Mole Valley District Council
Community Infrastructure Levy
Economic Viability Assessment
On behalf of Mole
Project Ref: 33833/4501 | Rev: 02 | Date: May 2015
Office Address: 10 Queen Square, Bristol, BS1 4NT
T: +44 (0)117 928 1560 F: +44 (0)117 928 1570 E: [email protected]
Valley District Council
Economic Viability Assessment
Mole Valley District Council CIL
Document Control Sheet
Project Name: Mole Valley District Council CIL
Project Ref:
33833
Report Title:
Community Infrastructure Levy Economic Viability Assessment
Doc Ref:
Final Report
Date:
May 2015
Name
Position
Signature
Date
Tom Marshall
Graduate Planner
TM
May 2015
Russell Porter
Senior Associate
Economist
RP
May 2015
Reviewed by:
David Codling
Director of Property
DC
May 2015
Approved by:
John Baker
Partner
JB
May 2015
Prepared by:
For and on behalf of Peter Brett Associates LLP
Revision
Date
Description
Prepared
Reviewed
Approved
01
May 2015
Draft Report
TM/RP
DC
JB
02
May 2015
Draft Final Report
TM/RP
DC
JB
03
May 2015
Final Report
TM/RP
DC
JB
Peter Brett Associates LLP disclaims any responsibility to the Client and others in respect of any
matters outside the scope of this report. This report has been prepared with reasonable skill, care and
diligence within the terms of the Contract with the Client and generally in accordance with the
appropriate ACE Agreement and taking account of the manpower, resources, investigations and
testing devoted to it by agreement with the Client. This report is confidential to the Client and Peter
Brett Associates LLP accepts no responsibility of whatsoever nature to third parties to whom this
report or any part thereof is made known. Any such party relies upon the report at their own risk.
© Peter Brett Associates LLP 2015
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Contents
1
Introduction ................................................................................................................................. 1
2
Viability and the Regulatory Requirements .............................................................................. 3
3
4
2.1
Development appraisal .................................................................................................. 3
2.2
Defining viability: the Harman Report ............................................................................ 4
2.3
National Planning Policy Framework............................................................................. 4
2.4
Community Infrastructure Levy requirements ............................................................... 4
2.5
CIL summary ................................................................................................................. 9
Local Context and Relevant Policy ......................................................................................... 11
3.1
Introduction .................................................................................................................. 11
3.2
What development is planned? ................................................................................... 11
3.3
Where is development likely to take place? ................................................................ 12
3.4
What types of residential development are likely to take place? ................................ 13
3.5
Consultation with local stakeholders ........................................................................... 15
Residential Market Analysis ..................................................................................................... 17
4.1
5
6
7
Understanding residential values in Mole Valley ......................................................... 17
Residential Development Assumptions.................................................................................. 22
5.1
Introduction .................................................................................................................. 22
5.2
Residential typologies ................................................................................................. 22
5.3
Value assumptions ...................................................................................................... 24
5.4
Build costs ................................................................................................................... 28
5.5
Other development costs ............................................................................................ 29
5.6
Developer’s profit......................................................................................................... 31
5.7
Benchmark threshold land values ............................................................................... 31
Residential Development Viability Analysis ........................................................................... 34
6.1
Introduction .................................................................................................................. 34
6.2
Viability testing results ................................................................................................. 34
6.3
Testing of dwellings for older people ........................................................................... 35
6.4
Residential viability zones ........................................................................................... 35
6.5
Recommending a residential CIL charge .................................................................... 37
Non-residential typologies and assumptions ........................................................................ 40
7.1
Establishing the typologies .......................................................................................... 40
7.2
Value assumptions ...................................................................................................... 40
7.3
Build costs ................................................................................................................... 42
7.4
Other development costs ............................................................................................ 42
7.5
Land for non-residential uses ...................................................................................... 43
7.7
Business uses ............................................................................................................. 44
7.8
Retail uses ................................................................................................................... 44
7.9
Hotel development....................................................................................................... 47
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7.10
8
Care homes ................................................................................................................. 47
Recommendations .................................................................................................................... 48
8.1
Viability findings ........................................................................................................... 48
8.2
Study recommendations .............................................................................................. 48
Figures
Figure 2.1 Method diagram – value of completed development scheme ............................................... 3
Figure 3.1: Previous delivery within Mole Valley against target (dwellings per annum) ....................... 12
Figure 3.2: Previous delivery in different locations within Mole Valley .................................................. 13
Figure 4.1: Average sales values for all dwellings in neighbouring districts in Surrey .......................... 17
Figure 4.2: Comparison between new and secondhand flats and houses within Mole Valley ............. 18
Figure 4.3: Average sales values for all dwellings by postcode sectors within Mole Valley (2010-15) 19
Figure 6.1 Proposed residential charging zone boundaries .................................................................. 39
Figure 7.1 Proposed Town Centre charging zone boundaries .............................................................. 46
Tables
Table 3.1: Previous delivery in Mole Valley by dwelling size ................................................................ 14
Table 3.2 Average density of new dwellings delivered in Mole Valley over time .................................. 14
Table 3.3: Proportion of units built on brownfield land within Mole Valley ............................................ 14
Table 4.1 Land Registry analysis for Mole Valley’s BUAs (existing and new build 2010-2015) ........... 20
Table 4.2 Land Registry analysis for Mole Valley’s rural areas (existing and new build 2010-2015) ... 20
Table 5.1 Notional sites used for residential viability testing ................................................................. 23
Table 5.2: Sales values (£ p sqm) used in testing viability.................................................................... 25
Table 5.3: Sales values of homes for older people within or near Mole Valley. .................................... 26
Table 5.4 Sales values for testing new older person housing ............................................................... 27
Table 5.5: Median build costs in Mole Valley at 2015 tender prices, flats & housing (per sqm) ........... 28
Table 5.6: Median build costs in Mole Valley at 2015 tender prices, older people units (per sqm) ..... 28
Table 5.7 S106 payments received in Mole Valley ............................................................................... 30
Table 5.8 Land purchase costs ............................................................................................................. 31
Table 5.9 Land values for sites with planning permission within Mole Valley at 2015 ......................... 32
Table 5.10 Land values used in viability testing ................................................................................... 33
Table 6.1 Summary of generic residential site viability assessments ................................................... 34
Table 6.2 Summary of dwellings for older people site viability assessments ....................................... 35
Table 6.3 Distribution of developments within Mole Valley ................................................................... 37
Table 6.4 Mole Valley proposed residential CIL charging rates ............................................................ 38
Table 7.1: Selected non-residential typologies...................................................................................... 40
Table 7.5 Non-residential land values used in testing viability ............................................................. 43
Table 7.7 Headrooms within convenience retail uses .......................................................................... 45
Table 7.8 Headrooms within comparison retail uses ........................................................................... 45
Table 8.1 Recommended CIL charges for Mole Valley district ............................................................. 49
Appendices
Appendix A
Assumptions Summary
Appendix B
Viability Assessments
Appendix C
Viability Sensitivity Analysis
Appendix D
New Homes Sales Values
Appendix E
Non-Residential Market Data
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1
Introduction
1.1.1
Peter Brett Associates (PBA) was commissioned to undertake an Economic Viability
Assessment to provide evidence and advice to support the introduction of a Community
Infrastructure Levy in Mole Valley district.
1.1.2
PBA prepared an earlier report which tested a range of residential and retail viability
1
appraisals on behalf of Mole Valley District Council . This report is an update to this earlier
published report based on the latest value and costs assumptions and providing additional
testing of development schemes likely to come forward in Mole Valley district over the course
of the local Core Strategy timeline.
1.1.3
The Community Infrastructure Levy (CIL) regulations require the production of a charging
schedule that sets out the rates that will be applied within each local authority area. This must
be based on a robust evidence base to ensure that the proposed levels of CIL do not
adversely impact on the economic viability of development.
1.1.4
Mole Valley District Council is planning to introduce a CIL and have appointed Peter Brett
Associates (PBA) to assess development viability in Mole Valley district and recommend CIL
charging rates accordingly. This report provides PBA’s analysis and recommendations.
1.1.5
This study does not seek to set the levy as this is for the local authority to determine and
publish in their charging schedule. However, it does make recommendations about the CIL
rateable value for developments which are planned or generally expected to come forward
during the life of the Mole Valley Core Strategy.
1.1.6
This report and the accompanying appraisals have been prepared in line with RICS valuation
guidance. However, it is first and foremost a supporting document to inform the drafting of the
CIL evidence base.
1.1.7
As per Professional Standards 1 of the RICS Valuation Standards – Global and UK Edition2,
the advice expressly given in the preparation for, or during the course of negotiations or
possible litigation does not form part of a formal “Red Book” valuation and should not be relied
upon as such. No responsibility whatsoever is accepted to any third party who may seek to
rely on the content of the report for such purposes.
1.1.8
Following this Introduction:
1

In Chapter 2 we set out the legal requirements that a CIL charging schedule must comply
with;

Chapter 3 examines the local planning and development context, in order to ensure that
CIL supports development in the district as proposed in the Core Strategy;

Chapters 4 and 5 set out the method and assumptions used in our residential viability
assessments;

