
Flats
2-Bed
£265,970
No data
No data
No data
Flats
3-Bed
Flats
No data
No data
No data
No data
1-Bed
No data
No data
No data
House £299,950
2-Bed
No data
No data
No data
Houses £312,500
3-Bed
£239,950 £249,950
£320,000
Houses £388,100
4-Bed
£379,950 £418,750
£449,975
Houses £550,990
5+Bed
Houses £1,580,000 £875,000 £1,125,000 £1,650,000
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£415,000
£595,000
£578,750
£1,250,000
£1,750,000 £2,500,000
17
Little Missenden: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
No data
No data
No data
No data
Flats
1-Bed
House No data
No data
No data
No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
Houses £400,000 No data
4-Bed
No data
No data
Houses £750,000 No data
5+Bed
No data
No data
Houses £897,500 No data
Data Sourced from: www.rightmove.co.uk – October 2006
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
Knotty Green: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
£499,000
No data
No data
No data
Flats
3-Bed
No data
No data
No data
No data
Flats
1-Bed
House No data
No data
No data
No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
No data
Houses £780,000
4-Bed
No data
No data
No data
Houses £655,000
5+Bed
Houses £1,235,000 £875,000 £997,500 £1,175,000
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£1,450,000 £1,700,000
18
Forty Green: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
No data
No data
No data
No data
Flats
1-Bed
House No data
No data
No data
No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
No data
Houses No data
4-Bed
No data
No data
Houses £595,000 No data
5+Bed
No data
No data
Houses £725,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
Little Kingshill: Average Property Value
1-bed
Flats
Overall
Average
1st
Minimum Quartile
Median
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
2-Bed
Flats
No data
No data
No data
No data
3-Bed
Flats
No data
No data
No data
No data
1-Bed
No data
No data
No data
House No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
No data
Houses No data
4-Bed
No data
No data
Houses £728,333 No data
5+Bed
No data
No data
Houses £900,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
19
South Heath: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
Flats
No data
No data
No data
No data
1-Bed
No data
No data
No data
House No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
Houses £400,000 No data
4-Bed
No data
No data
Houses £515,000 No data
5+Bed
No data
No data
No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£572,463
£680,000
£736,250
£750,000
Great Kingshill: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
Flats
No data
No data
No data
No data
1-Bed
No data
No data
No data
House No data
2-Bed
No data
No data
Houses £294,500 No data
3-Bed
No data
No data
Houses £595,000 No data
4-Bed
Houses £533,661 £435,000 £456,250 £482,000
5+Bed
Houses £652,857 £525,000 £562,500 £650,000
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
20
Prestwood: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
1-bed
£137,450 No data
No data
No data
Flats
2-Bed
£174,950 No data
No data
No data
Flats
3-Bed
Flats
£169,959 No data
No data
No data
1-Bed
No data
No data
House £189,950 No data
2-Bed
No data
No data
Houses £241,975 No data
3-Bed
Houses £308,373 £225,000 £239,375 £246,975
4-Bed
Houses £533,454 £319,950 £351,250 £395,000
5+Bed
No data
No data
Houses £686,250 No data
Data Sourced from: www.rightmove.co.uk – October 2006
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£296,213
£700,000
£599,375
£1,250,000
No data
No data
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
Chartridge: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
Flats
No data
No data
No data
No data
1-Bed
No data
No data
No data
House No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
No data
Houses No data
4-Bed
No data
No data
Houses £617,500 No data
5+Bed
No data
No data
No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