Chapter 6 provide these assessments for residential uses, and recommend CIL Charges
accordingly;
Mole Valley District Council Community Infrastructure Levy Viability Appraisals
2
RICS (January 2014) Valuation – Professional Standards, PS1 Compliance with standards and practice statements where a
written valuation is provided
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
Chapter 7 provide these assessments for non-residential land uses and a Standard
Charge for uses not separately covered, and recommend CIL Charges accordingly;

Chapter 8 pulls together the charges and shows the recommended CIL charging
schedule.
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2
Viability and the Regulatory Requirements
2.1.1
The basis of viability testing in this report is through a series of generic site appraisals, using
the residual value (RV) approach. This needs to take account of a variety of inter-related
factors expected to be delivered through the operation of the planning system, which are
explored below
2.1
Development appraisal
2.1.1
Viability assessment is at the core of the charge-setting process. The purpose of the
assessment is to identify charging rates at which the bulk of the development proposed in the
development plan is financially viable, in order to ensure that the CIL does not put at risk the
overall development planned for the area.
2.1.2
Our viability assessments are based on development appraisals of hypothetical schemes,
using the residual valuation method. This approach is in line with accepted practice and as
3
4
recommended by RICS guidance and the Harman report. Residual valuation is applied to
different land uses and where relevant to different parts of the district, aiming to show typical
values for each. It is based on the formula presented in Figure 2.1.
Figure 2.1 Method diagram – value of completed development scheme
2.1.3
This formula is used for each of the hypothetical schemes tested, to estimate typical residual
land values, which is what the site should be worth before being brought forward with full
planning permission. The residual value calculation requires a wide range of inputs, or
assumptions, including the costs of development and the required developer’s return.
2.1.4
The arithmetic of residual appraisal is straightforward (we use a bespoke spreadsheet models
for the appraisals). However, the inputs to the calculation are hard to determine for a specific
site (as demonstrated by the complexity of many S106 agreements and negotiations). The
difficulties grow when making calculations that represent a typical or average site – which is
what we need to do for estimating appropriate CIL charges.
3
RICS (2012), Financial Viability in Planning, RICS First Edition Guidance Note
4
Local Housing Delivery Group Chaired by Sir John Harman (2012) Viability Testing Local Plans
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Impact of local policy on local development viability
2.1.5
It is important that policy relating to planning obligations is realistic and credible, taking into
account the local housing and commercial market, the economics of development, including
price, supply, demand, need and profit issues. Whilst this report is set within the known
planning and economic context at the time of production, it will be important to update its
assumptions and findings when there are significant changes to the market and economy or
changes to the type of growth sought in the district.
2.1.6
It is also of note that the importance of maintaining plan viability is a central theme of national
planning policy and guidance in recent years. We explore this context in the following section.
2.2
Defining viability: the Harman Report
2.2.1
The cross industry and CLG supported ‘Viability Testing Local Plans’ (June 2012) provides
detailed guidance regarding viability testing and in particular provides practical advice for
planning practitioners on developing viable Local Plans which limits delivery risk. This
guidance forms the basis to our approach in this report.
2.2.2
The Harman Report usefully defines viability. 'Viability Testing Local Plans' (Local housing
Delivery Group, June 2012), states that:
“An individual development can be said to be viable if, after taking account of all costs,
including central and local government policy and regulatory costs, and the cost and
availability of development finance, the scheme provides a competitive return to the developer
to ensure that development takes place, and generates a land value sufficient to persuade the
land owner to sell the land for the development proposed.”
2.3
National Planning Policy Framework
2.3.1
The NPPF reflects the Harman report in its approach to the concept of viability, and its
concern to ensure that cumulative effects of policy do not combine to render plans unviable
(para. 173):
“The costs of any requirements likely to be applied to development, such as requirements for
affordable housing, standards, infrastructure contributions or other requirements should, when
taking account of the normal cost of development and mitigation, provide competitive returns
to a willing land owner and willing developer to enable the development to be deliverable.”
2.4
Community Infrastructure Levy requirements
2.4.1
The Community Infrastructure Levy (CIL) is a planning charge that came into force on 6 April
2010. The levy allows local authorities in England and Wales to raise contributions from
development to help pay for infrastructure that is needed to support planned development.
Local authorities who wish to charge the levy must produce a draft charging schedule setting
out CIL rates for their areas – which are to be expressed as pounds (£) per square metre, as
CIL will be levied on the gross internal floorspace of the net additional liable development.
Before it is approved by the Council, the draft schedule has to be tested by an independent
examiner.
2.4.2
The requirements which a CIL charging schedule has to meet are set out in:

The Planning Act 2008 as amended by the Localism Act 2011.
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2.4.3
5
6
7
8
9

The CIL Regulations 2010 , as amended in 2011 , 2012 , 2013 and 2014 .

Guidance contained within the National Planning Practice Guidance (NPPG)
The 2014 Regulations have altered key aspects of setting the charge for authorities who
publish a Draft Charging Schedule for consultation. The key points from these various
documents are summarised below.
Striking the appropriate balance
2.4.4
2.4.5
The revised Regulation 14 requires that a charging authority ‘strike an appropriate balance’
between:
a.
The desirability of funding from CIL (in whole or in part) the… cost of infrastructure
required to support the development of its area… and
b.
The potential effects (taken as a whole) of the imposition of CIL on the economic viability
of development across its area.
By itself, this statement is not easy to interpret. The guidance explains its meaning. A key
feature of the 2014 Regulations is to give legal effect to the requirement in this guidance for an
authority to ‘show and explain…’ their approach at examination. This explanation is important
and worth quoting at length:
‘The levy is expected to have a positive economic effect on development across a local plan
area. When deciding the levy rates, an appropriate balance must be struck between additional
investment to support development and the potential effect on the viability of developments.
This balance is at the centre of the charge-setting process. In meeting the regulatory
requirements (see Regulation 14(1)), charging authorities should be able to show and explain
how their proposed levy rate (or rates) will contribute towards the implementation of their
relevant plan and support development across their area.
As set out in the National Planning Policy Framework in England (paragraphs 173 – 177), the
sites and the scale of development identified in the plan should not be subject to such a scale
10
of obligations and policy burdens that their ability to be developed viably is threatened.’
2.4.6
In other words, the ‘appropriate balance’ is the level of CIL which the authority judges will not
threaten the viability of the bulk of development in its area. If the CIL charging rate is above
this appropriate level, there could be less development because CIL could make too many
potential developments unviable. Conversely, if the charging rates are below the appropriate
level, then the delivery targets set out in the Local Plan may also be difficult to achieve if there
is not sufficient funding available to support required infrastructure.
2.4.7
Achieving an appropriate balance is a matter of judgement. It is not surprising, therefore, that
charging authorities are allowed some discretion in this matter. This has been reduced by the
2014 Regulations, but remains. For example, Regulation 14 requires that in setting levy rates,
the Charging Authority (our underlining highlights the discretion):
‘must strike an appropriate balance…’ i.e. it is recognised there is no one perfect balance;
5
http://www.legislation.gov.uk/ukdsi/2010/9780111492390/pdfs/ukdsi_9780111492390_en.pdf
6
http://www.legislation.gov.uk/ukdsi/2011/9780111506301/pdfs/ukdsi_9780111506301_en.pdf
7
http://www.legislation.gov.uk/uksi/2012/2975/pdfs/uksi_20122975_en.pdf
8
http://www.legislation.gov.uk/uksi/2013/982/pdfs/uksi_20130982_en.pdf
9
http://www.legislation.gov.uk/uksi/2014/385/pdfs/uksi_20140385_en.pdf
10
Ibid (Section 2:2)
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‘Charging authorities need to demonstrate that their proposed levy rate or rates are informed
by ‘appropriate available’ evidence and consistent with that evidence across their area as a
whole.’
‘A charging authority’s proposed rate or rates should be reasonable, given the available
evidence, but there is no requirement for a proposed rate to exactly mirror the evidence ……
11
There is room for some pragmatism.’
2.4.8
Thus the guidance sets the delivery of development firmly in within the context of
implementing the Local Plan. This is linked to the plan viability requirements of the NPPF,
particularly paragraphs 173 and 174. This point is given emphasis throughout the guidance.
For example, in guiding examiners, the guidance makes it clear that the independent examiner
should establish that:
‘…..evidence has been provided that shows the proposed rate (or rates) would not threaten
12
delivery of the relevant Plan as a whole…..’
2.4.9
This also makes the point that viability is not simply a site specific issue but one for the plan as
a whole.
2.4.10 The focus is on seeking to ensure that the CIL rate does not threaten the ability to develop
viably the sites and scale of development identified in the Local Plan. Accordingly, when
considering evidence the guidance requires that charging authorities should:
‘use an area based approach, involving a broad test of viability across their area’,
supplemented by sampling ‘…an appropriate range of types of sites across its area…’ with the
focus ‘...on strategic sites on which the relevant Plan relies and those sites where the impact
13
of the levy on economic viability is likely to be most significant (such as brownfield sites).
2.4.11 This reinforces the message that charging rates do not need to be so low that CIL does not
make any individual development schemes unviable (some schemes will be unviable with or
without CIL). The levy may put some schemes, however, in aiming to strike an appropriate
balance overall, the charging authority should avoid threatening the ability to develop viably
the sites and scale of development identified in the Local Plan.
Keeping clear of the ceiling
2.4.12 The guidance advises that CIL rates should not be set at the very margin of viability, partly in
order that they may remain robust over time as circumstances change:
‘…..if the evidence pointed to setting a charge right at the margins of viability………It would be
appropriate to ensure that a ‘buffer’ or margin is included, so that the levy rate is able to
14
support development when economic circumstances adjust.’
2.4.13 We would add two further reasons for a cautious approach to rate-setting, which stops short of
the margin of viability:

Values and costs vary widely between individual sites and over time, in ways that cannot
be fully captured by the viability calculations in the CIL evidence base.
11
Ibid (Section 2:2:2:4)
12
Ibid (Section 2:2:5:5)
13
Ibid (Section 2:2:2:4)
14
Ibid (Section 2:2:2:4)
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A charge that aims to extract the absolute maximum would be strenuously opposed by
landowners and developers, which would make CIL difficult to implement and put the overall
development of the area at serious risk.
Varying the charge
2.4.14 CIL Regulations (Regulation 13) allows the charging authority to introduce charge variations
by geographical zone in its area, by use of buildings, by scale of development (GIA of
buildings or number of units) or a combination of these three factors. (It is worth noting that
15
the phrase ‘use of buildings’ indicates something distinct from ‘land use’). As part of this,
some rates may be set at zero. But variations must reflect differences in viability; they cannot
be based on policy boundaries. Nor should differential rates be set by reference to the costs of
infrastructure.
2.4.15 The guidance also points out that charging authorities should avoid ‘undue complexity’ when
setting differential rates, and ‘….it is likely to be harder to ensure that more complex patterns
16
of differential rates are state aid compliant.’
2.4.16 Moreover, generally speaking, ‘Charging schedules with differential rates should not have a
disproportionate impact on particular sectors or specialist forms of development’; otherwise
17
the CIL may fall foul of state aid rules.
2.4.17 It is worth noting, however, that the guidance gives an example which makes it clear that a
strategic site can be regarded as a separate charging zone: ‘If the evidence shows that the
area includes a zone, which could be a strategic site, which has low, very low or zero viability,
18
the charging authority should consider setting a low or zero levy rate in that area.’
Supporting evidence
2.4.18 The legislation requires a charging authority to use ‘appropriate available evidence' to inform
19
their charging schedule . The guidance expands on this, explaining that the available data ‘is
20
unlikely to be fully comprehensive’.
2.4.19 These statements are important, because they indicate that the evidence supporting CIL
charging rates should be proportionate, avoiding excessive detail. One implication of this is
that we should not waste time and cost analysing types of development that will not have
significant impacts, either on total CIL receipts or on the overall development of the area as
set out in the Local Plan.
Chargeable floorspace
21
2.4.20 CIL will be payable on ‘most buildings that people normally use’ . It will be levied on the net
22
additional floorspace created by any given development scheme . Any new build that
replaces existing floorspace that has been in recent use on the same site will be exempt from
CIL, even if the new floorspace belongs to a higher-value use than the old.
15
The Regulations allow differentiation by “uses of development”. “Development” is specially defined for CIL to include only
‘buildings’, it does not have the wider ‘land use’ meaning from TCPA 1990, except where the reference is to development of the
area.
16
DCLG (February 2014) op cit (Section 2:2:2:6)
17
Ibid (Section 2.2.2.6)
18
Ibid (Section 2:2:2:6)
19
Planning Act 2008 section 211 (7A)
20
DCLG (February 2014) op cit (Section 2:2:2:4)
21
DCLG (November 2010) Community Infrastructure Levy – An Overview (para 37)
22
Ibid (para 38)
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What the examiner will be seeking
2.4.21 According to statutory guidance, ‘the independent examiner should check that:

The charging authority has complied with the requirements set out in legislation

The charging authority’s draft charging schedule is supported by background documents
containing appropriate available evidence

The proposed rate or rates are informed by and consistent with, the evidence on
economic viability across the charging authority's area; and

Evidence has been provided that shows the proposed rate would not threaten delivery of
23
the relevant Plan as a whole.’
CIL, S106, S278 and the regulation 123 infrastructure list
2.4.22 The purpose of CIL is to enable the charging authority to carry out a wide range of
infrastructure projects. CIL is not expected to pay for all infrastructure requirements but could
make a significant contribution. However, development specific planning obligations
(commonly known as S106) to make development acceptable will continue with the
introduction of CIL. In order to ensure that planning obligations and CIL operate in a
complementary way, CIL Regulations 122 and 123 place limits on the use of planning
obligations.
2.4.23 Some developers have expressed concerns about ‘double dipping’ (i.e. being charged twice
for the same infrastructure by requiring to pay CIL and S106). To overcome this concern, it is
imperative that charging authorities are clear about the authorities’ infrastructure needs and
what developers will be expected to pay for and through which route. The guidance expands
this further in explaining how the regulation 123 list should be scripted to account for generic
projects and specific named projects (see section 2:6:2:2 of the 2014 CIL guidance).
2.4.24 The guidance states that ‘it is good practice for charging authorities to also publish their draft
(regulation 123) infrastructure lists and proposed policy for the scaling back of S106
24
agreements.’ This list now forms part of the ‘appropriate available evidence’ for
consideration at the CIL examination.
2.4.25 The guidance identifies the need to assess past evidence on developer contributions, stating
‘as background evidence, the charging authority should also provide information about the
amount of funding collected in recent years through section 106 agreements, and information
25
on the extent to which affordable housing and other targets have been met’.
2.4.26 Similarly, there are restrictions on using section 278 highway agreements to fund
26
infrastructure that is also including in the CIL infrastructure list . This is done by placing a
limit on the use of planning conditions and obligations to enter into section 278 agreements to
provide items that appear on the charging authority’s Regulation 123 infrastructure list. Note
these restrictions do not apply to highway agreements drawn up the Highway Agency.
2.4.27 In December 2014, the government updated the guidance regarding affordable housing and
s106 thresholds. Where originally local authorities were able to seek affordable housing and
s106 contributions on all schemes, the government published a revision to planning guidance
requiring a threshold of more than 10 homes, or 5 homes in designated rural areas.
23
DCLG (April 2013) Community Infrastructure Levy Guidance (para 9)
24
DCLG (February 2014) op cit (Section 2:2:3)
25
Ibid (Section 2:2:2:3)
26
See section 2.6.5 of the DCLG (February 2014) Community Infrastructure Levy Guidance
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Effectively this means that schemes of 10 units and less (or which have a maximum combined
floorspace of 1,000 sqm) or of 5 or less in designated rural areas, are now exempt from
contributing to affordable housing or tariff based s106 infrastructure requirements.
2.4.28 The Government has issued this amended guidance in response to a perceived concern with
the delivery of smaller sites and the potential burden that development contributions can have
on these types of developments. The Government’s stated aim is to remove what it considers
as barriers to development to achieving one of its main objectives, which is increasing the
delivery of housing across the country. Despite this change in national policy, this does not
set a justifiable reason for applying a separate CIL charge on residential schemes with fewer
than 11 units without justification through appropriate viability evidence for setting a separate
charge. This is considered later in paragraph 6.2.6.
Policy requirements
2.4.29 More broadly, the CIL guidance states that ‘Charging authorities should consider relevant
national planning policy when drafting their charging schedules. This includes the National
27
Planning Policy Framework (NPPF)’ . Where consideration of development viability is
concerned, the CIL guidance draws specific attention to paragraphs 173 to 177 of the NPPF
29
and to paragraphs 162 and 177 of the NPPF in relation to infrastructure planning.
28
2.4.30 The only policy requirements which refer directly to CIL in the NPPF are set out at paragraph
175 of the NPPF, covering, firstly, working up CIL alongside the plan making where practical;
and secondly placing control over a meaningful proportion of funds raised with
30
neighbourhoods where development takes place. Since April 2013 this policy requirement
has been complemented with a legal duty on charging authorities to pass a specified
proportion of CIL receipts to local councils, to spend it on behalf of the neighbourhood if there
is no local council for the area where development takes place. Whilst important
considerations, these two points are outside the immediate remit of this study.
2.5
CIL summary
2.5.1
To meet legal requirements and satisfy the independent examiner, a CIL charging schedule
should:
‘strike an appropriate balance’ between the need to fund infrastructure and the impact of CIL;
and
‘Not threaten delivery of the relevant plan as a whole‘.
2.5.2
As explained in statutory guidance, this means that the net effect of the levy on total
development across the area should be positive. CIL may reduce development by making
certain schemes which are not plan priorities unviable. Conversely, it may increase
development by funding infrastructure that would not otherwise be provided, which in turn
supports development that otherwise would not happen. The law requires that, in the judgment
of the local authority, the net outcome of these two impacts should be positive. This judgment
is at the core of the charge-setting process.
2.5.3
Legislation and guidance also set out that:

Authorities should avoid setting charges up to the margin of viability for the bulk of sites;
27
DCLG (February 2014) op cit (Section 2:2:1)
28
Ibid (Sections 2:2 and 2:2:1)
29
Ibid (Section 2:2:2:1)
30
http://www.legislation.gov.uk/uksi/2013/982/pdfs/uksi_20130982_en.pdf
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2.5.4

CIL charging rates may vary across geographical zones, building uses and by scale). But
there are restrictions on this differential charging. It must be justified by differences in
development viability, not by policy or by varying infrastructure costs; it should not
introduce undue complexity; and it should have regard to State Aid rules.

Charging rates should be informed by ‘appropriate available evidence’, which need not be
‘fully comprehensive or exhaustive’;

While charging rates should be consistent with the evidence, they are not required to
‘mirror’ the evidence. In this and other ways, charging authorities have discretion in
setting charging rates.
In our analysis and recommendations below, we aim to meet these legal and statutory
guidance requirements and to maximise achievement of the Council’s own priorities, using the
discretion that the legislation and guidance allow.
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3
Local Context and Relevant Policy
3.1
Introduction
3.1.1
This chapter considers the type and likely locations for growth which are expected to come
forward in the future, in order to inform the CIL viability work and any recommended charging
schedule. The purpose here is two-fold. Firstly, it is to ensure that any recommended CIL
charge applies to those developments most likely to come forward in the future. Secondly, it is
to understand the main elements of Local Plan delivery, so that any recommended CIL charge
avoids putting the delivery of the Plan at risk.
3.1.2
One way of understanding what types of development are going to be important in delivering
against the statutory CIL Regulations’ requirement to deliver the main elements of the Local
Plan is by seeking to get some sense of scale of the floorspace expected to be produced over
the plan period. In identifying future plans for development in the district we have referred to
the:

Mole Valley Local Development Framework Core Strategy DPD - Adopted October
(2009)

East Surrey Strategic Housing Market Assessment (2007-08)

Mole Valley Local Development Framework Strategic Housing Land Availability
Assessment (2008)

Mole Valley Housing Needs Study (2007)

Mole Valley Annual Monitoring Reports (2013-14) and (2012-13)
3.2
What development is planned?
3.2.1
In total, the Mole Valley Core Strategy envisages a requirement for 3,760 net additional
dwellings between 2006 and 2026, equating to 188 houses per annum. Delivery exceeded
the annual requirement significantly in 2006, however has fallen short in five years since. This
is an important to keep in mind in later sections when forming an appropriate CIL rate.
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Figure 3.1: Previous delivery within Mole Valley against target (dwellings per annum)
600
500
400
300
200
100
0
2006-07
2007-08
2008-09 2009-10
District total
2010-11 2011-12
Target
2012-13
2013-14
3.2.2
Policy CS 3 encourages new housing for the elderly such as specialist accommodation, in
suitable locations. In terms of commercial units the plan does not make a specific requirement
for new retail or employment space within Mole Valley.
3.2.3
The land uses which are likely to account for the largest quantum of development, and hence
are critical to the delivery of the Core Strategy, comprise:

Residential (including retirement units)