Appendix III
21
Hyde Heath: Average Property Value
Overall
Average
Minimum
1st
Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
No data
No data
No data
No data
Flats
1-Bed
House No data
No data
No data
No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
No data
Houses No data
4-Bed
Houses £501,790 £415,000 £419,950 £430,000
5+Bed
No data
No data
Houses £600,000 No data
Data Sourced from: www.rightmove.co.uk – October 2006
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£548,999
£695,000
No data
No data
3rd
Quartile
Maximum
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
Chesham Bois: Average Property Value
Overall
Average
1st
Minimum Quartile
Median
1-bed
No data
No data
No data
No data
Flats
2-Bed
No data
No data
No data
No data
Flats
3-Bed
No data
No data
No data
No data
Flats
1-Bed
House No data
No data
No data
No data
2-Bed
No data
No data
No data
Houses No data
3-Bed
No data
No data
No data
Houses No data
4-Bed
No data
No data
Houses £595,000 No data
5+Bed
No data
No data
No data
Houses No data
Data Sourced from: www.rightmove.co.uk – October 2006
The tables below provide a summary of the overall average property values for each of
the areas;
Appendix III
22
Overall
Average
Chesham
Amersham
Chalfont
St Giles
Great
Missenden
Chalfont
St Peter
Ballinger
1-bed
Flats
£131,698
£184,522
£179,975
£174,967
£189,950
2-Bed
Flats
£173,616
£260,988
£194,000
£179,950
3 – Bed
Flats
No data
£307,488
No data
1-Bed
House
£175,760
£179,950
2-Bed
Houses
£215,337
3-Bed
Houses
4-Bed
Houses
5+Bed
Houses
The Lee
Bellingdon
Hawridge
Ashley
Green
Ley Hill
Latimer
Little
Chalfont
Seer
Green
Coleshill
No data
No data
No data
No data
No data
No data
No data
No data
No data
No data
£221,359
No data
No data
No data
No data
No data
No data
No data
£285,000
£285,000
No data
£169,959
£574,975
No data
No data
No data
No data
No data
No data
No data
No data
No data
£475,000
No data
£189,950
No data
No data
No data
No data
No data
No data
£230,000
No data
No data
No data
No data
£278,030
£321,225
£265,780
£252,054
£350,000
£337,500
No data
No data
£212,000
No data
No data
£222,000
£282,317
No data
£258,163
£335,135
£334,733
£396,096
£391,212
£385,000
£350,000
£325,000
£345,000
£333,950
£229,950
£280,000
£313,317
£484,286
£350,000
£370,708
£514,658
£653,809
£643,838
£542,093
£637,500
No data
£722,500
No data
£435,000
No data
£460,000
£463,333
£572,833
£975,000
£405,385
£635,613
£971,842
£793,900
£862,667
No data
No data
No data
£1,000,000
£829,950
£599,950
No data
£685,000
£1,140,000
£895,000
Overall
Average
Holmer
Green
Winchmore
Hill
Little
Missenden
Knotty
Green
Forty
Green
Little
Kingshill
South
Heath
Great
Kingshill
Prestwood
Chartridge
Penn
Hyde
Heath
Chesham
Bois
1-bed
Flats
No data
No data
£295,000
No data
No data
No data
No data
No data
No data
£137,450
No data
No data
No data
2-Bed
Flats
£217,450
No data
£265,970
No data
£499,000
No data
No data
No data
No data
£174,950
No data
No data
No data
3 – Bed
Flats
No data
No data
No data
No data
No data
No data
No data
No data
No data
£169,959
No data
No data
No data
1-Bed
House
No data
No data
£299,950
No data
No data
No data
No data
No data
No data
£189,950
No data
No data
No data
2-Bed
Houses
£281,863
£234,950
£312,500
No data
No data
No data
No data
No data
£294,500
£241,975
No data
No data
No data
3-Bed
Houses
£289,332
£335,000
£388,100
£400,000
£780,000
No data
No data
£400,000
£595,000
£308,373
No data
No data
No data
£445,693
£491,667
£550,990
£750,000
£655,000
£595,000
£728,333
£515,000
£533,661
£533,454
£617,500
£501,790
£595,000
£650,000
No data
£1,580,000
£897,500
£1,235,000
£725,000
£900,000
No data
£652,857
£686,250
No data
£600,000
No data
4-Bed
Houses
5+Bed
Houses
Appendix III
23
From the information in the table above, data is limited for flatted accommodation but
overall the lowest priced areas indicated are generally Chesham (though not all parts)
and Prestwood, and the highest Penn and Chalfont St Peter.