Light industrial and warehousing space

Offices

Retail

Leisure and recreation

Public services and community facilities.
3.2.4
The viability assessments and the resulting recommendations focus on these types of
development, aiming to ensure that they remain broadly viable after the CIL charge is levied.
3.3
Where is development likely to take place?
3.3.1
The Mole Valley District Strategic Housing Land Availability Assessment (2008) identifies that
almost half (46%) of the districts housing potential is in the larger locations of Leatherhead
(23%) and Dorking (23%). The SHLAA also identified notable potential in Bookham (18%),
Ashtead (13%) and Fetcham (6.7%). These five locations are referred to as the built up urban
areas (BUAs). The remaining 17% of the districts housing potential has been identified within
rural areas.
3.3.2
The findings from the SHLAA are reflected within the Mole Valley District Core Strategy which,
in policy CS 2, states that “[p]riority will be given to locating new residential development within
the defined built-up areas of Leatherhead, Dorking (including North Holmwood), Ashtead,
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Bookham and Fetcham”. The policy also seeks infilling and limited development within rural
locations.
3.3.3
Data from Mole Valley Districts Annual Monitoring Report (AMR) shows the proportion of
development delivered in each of the built up areas of Ashtead, Bookham, Fetcham, Dorking
and Leatherhead and also for the rural areas. It identifies that over the 8 years between 2006
and 2014 Leatherhead has seen the most housing delivered (31%), followed by Dorking
(24%). The towns of Ashtead, Bookham and Fetcham has seen delivery of 15%, 9% and 5%
respectively, with development in the rural areas accounting for 15%.
Figure 3.2: Previous delivery in different locations within Mole Valley
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Ashtead
3.4
Bookham
Fetcham
Leatherhead
Dorking
Average
2013-14
2012-13
2011-12
2010-11
2009-10
2008-09
2007-08
2006-07
0%
Rural Areas
What types of residential development are likely to take place?
Type of housing provision
3.4.1
The AMR uses findings from the Mole Valley Housing Needs Study (2007) highlighting that
“the largest demand for market housing is for 2 and 3 bedroom homes and the largest need
for dwellings by type is for flats and semi-detached houses”. Further still, the East Surrey
SHMA provides recommendations for 80% of market housing should be between 1 and 3
bedrooms.
3.4.2
Policy CS 3 highlights the requirement for proposals to “reflect local housing needs in terms of
the tenure, size and type of dwellings” noting a preference to see more two and three bedroom
dwellings. Table 3.1 below shows that approximately 70% of units are of three bedrooms and
less.
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Table 3.1: Previous delivery in Mole Valley by dwelling size
2 or less bedrooms
3 or less bedrooms
4 or more bedrooms
2013-14
41%
75%
25%
2012-13
36%
57%
43%
2011-12
49%
71%
29%
Average
42%
68%
32%
Year
Density
3.4.3
Data from the latest AMR identifies that there is a preference for development at fairly low
densities in the district. The report finds that with smaller developments of between 1 and 9
units the density is approximately 20 units per hectare; whilst sites of 10 and more units are
approximately 45 units per hectare. The AMR found that the Leatherhead area has a greater
preference for flatted schemes, and experiences higher densities (38% were over 30 dwellings
per hectare in the last monitoring year).
Table 3.2 Average density of new dwellings delivered in Mole Valley over time
Sites with a
capacity of 1 – 9
dwellings (gross)
Sites of 10 or
more dwellings
(gross)
Average
density of all
sites
2013-14
18.0
23.9
19.5
2012-13
24.4
35.8
30.6
2011-12
20.3
52.0
24.2
2010-11
20.3
41.9
22.5
2009-10
20.3
25.8
22.5
2008-09
22.9
54.8
36.4
2007-08
17.8
74.3
41.5
2006-07
20.1
50.9
38.9
Average
20.5
44.9
29.5
Year
Proportions built on Brownfield / Greenfield
3.4.4
The latest AMR also shows that two thirds of development was built on previously developed
brownfield land over the past three years, as shown in Table 3.3.
Table 3.3: Proportion of units built on brownfield land within Mole Valley
Year
Proportion
2013-14
56%
2012-13
64%
2011-12
82%
Average
67%
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Other Policy costs
3.4.5
The Core Strategy outlines that new dwellings are “encouraged” to include lifetime homes
principles in developments. Since this is not necessarily a policy requirement, it is considered
that it may not necessarily be mandatory to test within our appraisal.
3.5
Consultation with local stakeholders
3.5.1
As part of the research about the local residential and commercial market, telephone
interviews were held with local estate agents and surveyors operating within the district.
What is the housing market like at present?
3.5.2
All of our consultees claimed that the market was very active and noted significant demand for
properties, particularly since April last year. All of which noted that demand is outstripping
supply considerably.
3.5.3
It was considered that there is demand for all property types, although the highest demand
was considered to be for smaller units such as 1 and 2 bedroom flats, and smaller housing,
rather than 4 and 5 bedroom houses, and one agent stating that properties under £425,000
were taken particularly quickly. It was generally accepted that this was the consequence of a
shortage of housing at an affordable price.
3.5.4
In terms of supply of new build properties, it was considered that there were some new
properties on the market, although not enough to meet the high demand in the area. One
consultee noted that a large majority of new dwellings being brought on to the market were
residential properties.
What is a ‘typical value’ for properties within the district? And how do values differ?
3.5.5
In terms of typical values, for flats, where the consultees noted the greatest demand, prices for
new builds in the main towns were considered at between £190,000 to £220,000 for 1 bed
flats and £265,000 to £285,000 for 2 beds. Provision for parking was considered to have a
considerable influence on higher prices.
3.5.6
Many consultees found that a typical 3 bedroom semi-detached house would be in the region
of £440,000. All of the consultees argued that the variance in prices of detached houses was
much greater with figures in the main towns of “anywhere between £550,000 and £850,000”.
Detached housing in the rural villages was considered to be slightly higher still.
3.5.7
When asked about the differences in values between Dorking and Leatherhead, the majority
of consultees noted very little difference between the two centres. Most however noted a
difference between the two centres compared to the rural villages where, on the whole, values
were considerably higher. It was also considered that house prices tend to vary between
villages, some citing villages around Holmbury St Mary where values tend to be higher.
What is the market like for non-residential / commercial units
3.5.8
Generally, business space outside of London has, in recent years, only come forward for prelet opportunities. Their lack of speculative developments has included within the district, but
less so than in most other authorities.
3.5.9
The value of having close proximity to the M25, which crosses the north of the district at
Leatherhead has been particularly attractive to the office market. Evidence is showing that
the office market in this area, to the north of Mole valley in particular, is starting to draw
speculative investment owing to supply levels becoming increasingly under pressure because
of increasing rates of take-up since the recession, This is also linked to the extension of
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Permitted Development Rights, particularly in the nearby London boroughs. Knight Frank
forecast that with prime yields currently at 5.25% and becoming keener, in prime markets
along the M25 corridor which includes Leatherhead, the prime yields to hit sub-5% by the year
end.
3.5.10 Other business spaces, i.e. light industrial units and warehousing, are faring less well.
Particularly the former, with the exception of smaller light industrial units, however this type of
development is still only coming through as pre-let developments normally for local businesses
across the district. For this reason, there may be some new developments relating to specific
business plans, such as the need for replacing obsolescence premises, more than an
expansion within the industrial property market. For this reason, such developments may
come forward close to where there are already existing industrial tenants, which is spread
across the district.
3.5.11 Despite the recent market for asset write downs for the larger supermarket operators, future
investment in new supermarket stores are generally likely to achieve very keen yields because
of the strength of covenants and long leases, which is borne out by the evidence of such
transactions listed in Appendix E.
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4
Residential Market Analysis
4.1
Understanding residential values in Mole Valley
4.1.1
The viability testing uses achieved values of new local houses in order to arrive at a gross
development value of the generic schemes being tested. Therefore, assumptions need to be
made about sales turnover values. These have been sourced from an assessment of the
housing market based on discussions with local developers and agents about their current
experience, and generic websites such as the RightMove and Zoopla.
4.1.2
To help understand the local market we compare average house sales for all properties in
Mole Valley along with values for other areas in Surrey. As can be seen in Figure 4.1 Mole
Valley’s average sales value are amongst the highest in Surrey, discounting Elmbridge, which
has average sales vales significantly higher than neighbouring districts. Since 2010, the
average housing sales value for Mole Valley is £437,600 which is approximately 6% higher
than the Surrey average.
Figure 4.1: Average sales values for all dwellings in neighbouring districts in Surrey
£700,000
ELMBRIDGE
£650,000
EPSOM AND EWELL
£600,000
GUILDFORD
£550,000
MOLE VALLEY
£500,000
REIGATE AND BANSTEAD
RUNNYMEDE
£450,000
SPELTHORNE
£400,000
SURREY HEATH
TANDRIDGE
£350,000
WAVERLEY
£300,000
WOKING
£250,000
2010
2011
2012
2013
2014
Land Registry 2015
4.1.3
As shown in Figure 4.2, properties within Mole Valley shows very little difference between
prices of new properties compared to older properties. This is particularly the case for flatted
developments where the values for new properties and those for second hand units (noted by
the dashed line) have remained similar. For housing (a blend of detached, semidetached and
terraced units) the values are very similar over 2011, 2012 and 2014, but there is a small
difference between new and old in 2010 and 2013.
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Figure 4.2: Comparison between new and secondhand flats and houses within Mole Valley
£650,000
£600,000
£550,000
£500,000
£450,000
£400,000
£350,000
£300,000
£250,000
£200,000
£150,000
2010
4.1.4
2011
2012
2013
New - Flat
New - House
Existing Stock - Flat
Existing Stock - House
2014
Average house prices paid for housing units, including new and old properties, separated into
small geographical areas (known as lower super output areas) across Mole Valley are
mapped in Figure 4.3. The darker the colour the higher the average prices. The map shows
a clear difference in values between the rural areas and the built up urban areas. The map
presents values for all housing (detached, semi-detached and terraced) and therefore does
not take into consideration the differences in these proportions. Nonetheless, the figure acts
as a useful guide as to where values differ within the district.
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Figure 4.3: Average sales values for all dwellings by postcode sectors within Mole Valley (2010-15)
4.1.5
As discussed in the previous section, Mole Valley’s Core Strategy seeks to concentrate
development in the five built up urban areas (BUAs) of Dorking, Leatherhead, Bookham,
Fetcham and Ashtead. Analysis of the new and existing stock transactions, separated into
different types of properties, within Mole Valley is shown in Table 4.1. This shows that there is
very little variance in the broad average sales prices for units within these five larger built up
areas.
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Table 4.1 Land Registry analysis for Mole Valley’s BUAs (existing and new build 2010-2015)
Urban area
4.1.6
Detached
Semi
Terraced
Flat
Dorking