Data is more limited for the smaller house types. For 3 bedroom plus houses the
research indicates the lower priced areas as Chesham and Ley Hill and the most
expensive Knotty Green and Great Kingshill.
The data collected is a snapshot of resale property values and is only an indication of
what is available on the property market at the time of our research.
New Build Property Values
There were no new residential developments to provide data for every property type or
every area within Chiltern District. The data shown in the table below is from all new
developments found where sales values were available. (These are not necessarily ‘sold
‘values, in some cases the values shown are ‘asking prices’.)
Chesham
Development
OMV
Size (sq m)
£ per sq m
Baytree Court, Hospital
Hill, Chesham
Summer View,
Chartridge Lane,
Chesham
£145,000 £145,950
No data
No data
£155,000
No data
No data
High Street, Chesham
£119,950 £179,950
No data
No data
2-Bed Flats
Baytree Court, Hospital
Hill, Chesham
£169,950 £182,950
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
Baytree Court, Hospital
Hill, Chesham
£265,000
64
£4,173
3-Bed
Houses
Westridge, Chartridge
Lane, Chesham
Summer View,
Chartridge Lane,
Chesham
Belsham Close,
Chesham
£345,000
No data
No data
£415,000 £450,000
132-143
£3,143
£307,500
No data
No data
1-bed Flats
4-Bed
Houses
Data Sourced from: www.rightmove.co.uk , on ground research – October 2006
Appendix III
24
Amersham
Development
Meadowbank,
Meadowbank Close,
Amersham
Latimer Court,
Chesham Road,
Amersham
1 –Bed Flats
2-Bed Flats
OMV
Size (sq m)
£ per sq m
£169,950
No data
No data
£314,950 £334,950
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
£275,000
No data
No data
£395,000 £399,950
No data
No data
No data
No data
No data
Meadowbank,
Meadowbank Close,
Amersham
Meadowbank,
Meadowbank Close,
Amersham
2-Bed
Houses
3-Bed
Houses
4-Bed
Houses
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Little Chalfont
Development
OMV
Size (sq m)
£ per sq m
1–Bed Flats
No data
No data
No data
No data
2-Bed Flats
No data
No data
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
No data
No data
No data
No data
3-Bed
Houses
No data
No data
No data
No data
4-Bed
Houses
Sunnyside, Elizabeth
Avenue, Little
Chalfront
£495,000
No data
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Appendix III
25
Coleshill
Development
OMV
Size (sq m)
£ per sq m
1-Bed Flats
No data
No data
No data
No data
2-Bed Flats
No data
No data
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
No data
No data
No data
No data
3-Bed
Houses
No data
No data
No data
No data
4-Bed
Houses
Nationcrest PLC
£1,300,000
No data
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Holmer Green
Development
OMV
Size (sq m)
£ per sq m
1-Bed Flats
No data
No data
No data
No data
2-Bed Flats
The Orchards, Orchard
Way, Holmer Green
£239,950
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
No data
No data
No data
No data
3-Bed
Houses
No data
No data
No data
No data
4-Bed
Houses
No data
No data
No data
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Appendix III
26
Prestwood
Development
OMV
Size (sq m)
£ per sq m
1-Bed Flats
No data
No data
No data
No data
2-Bed Flats
No data
No data
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
Barley View, High
Street, Prestwood
£259,000
No data
No data
3-Bed
Houses
Barley View, High
Street, Prestwood
£299,950
No data
No data
4-Bed
Houses
No data
No data
No data
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Chalfont St Peter
Development
OMV
Size (sq m)
£ per sq m
1-Bed Flats
No data
No data
No data
No data
2-Bed Flats
No data
No data
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
No data
No data
No data
No data
3-Bed
Houses
Summer Way,
Grassingham End,
Chalfont St Peter
£325,000 £360,000
No data
No data
4-Bed
Houses
No data
No data
No data
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Appendix III
27
Whelpey Hill – New Build Data
Development
OMV
Size (sq m)
£ per sq m
1-Bed Flats
No data
No data
No data
No data
2-Bed Flats
No data
No data
No data
No data
3-Bed Flats
No data
No data
No data
No data
1-Bed
House
No data
No data
No data
No data
2-Bed
Houses
Whitehill Road,
Whelpey Hill
£280,000 £285,000
No data
No data
3-Bed
Houses
No data
No data
No data
No data
4-Bed
Houses
No data
No data
No data
No data
Data Sourced from: www.rightmove.co.uk ; on ground research – October 2006
Across the District, values are fairly consistent with the most notable exception being
some areas of Chesham. Our research indicates the emphasis of property sales is
generally on the larger unit types; there are few recent or in progress new build
developments that offer a variety of smaller property types.
In reality there will be a variety of values for similar property in any area but the data
indicates general tones of values. The values research is not a statistical exercise but is
carried out to enable us to make judgements about the values likely to be appropriate for
the range of values of new build properties typically available in the District, and
therefore for Adams Integra’s appraisal modelling.
Summary/Outcomes
Research into property prices across the District, on a detailed localised basis, was
undertaken to determine realistic development values for each appraisal model. Rather
than divide the District into neighbourhood areas, it was decided to provide a range of
value ‘points’ according to the results of our property values research. The blurring of
values between, and even within, some neighbourhood areas makes it difficult to rank
areas in terms of existing property values. By providing a range of ‘value points’ it allows
the results to be used independently of location and more usefully, by the approximate
development value.
The values set out in the final table below are based on the full range of typical new build
values encountered and are the values that are used in the modelling for the study. The
value points are determined by looking at the range of values and making informed
judgements as to reasonably how many value points to model. An allowance has been
made for the size of units modelled in this study. In addition, extremely high value units
have not been included as these skew the results.
Appendix III
28
Unit
Value
Point
1-Bed Flat
2-Bed Flat
2-Bed House
3-Bed House
4-Bed House
Value Point 1
Value Point 2
Value Point 3
£147,900
£191,400
£220,400
£249,400
£292,900
£181,050
£234,300
£269,800
£305,300
£358,550
£214,200
£277,200
£319,200
£361,200
£424,200
Chiltern Property Values report ends – Adams Integra ref 06373
Appendix III
29
APPENDIX IV
Glossary of Terms
APPENDIX IV
CHILTERN DISTRICT COUNCIL
Affordable Housing Development Economics Study
Adams Integra ref. 06373
GLOSSARY OF TERMS
(The scope of this is restricted to the technical viability related terms used in the
study)
A
Additionality – the Housing Corporation expects any social housing grant monies it
invests in schemes to be demonstrated to add this – i.e. add to affordable housing
numbers, improve tenure mix or possibly provide other sustainability benefits.
B
Base Build Costs – for construction only (excluding fees, contingencies and extras)
as explained in the study.
C
Commuted Sum – See “Payment in lieu” below.
D
Design and Build - A building contractor will be appointed under contract, after a
tendering or sometimes negotiated process, to complete the building works to an
agreed cost and specification, to the Client’s brief. It is always best to involve the
contractor at the earliest possible stage. The contractor will be responsible for the
design and construction as defined in formal documentation (Client’s requirements or
performance specification) – he provides a complete package service, managing the
whole project, rather than solely the build of others’ designs. Build costs on this basis
are sometimes referred to as “total” or “all in” because the contractor takes the risk
on the whole project and recharges the client allowing for all fees and extras.
Developer Appraisal – An appraisal carried out by a developer to determine the
approximate value of land in order that an offer can be made to a land owner. The
appraisal(s) would normally look to determine an approximate Residual Land Value
(RLV). Assuming a developer has already reached the initial conclusion that, in
principle, a site is likely to be suitable and viable for development, an appraisal is
then carried out to fine tune scheme feasibility and discover what sum they can afford
to pay for the site. This would normally be subject to a range of caveats and clauses
based on circumstances unknown to the developer at the time of making an offer. As
an example an offer could be subject to the granting of planning permission or
subject to no abnormal conditions exsisting, etc.
Developer Payment Type – The sums applied to the appraisals in terms of payment
to the developer in return for completed affordable units. The two forms modelled are
Free Land (or Nil Cost Land) and Mortgage Funded by Rental Stream. Free land
assumes that the developer will provide free land (serviced up to the boundary of the
Appendix IV
site) in return for receiving a reasonable build cost rate back (not including fees and
extras in our assumptions) for providing completed affordable properties. The
Mortgage Funded by Rental Stream subsidy only pays the developer a sum per unit
that is equivalent to the RSL’s ability to fund the units through capitalisation of the
(affordable) net rental stream from those units. The rental flows for the latter are
based on Housing Corporation Target Rents, after e.g. management, maintenance
costs and voids allowances. In this regard see also Payment Table. The study refers
also to this payment as the “affordable housing unit transfer”.
Developer’s Profit - The developer’s reward for risk taken in pursuing and running the
project, required to secure project funding. This is the gross profit, before tax. It will
usually cover an element of overheads, but varies. The profit element used in these
appraisals is profit expressed as a percentage of Gross Development Value (the
most commonly expressed way) although developers will sometimes use other
methods, for example a certain return on capital employed (ROCE).
Development Cost – This is the cost associated with the development of a scheme
and includes professional fees (engineering, design, project management),
contingencies, sale agency fees, legal fees on unit sales and of course build costs
(materials, labour, etc).
Development Viability (or “viability”) – The viability of the development (in this case
market-led housing scheme) – in financial terms. A viable development would
normally be one which proceeds (or at least there is no financial reason for it not to
proceed) – it would show the correct relationship between GDV (see below) and
Development Cost. There would be a sufficient gap between the GDV and
Development Cost to support a sufficient return (developer’s profit) for the risk taken
by the developer in pursuing the scheme, and a sufficiently attractive land value for
the land owner. An un-viable scheme is one where a poor relationship exists
between GDV and Development Cost, so that insufficient profit rewards and /or land
value can be generated.
E
F
Finance - Costs associated with financing the development cost. Varying views are
taken on the length of the relevant construction projects as to how long these costs
need to be carried for on each occasion.
G
Gross Development Value (GDV) - The amount the developer ultimately receives on
completion or sale of the scheme whether through open market sales alone or a
combination of those and the receipt from a RSL for completed affordable housing
units - before all costs are subtracted.
H
I
J
K
Appendix IV
L
Land Costs – Costs associated with securing the land and bringing it forward –
activities which precede the construction phase, and therefore costs which are
usually borne for a longer period than the construction phase (a lead in period). They
include financing the land acquisition and associated costs such as land surveys,
planning application and sometimes infrastructure costs, land acquisition expenses
and stamp duty land tax.
Land Residual as % of GDV – The amount left for land purchase expressed as a
percentage of the Gross Development Value. A common guideline used in the
development industry. Readers may be familiar with the rule of thumb that upwards
of approximately one third of development value is comprised of land value. In
practice this has always varied, but with increasing burdens on land value from a
range of planning infrastructure requirements (including affordable housing)
traditional views on where land values lie are having to be revised.
M
N
O
P
Payment in lieu – A financial payment made by a developer or land owners instead of
providing the planning-led affordable housing requirement on the site of the subject
market (private sale) housing scheme. (See also “Commuted Sum”).
Payment Table – This is normally referred to where a Local Authority prescribes or
guides as to the levels of receipt the developer will get for selling completed
affordable housing units of set types and sizes to a Housing Association. In this
context it normally relates to an approach which assumes nil grant and is based on
what the Housing Association can afford to pay through finance raised (mortgage
funded) against the rental or shared ownership income flow. See also Developer
Payment. It is sometimes used in a looser context, for example in the setting out of
financial contribution levels for payments in-lieu of on-site affordable housing
provision.
Percentage Reduction in Land Residual - The percentage by which the residual land
value falls as a result of the impacts from the range of affordable housing policy
options. This is expressed as the fall in residual land value compared to a site that
previously required zero affordable housing or a site that was required to provide
affordable housing previously, but at a lower percentage.
Planning Infrastructure – We refer to this because affordable housing is one of a set
of requirements which usually need to be met by new housing developments, and
are secured through Section 106 agreements. The terms “planning obligations”,
“planning gain”, “infrastructure” tend to be used to describe the same. Also covers
wide range of community requirements needed to support development – highways,
education, open space, public art, and the like.
Appendix IV
Planning led affordable housing – Affordable housing required on new market
(private sale) housing developments of certain types (which are set locally – see
“Threshold” and “Proportion” below) as set out by “PPS3”
Planning Policy Statement 3: Housing (“PPS3”) – National statement of the
Government’s planning policy on Housing – including the planning led affordable
housing we consider here.
Proportion of Affordable Housing – The percentage or proportion of affordable
housing sought on site. The appraisals model a range of scenarios within all the
Value Band Areas investigating the impact of 20%, 30%, 40% and 50% affordable
housing on scheme viability. Each model also investigates the “no affordable
housing” position as a benchmark.
Q
R
Residual Valuation – The process by which RLV is estimated. So called because it
starts with the GDV at the top of the calculation and deducts all Development Costs
and Developer’s Profit so as to indicate the amount left remaining (hence “residual”)
for land purchase – including land value.
Residual Land Value (RLV) - The amount left for land purchase once all
development, finance and land costs have been deducted from the GDV, normally
expressed in monetary terms (£). This acknowledges the sum subtracted for
affordable housing and other infrastructure payments/requirements where applicable.
It is relevant to calculate land value in this way as land value is a direct result of what
scheme type specifically can be created on a site, the issues that have to be dealt
with to create it and costs associated with those.
S
Scheme Type – The scheme (development project) types modelled in the appraisals
consist of either entirely flatted or housing schemes or schemes with a mix of houses
and flats.
Section 106 – (of the Town and Country Planning Act 1990). The legally binding
planning agreement which runs with the interest in the land and requires the land
owner (ultimately the developer becomes land owner) through covenants to agree to
meet the various planning obligations once they implement the planning permission
to which it relates. Sets out the principal affordable housing obligations, and is the
usual tool by which planning led affordable housing is secured by the Local Planning
Authority. Section 106 of this Act refers to “agreements regulating development or
use of land”.
Sliding Scale – Refers in this context to a set of affordable housing policies which
require a lower proportion on the smallest sites, increased with site size – to graduate
the viability impacts, particularly as such sites often fall within the thresholds for the
first time.
T
Appendix IV
Tenure mix – The tenure types of affordable housing provided on a site – refers to
the balance between for example affordable rented accommodation and shared
ownership.
Threshold – Affordable housing threshold, i.e. point at which the Local Authority
determines affordable housing provision should be sought or points at which the
Local Authority wishes to test viability with a view to determining potential future
policy.
U
V
Value Point – Adams Integra’s usual viability study methodology is to make
judgements on a range of new build property values (containing value “points”) which
represent typically found prices for ordinary new developments in the District at the
time of the study research.
Viability – See Development Viability.
X
Y
Z
Appendix IV