£692,582
£368,791
£315,315
£202,916
Leatherhead
£650,532
£368,956
£304,348
£203,395
Bookham
£626,756
£394,513
£311,901
£189,252
Fetcham
£656,408
£366,697
£277,055
£264,237
Ashtead
£684,625
£412,902
£365,440
£233,756
There is a much greater variance within the rest of the district rural locations, as shown in
Table 4.2. The data covers values from the January 2010, similar to the previous analysis;
however there are a number of gaps, particularly for flatted and terraced developments which
are less popular in these rural locations. The key finding from this data is that values for each
type of property are higher in rural parts of the district than in the built up areas.
Table 4.2 Land Registry analysis for Mole Valley’s rural areas (existing and new build 2010-2015)
Rural location
Detached
Semi
Terraced
Flat
Abinger Common
£1,002,545
£348,850
n.a.
n.a.
Abinger Hammer
£1,250,825
£364,333
£340,000
n.a.
Beare Green
£507,616
£298,047
£327,432
£144,433
Brockham
£622,756
£379,794
£356,864
£259,431
£1,060,417
£427,723
£713,500
£146,500
Capel
£520,283
£338,403
£239,563
£259,115
Charlwood
£433,831
£317,648
£275,097
£190,929
Coldharbour
£816,270
£640,438
£645,000
£419,750
Forest Green
£829,000
£417,850
£307,500
n.a.
Headley
£908,073
£371,813
£606,250
n.a.
Holmbury St Mary
£875,000
£564,333
£755,000
n.a.
Holmwood
£687,750
£343,978
£350,176
£415,000
Hookwood
£431,543
£256,554
£211,675
£117,000
Leigh
£796,710
£391,250
£396,667
£307,000
Mickleham
£684,800
£384,167
£950,000
£400,000
Mid Holmwood
£726,000
£333,438
£274,333
£271,250
Newdigate
£732,781
£431,920
£442,490
£190,817
North Holmwood
£441,164
£296,610
£238,233
£138,008
Ockley
£836,961
£445,550
£286,377
n.a.
Okewood Hill
£1,168,000
£496,666
n.a.
£206,500
Strood Green
£392,500
£337,471
£296,095
n.a.
Walliswood
£549,682
£321,750
n.a.
n.a.
Westcott
£791,555
£327,427
£371,092
£234,466
Westhumble
£962,844
£496,388
£608,417
£584,833
Buckland
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Rural location
Wotton
Detached
Semi
Terraced
Flat
£687,625
£372,500
£470,000
£271,250
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5
Residential Development Assumptions
5.1
Introduction
5.1.1
Having looked at the different value areas within Mole Valley in the previous section, the
objective here is to allocate future development sites in Mole Valley to an appropriate
development category. This allows the study to deal efficiently with the very high level of
detail that would otherwise be generated by an attempt to viability test each site. This
approach is proposed by the Harman Report, which suggests:
‘a more proportionate and practical approach in which local authorities create and test a range
31
of appropriate site typologies reflecting the mix of sites upon which the plan relies’.
5.2
Residential typologies
5.2.1
The typologies used for viability testing are supported with a selection of case studies
reflecting CIL guidance (2014), which suggests that:
‘a charging authority should directly sample an appropriate range of types of sites across its
area, in order to supplement existing data. This will require support from local developers. The
exercise should focus on strategic sites on which the relevant Plan relies, and those sites
where the impact of the levy on economic viability is likely to be most significant (such as
brownfield sites). The sampling should reflect a selection of the different types of sites
included in the relevant Plan, and should be consistent with viability assessment undertaken
32
as part of plan-making.’
5.2.2
Importantly, the Harman Report states that the role of the typologies testing is not required to
provide a precise answer to the viability of every development likely to take place during the
plan period:
‘No assessment could realistically provide this level of detail…rather, [the role of the
typologies testing] is to provide high level assurance that the policies within the plan are set in
a way that is compatible with the likely economic viability of development needed to deliver the
33
plan.’
5.2.3
Indeed the Harman Report also acknowledges that a:
‘plan-wide test will only ever provide evidence of policies being ‘broadly viable.’ The
assumptions that need to be made in order to carry out a test at plan level mean that any
specific development site may still present a range of challenges that render it unviable given
the policies in the Local Plan, even if those policies have passed the viability test at the plan
level. This is one reason why our advice advocates a ‘viability cushion’ to manage these
34
risks.
5.2.4
We have identified a set of development typologies for Mole Valley. These have been
informed by a number of planning policies that outlined the development context in the
previous section (such as the Core Strategy, the SHLAA, the AMRs and the SHMA). The
typologies are also formed by consultation with the council regarding what developments they
can reasonably envisage in the district.
31
Local Housing Delivery Group Chaired by Sir John Harman (2012) Viability Testing Local Plans (p.9)
DCLG CIL Guidance 2014 (p.16).
33
Local Housing Delivery Group ( 2012), op cit (para 15)
34
Ibid (para 18)
32
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5.2.5
Whilst these broadly follow the types of sites likely to be identified in the Plan as a source of
future housing supply, they are not intended to represent any fully detailed planning
applications for actual future developments. The selected typologies are purely for modelling
viability and their inclusion does not necessarily mean that they will be included within future
versions of the Plan. Likely development scenarios have been grouped in areas where values
and costs are broadly similar – this is to reduce the number of potential scenarios and overall
complexity – these groupings do not necessarily have any geographical similarities.
5.2.6
The tested development typology types are set out in Table 5.1. The column ‘Settlement’
refers to where development is likely to take place, understanding that different locations may
have different characteristics such as sales values. To reflect the more significant differences
in values, these are grouped either as within ‘Built up areas’ (BUAs) or and development
outside of these areas, which for the purpose of this study, are referred to as ‘Rural’.
5.2.7
As discussed, the Mole Valley Core Strategy intends that the bulk of development in focussed
in the five built up areas. We have therefore chosen to consider schemes that might come
forward, which are likely to range from 1 dwelling to 90 dwellings in each of these areas. We
also test a 40 unit scheme that is comprised of flats, in order to examine the viability for this
type of scheme. For the rural areas, we understand that the Core strategy sets out a
preference for much smaller sites and have therefore tested developments up to a maximum
of 24 dwellings.
Table 5.1 Notional sites used for residential viability testing
5.2.8
Typology
Settlement
Land type
Dwelling Capacity
1 unit BUA
BUA
Brownfield
1
4 units BUA
BUA
Brownfield
4
9 units BUA
BUA
Brownfield
9
14 units BUA
BUA
Brownfield
14
24 units BUA
BUA
Brownfield
24
30 units BUA
BUA
Brownfield
30
40 units BUA
BUA
Brownfield
40
90 units BUA
BUA
Greenfield
90
40 units BUA (flatted)
BUA
Brownfield
40
1 unit Rural
Rural
Greenfield
1
4 units Rural
Rural
Greenfield
4
9 units Rural
Rural
Greenfield
9
14 units Rural
Rural
Greenfield
14
24 units Rural
Rural
Greenfield
24
Extra care
District Wide
Brownfield
45
Retirement home
District Wide
Brownfield
55
We have allowed for a set of residential viability tests to cover notional developments of
different sizes, locations, densities and mixes, greenfield/brownfield as well affordable
housing. The different modelled typologies have also been used to assess different density
and location factors. To provide a robust evidence base, it was important that we modelled
this broad cross section of development types. In the viability assessments and the resulting
recommendations, we have focussed on these types of development, aiming to ensure that
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they remain broadly viable after any policy requirements, including affordable housing, is
applied, before considering if there would be any headroom for setting a CIL charge.
Testing of Retirement schemes
5.2.9
Within the typologies, a typology for the type of housing for older people likely to come forward
has been tested. For this, we consider three types of retirement schemes as defined below.
Retirement homes – also known as sheltered housing, these are defined as groups of
dwellings, often flats and bungalows, that provide independent, self-contained homes. We
consider that in addition to this, there will likely be some element of communal facilities, such
as a lounge or warden. A service charge will be in place to cover the normal ongoing costs but
also incur additional costs to upkeep communal facilities as described.
Extra care – also known as assisted living by the private sector. It is provided across a range
of tenures (owner occupied, rented, shared ownership/equity). This is housing with care
whereby people live independently in their own flats but have access to 24 hour care and
support. These are defined as schemes designed for an elderly population that may require
further assistance with certain aspects of their day to day life. Arrangements for care provision
vary between care provided according to eligible assessed need by the local authority and
people purchasing privately who may not have such a high level of need which is on site and
is purchased according to need. For private sector developments the care facilities are
normally part of a care package with additional fees to pay for the service and facilities, which
are on top of normal service charges and the cost of purchasing the property. The schemes
will often have their own staff and may provide one or more meals per day. We consider
these as schemes that will likely have a greater proportion of communal space than retirement
homes and a likely to be built to standards likely to suit an older population, i.e. wheelchair
access, better designed bathroom facilities.
Care homes – residential or nursing homes where 24 hour personal care and/or nursing care
are provided together with all meals. People occupy under a licence arrangement. These are
considered within the non-residential viability appraisals as many of their properties are
considered to be more akin to these types of development.
5.2.10 Retirement homes and Extra care schemes are treated as residential schemes, but care
homes are tested later, in Chapter 7, as non-residential, because they share many
characteristics to other commercial property developments.
5.3
Value assumptions
5.3.1
It is not always possible to gain a perfect fit between a site, the site profile and cost/revenue
categories but we have attempted a best fit in the spirit of the Harman Report. For this, the
viability testing requires a series of assumptions about the site coverage and floorspace mix to
generate an overall sales turnover and value of land, which are discussed here.
Site coverage
5.3.2
The net (developable) area of the site informs the likely land value of a residential site.
Typically, residential land values are normally reported on a per net hectare basis, since it is
only this area which delivers a saleable return. This is an industry standard measurement.
5.3.3
For the residential typologies, the net developable areas have been derived using a formula
based on discussions with the wider development industry and examples from elsewhere.
Details on gross and net areas for each typology are shown in Appendix A.
35
35
Uses a non-linear formula to estimate the net area from the gross area, so that the greater the number of units that there are
the greater the amount of gross to net land area.
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Saleable area
5.3.4
In addition to density, the type and size of units is important because this informs overall
revenue based on saleable floorspace, to generate an overall sales turnover.
5.3.5
The type of unit and size of these likely to come forward in Mole Valley to derive saleable
floorspace have been informed by the Strategic Housing Land Availability Assessment Report
(2008), alongside discussions with local agents and judgement based on experience.
5.3.6
Two floor areas are used for flatted schemes: the Gross Internal Area (GIA), including
circulation space, is used to calculate build costs and Net Internal Area (NIA) is applied to
calculate the sales revenue.
5.3.7
Details are shown in Appendix A.
Sales values
5.3.8
5.3.9
Current residential revenues and other viability variables are obtained from a range of
sources, including:

Land Registry, as considered in a previous section, provides a wealth of data of
transactional for new and second hand properties in a local area.

Property websites, such as Zoopla and Rightmove, provide a snapshot of values of
properties currently on the market and in some cases will provide the floorspace of new
developments, which enables a sales value per square metre to be estimated. A crosssection of some of the properties considered is listed in Appendix E.

Direct research with developers and agents operating in the area.
We discuss the evidence for the sales assumptions and distribution in the market assessment
section of this report. In summary, from analysing the average size of developments likely to
come forward in each value area, and using the value data provided by Land Registry, along
with feedback from the local development industry, we have arrived at the sales values shown
in Table 5.2. These are used in the plan wide viability assessment.
Table 5.2: Sales values (£ p sqm) used in testing viability
Location/use
House price
Flat price
Built up urban area
£4,300
£3,600
Rural area
£4,740
£3,700
Source: PBA derived from Land Registry, (2014) Rightmove / Zoopla, (2014); websearch
Housing for older people
5.3.10 A Three Dragons guidance for appraising residential developments for older people, which
was produced on behalf of a trade organisation for developers of housing for older people,
suggests sales prices for 1 bed retirement homes to be in the region of 75% of the price of
existing three bed semi-detached properties in that location, with 2 bed retirement properties
36
equal to the full value of a three bed semi-detached house . Land Registry data indicates
that the average sales value for a semi-detached house in the Built up areas is £376,324 and
£364,352 in the rural areas. According to land registry data, semi-detached housing is the
36
“A briefing note on viability prepared for Retirement Housing Group by Three Dragons”, Three Dragons, May
2013.
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only housing type where, on average, sales values in the previous five years have been higher
within the built up area than outside.
5.3.11 The split of market led 1 bed and 2 bed properties for older people is typical 60% and 40%
respectively, so therefore in following the RHG guidance, this would suggest that the sales
value for retirement home properties would be in the region of 85% of the above values, which
equates to £319,875 (or £5,331 per sqm) in the built up areas and £364,352 (or £5,162 per
sqm). Given the similarity in sales values between the built up urban areas and the rural
areas, there is not sufficient difference to require separate viability testing across these two
broad locations.
5.3.12 To sense check these values, we compare them with the values achieved in the sample
shown in Table 5.3 below which are existing and similar schemes which have come forward in
Mole Valley or in similar areas in the region. With relatively fewer ‘New’ retirement properties
currently available, a number of second hand units have been included in the sample,
however these fail to reflect the premiums achieved on new builds, which for retirement
properties is normally substantial. Taking the values below into account along with the
guidance, we have used a sales value for retirement properties of £4,950 per sqm, equivalent
to a sales value of £297,000 per unit, in both the BUAs and rural sites.
Table 5.3: Sales values of homes for older people within or near Mole Valley.
Location
Area
Average
price
Size
(Sqm)
Price per
New or
sqm Secondhand
2 bedroom apartment for sale, Furze
Hill Court , Kingswood
Kingswood
£324,950
72
£4,513
New
3 bedroom bungalow for sale, Abinger Dorking
Lane,
£400,500
79
£5,070
S/H
2 bedroom bungalow for sale, Dorking Dorking
£324,000
77
£4,208
S/H
Bartholemew Court, Dorking RH4
2EN, 2 bedroom ground floor flat for
sale
Dorking
£150,000
44
£3,409
S/H
2 bedroom retirement property for
sale, 30 Sondes Farm,
Dorking
£385,000
70
£5,500
S/H
Station Road, Dorking
Dorking
£168,000
50
£3,368
S/H
Canterbury Court, Station Road, RH4
Dorking
£165,000
49.5
£3,333
S/H
Woodlands Park, Tadworth, Surrey
Betchworth
£434,000
148
£2,932
S/H
2 bedroom retirement property for
sale, Harroway Manor
Fetcham
£395,000
82.7
£4,776
S/H
1 bedroom retirement property for
sale, Holly Court
Leatherhead
£149,950
43.6
£3,439
S/H
Clarence Court, 1 bed, Brighton
Road, Horsham, West Sussex, RH13
5TS
Horsham
£234,950
56
£4,196
New
Clarence Court, 1 bed, Brighton
Road, Horsham, West Sussex, RH13
5TS
Horsham
£269,950
56
£4,821
New
Clarence Court, 2 bed, Brighton
Road, Horsham, West Sussex, RH13
5TS
Horsham
£344,950
89.5
£3,854
New
Clarence Court, 2 bed, Brighton
Road, Horsham, West Sussex, RH13
Horsham
£363,950
89.5
£4,066
New
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5TS
The Holman At Durrants Village
Faygate Lane, Faygate, Horsham,
RH12 4SJ
Horsham
£525,000
130
£4,039
New
The York At Durrants Village Faygate
Lane, Faygate, Horsham, RH12 4SJ
Horsham
£499,995
141
£3,546
New
The Wakeley At Durrants Village,
Faygate Lane, Faygate, Horsham,
RH12
Horsham
£399,995
115
£3,478
New
5.3.13 The evidence base for Extra care units is considerably smaller. Therefore with the lack of
evidence available, to calculate a value for Extra care schemes we have followed the Three
Dragons guidance and applied an uplift of approximately 25% on the value for Retirement
homes. This equates to an average sales value per property of £5,400 sqm, which is
£383,400 per unit.
Table 5.4 Sales values for testing new older person housing
Location/use
Value (£ per sqm)
Retirement home
£4,950
Extra care / assisted living
£5,400
Source: PBA derived from Land Registry, (2015) Rightmove / Zoopla, (2015); online search
5.3.14 The assumptions for sizes of schemes catering for older person housing, including the number
of units and densities, can be found in Appendix A. In summary, we test retirement homes at
a density of 100 dwellings per hectare for extra care properties and 120 dwellings per hectare
for retirement units, which is in line with guidance issued by Three Dragons.
5.3.15 For the net internal area of the units, we have used sizes of 60sqm for Retirement homes and
71sqm for Extra care schemes, which is again informed by Three Dragon’s guidance
regarding appropriate sizes for 1 and 2 bed properties and based on a 60:40 split between the
two.
5.3.16 We have assumed that Retirement homes and Extra care schemes have an allocation of
floorspace considered as non-chargeable functions and communal space; however it is not
unlikely that this space will have a value too in terms of the business functions relating to
providing housing for older people. Again, we have followed Three Dragons guidance of 25%
for Retirement properties and 35% for Extra care schemes. We have therefore assumed that
the gross built floorspace per unit is 71 sqm for Retirement properties and 96 sqm for Extra
care units.
5.3.17 We have tested the schemes to be brought forward on brownfield land, and therefore incurring
certain costs involved with demolition and remediation as discussed in a subsequent section.
Affordable housing value
5.3.18 Affordable housing will have an impact on the total value of scheme which includes an
affordable housing content. Therefore the viability testing assumes that the affordable housing
will command a transfer value to a Registered Provider at lower than market rates. The values
used have been informed by evidence of recent deals and discussion with the Council’s
housing team. These are as follows:

Social rent properties at 45% of market value
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
Affordable rent properties at 55% of market value

Intermediate properties at 65% of market value
5.4
Build costs
5.4.1
Residential build costs are sourced from Build Cost Information Service (BCIS), which is
published by the Royal Institution of Chartered Surveyors (RICS). These costs are based on
a sample of tender prices for new builds over a 15 year period rebased to Quarter 2 2014 and
Mole Valley prices. This is used to provide a median build costs for small, medium and large
schemes as shown in Table 5.5.
5.4.2
Volume and regional house builders are able to operate within the median district cost figures
comfortably, especially given that they are likely to achieve significant economies of scale in
the purchase of materials and the use of labour. Many smaller and medium sized developers
of houses are usually unable to attain the same economies, so their construction costs may be
higher, as shown in Table 5.5. These differences are reflected in the testing with the higher
costs for schemes with 3 or less houses (taken from BCIS) and an assumption of higher costs
for 4-14 houses (taken as a mid-point between the larger and small schemes). There is no
difference in flats, because these are normally built new by larger developers.
5.4.3
The BCIS build costs are exclusive of External works, Contingencies, Fees, VAT and Finance
charges, plus other revenue costs.
Table 5.5: Median build costs in Mole Valley at 2015 tender prices, flats & housing (per sqm)
Dwelling
type
Small housing scheme
(3 or less units)
Estate housing
(15+ units)
£1,317
Flats
Houses
Medium sized house
scheme (4 to 14 units)
£1,375
£1,271
£1,167
Source: PBA derived from BCIS
5.4.4
Additionally, Table 5.6 provides the assumed costs for older people housing schemes. In
terms of build costs we have used figures supplied by BCIS as per the original report. These
figures reflect the in Three Dragons guidance of uplifting costs on 1-2 story flats by 9% and
13% respectively for retirement homes and Extra care homes.
Table 5.6: Median build costs in Mole Valley at 2015 tender prices, older people units (per sqm)
Dwelling type
Homes for older people
Retirement homes
£1,353
Extra care
£1,402
Source: PBA derived from BCIS
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Sustainability and building standards
5.4.5
The BCIS tender price at April 2014 may not reflect the latest England Building Regulations
(Part L, 2013), which came into effect from April 2014. Building Regulations (currently Part L,
2013) were amended to require emission reductions, to give an overall 6% improvement to
2010 standards. This standard is estimated to add approximately £450 in costs per home
above the 2010 Building Regulation standards (this is based on the Government's Regulatory
Impact Assessment findings). This increase is taken into account in the viability assessments.
5.4.6
Building Regulations are different to the requirements set out in the Code for Sustainable
Homes (CfSH). The Code outlines a staged framework to improve the overall sustainability of
new homes. The Government has recently simplified national standards and introduced
transitional arrangements to move away from the CfSH to a national system of standards.
5.4.7
Whilst the Government is no longer intending to support a range of local standards in the
future, they have indicated that they will allow local authorities, through planning policy, to
seek improved Building Standards in their locations. For authorities wishing to incorporate this
into planning policy this will have limited cost implications that will need to be considered –
however, at this stage the Council is not intending to introduce a mandatory policy requiring
development to meet a higher level of sustainable development.
5.4.8
Similar to the Building Regulations, the Government is also reviewing space standards and is
currently considering a national voluntary policy on space standards. The details of this have
now been published.
External works
5.4.9
This input incorporates all additional costs associated with the site curtilage of the built area.
These include garden space with housing units, incidental landscaping costs including trees
and hedges, soft and hard landscaping, estate (access) roads and connections to the strategic
infrastructure such as sewers and utilities.
5.4.10 The external works variable has been estimated based on industry standards of 10% extra
over on the unit build cost.
5.5
Other development costs
Professional fees
5.5.1
This input incorporates all professional fees associated with the build, including fees for
designs, planning, surveying, project managing, etc., based on industry standards at 10% of
build cost and externals.
Contingency
5.5.2
It is normal to build in contingency based on the risk associated with each site and has been
calculated based on industry standards. It is applied at 5% of build cost and externals.
S106 costs
5.5.3
The council have provided the information in Table 5.7 on s106 receipts over the last five
years. During this period, the average s106 contribution per dwelling (excluding affordable
housing units) has been about £4,000 per unit.
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Table 5.7 S106 payments received in Mole Valley
Value of S106
contributions
Gross housing
completions
Affordable housing
completions
Gross completions net
of AH completions
S106 contribution per
market dwelling
5.5.4
2010/11
2011/12
2012/13
2013/14
2014/15
Total
£606,084
£1,154,412
£569,886
£645,600
£592,799
£3,568,781
148
262
207
147
209
973
0
39
14
7
22
82
148
223
193
140
187
891
£4,095
£5,177
£2,953
£4,611
£3,170
£4,005
This figure includes infrastructure requirements anticipated for the majority of small sites
(under 10 dwellings), which are likely to be met through off site delivery of infrastructure such
as schools expansions, open space enhancements or transport improvements, which would
be covered by a CIL. For the purpose of testing, it is accepted that there should be a
reasonable allowance for site mitigations and therefore we include an S106 of £4,000 for each
open market dwelling as a cost for the purposes of a high level viability test for identifying the
potential for further infrastructure payments through a CIL charge.
Opening-up costs
5.5.5
Developing greenfield, brownfield and mixed sites represent different risks and costs. These
costs can vary significantly depending on the site's specific characteristics. To reflect
additional costs associated with the tested site typologies, the following assumptions apply:


For brownfield site development for residential purposes, we have increased the build
costs (for demolition and remediation) as follows:
o
Brownfield
£200,000 per net ha
o
Mixed
£100,000 per net ha
We also make an allowance for opening up works such as utilities, land preparation,
SuDS and estate spine roads. There will be different levels of development costs
according to the type and characteristics of each site. Opening up costs vary but
generally increase as schemes get bigger. Owing to the nature of being generic
appraisals, we apply an allowance for opening costs based on the size of site. Therefore,
37
we assume the following opening costs :
o
Less than 200 units
o
201-500 units
£10,000 per unit
o
501 plus units
£17,000 per unit
£5,000 per unit
Land purchase costs
5.5.6
The land value needs to reflect additional purchase cost assumptions, shown in Table 5.8.
These are based on surveying costs and legal costs to a developer in the acquisition of land
and the development process itself. These have been established from discussions with
37
Only when detailed masterplanning is undertaken is there likely to be a better understanding of these various
costs (site opening costs, site abnormals, and strategic infrastructure such as schools, highways etc.) to inform
site specific assessments.
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developers and agents, and are also reflected in the Harman Report (2012) as industry
standard rates.
Table 5.8 Land purchase costs
Land purchase costs
Rate
Unit
Surveyor's fees
1.00%
land value
Legal fees
0.75%
land value
HMRC rate
land value
Stamp Duty Land Tax
5.5.7
A Stamp Duty Land Tax is payable by a developer when acquiring development land. This
factor has been recognised and applied to the residual valuation as percentage cost based on
the HM Customs & Revenue variable rates against the residual land value.
Sales fees
5.5.8
The Gross Development Value (GDV) on open market housing units need to reflect additional
sales cost assumptions relating to the disposing of the completed residential units. This will
include legal, agents and marketing fees at the rate of 3% of the open market unit GDV, which
is based on industry accepted scales established from discussions with developers and
agents.
Finance
5.5.9
We have used a monthly cashflow based on a finance cost of 6% throughout the sites
appraisals. This is used to account for the cost of borrowing and the risk associated with the
current economic climate and the near term outlook and associated implications for the
housing market. This is a typical rate which is being applied to schemes of this nature. Recent
consultation with a local bank representative has confirmed that this figure is appropriate.
5.6
Developer’s profit
5.6.1
The developer's profit is the expected and reasonable level of return that a private developer
would expect to achieve from a specific development scheme. We assume a profit of 20% in
Mole Valley applied to open market sales (i.e. GDV). This also allows for internal overheads.
5.6.2
For the affordable housing element, because they will have some, albeit lower risks to the
developer, we assume a lower 6% of affordable housing sales (GDV) profit margin for the
private house builders on a nil grant basis. This is applied to the below market transfer value
of the affordable housing residential dwelling content.
5.7
Benchmark threshold land values
5.7.1
To assess viability, the residual value generated by a scheme is compared with a benchmark
land value, which reflects ‘a competitive return for a landowner’ (as stated in the Harman
report) threshold. The threshold land value is important because it is benchmarked against the
residual value obtained through the viability testing to identify any differences. If the
benchmark value is lower than the obtained residual value, then this provides a potential
source for charging a CIL.
5.7.2
The approach used to arrive at the threshold land value is based on a review of recent viability
evidence of sites currently on the market, a review of viability tests in support of planning
applications, published data on land values and discussions with council officers and the local
development industry. The approach follows a top down approach of current market value of
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serviced plots and a bottom up approach of existing use values. Account has been taken of
current and proposed future policy requirements. This approach is in line with the Harman
report and recent CIL examination reports, which accept that authorities should work on the
basis of future policy and its effects on land values and well as ensuring a reasonable return to
a willing landowner and developer.
5.7.3
In collecting evidence on residential land values, a distinction has been made for sites that
might reflect extra costs for ‘opening up, abnormals and securing planning permission’ from
those which are clean or ‘oven-ready’ residential sites. The values in Table 5.9 all refer to
smaller, brownfield infill sites with planning permission, and are therefore likely to be valued
higher than what we could consider as appropriate for our viability testing, which reflects sites
pre planning. Additionally, as these are the ‘for sale’ values in rightmove there is a view that
these reflect hope values as opposed to the actual transaction amount.
Table 5.9 Land values for sites with planning permission within Mole Valley at 2015
Broad Location
Sales price
Area (ha)
£ per ha
£635,000
0.12
£5,230,643
£1,100,000
1.27
£865,655
Leatherhead
£900,000
0.12
£7,413,143
Walton on the Hill
£850,000
0.20
£4,200,788
Kingswood
£1,400,000
0.20
£6,918,945
Kingswood
£1,395,000
0.22
£6,267,494
West Horsley
£335,000
0.13
£2,508,492
Kingswood
£790,000
0.20
£3,904,262
Dorking
£900,000
0.61
£1,482,631
Dorking
£160,000
0.05
£3,555,556
Oxshott
£1,695,000
0.23
£7,434,211
Leatherhead
£1,600,000
0.57
£2,792,321
Norwood Hill
£2,500,000
1.21
£2,066,116
Horley, Surrey
£450,000
0.05
£9,000,000
South Holmwood, Surrey
£700,000
0.11
£6,363,636
Reigate, Surrey
£975,000
0.20
£4,875,000
Oxshott, Surrey
£1,250,000
0.16
£7,812,500
Cobham, Surrey
£1,250,000
0.19
£6,578,947
Walton on the Hill, Surrey
£1,500,000
0.19
£7,894,737
Leatherhead, Surrey
£1,650,000
0.40
£4,125,000
Walton on the Hill, Surrey
£1,800,000
0.29
£6,206,897
Oxshott, Surrey
£2,750,000
0.40
£6,875,000
Horley
Dorking
Source: Rightmove, 2015
5.7.4
It is important to appreciate that assumptions on benchmark/threshold land values can only be
broad approximations subject to a wide margin of uncertainty. This uncertainty is considered
when drawing conclusions and recommendations. We have examined cross sections of
comparable residential land to identify transactions which are either clean greenfield sites or
existing non-residential use urban brownfield sites, fully serviced with roads and major utilities
to the site boundary.
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5.7.5
Taking this into consideration, along with discussion with local agents, for the purposes of this
report and testing viability, the benchmark/threshold values used in testing viability are shown
in Table 5.10. We have made an assumption that the retirement homes schemes are based
on the highest values of £3,500,000.
Table 5.10 Land values used in viability testing
Broad Location
Sales price
Small Brownfield
£3,500,000
Small Greenfield
£3,500,000
Greenfield
£3,000,000
Brownfield
£2,500,000
Strategic site
£2,000,000
Retirement Scheme
£3,500,000
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6
Residential Development Viability Analysis
6.1
Introduction
6.1.1
This section sets out the assessment of residential development viability and also summarises
the impact on viability of changes in values and costs, and how this might have an impact on
the level of potential CIL that could be set.
6.2
Viability testing results
6.2.1
Each generic site has been subjected to a detailed appraisal, complete with cashflow analysis.
Table 6.1 summarises each of these generic residential development appraisals, identifying if
a site is viable, and if so what the maximum headroom would be for levying a CIL charge,
However, as we explain below, we do not recommend that this theoretical maximum be
directly translated into a CIL Charge.
Table 6.1 Summary of generic residential site viability assessments
Affordable
Dwelling
CIL liable
housing
Capacity
£psqm
contribution
Generic Site ID
Type of site
Viable
1 Unit BUA
Small Brownfield
1
0%
£238
Yes
4 Units BUA
Small Brownfield
4
0%
£188
Yes
9 Units BUA
Brownfield
9
0%
£490
Yes
14 Units BUA
Brownfield
14
30%
£443
Yes
24 Units BUA
Brownfield
24
40%
£412
Yes
30 Units BUA
Brownfield
30
40%
£504
Yes
40 Units BUA
Brownfield
40
40%
£508
Yes
90 Units BUA
Greenfield
90
40%
£390
Yes
40 Units BUA (flatted)
Brownfield
40
40%
-£9
1 Unit Rural
Small Greenfield
1
0%
£619
Yes
4 Units Rural
Small Greenfield
4
0%
£428
Yes
9 Units Rural
Greenfield
9
0%
£617
Yes
14 Units Rural
Greenfield
14
30%
£687
Yes
24 Units Rural
Greenfield
24
40%
£632
Yes
Marginal
6.2.2
All the hypothetical sites assessed were shown to be viable at the current policy levels
including any affordable housing and s106. The only exception is the 40 unit flatted scheme,
which is only marginally unviable and therefore would not afford a CIL payment in addition to
the other levied policy costs.
6.2.3
The difference between the rural areas and the built up areas is particularly distinct, with
headrooms in the rural areas notably higher than those in the built up areas. In PBA’s view,
this variation in values between the two distinct settlements types warrant the requirement to
consider introducing two separate charging zones across the district.
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6.2.4
A notable characteristic of development within Mole Valley district is the preference to develop
at comparatively lower densities. Coupled with high land values, this has meant the
headrooms in Table 6.1 are more depressed than what we might expect from the standard
developments expected.
6.2.5
Although CIL is based on current costs and values, some sensitivity analysis has been
undertaken to illustrate to the Council what the viability would be if values or costs were to
increase, which in the current economic environment is the most likely scenario. CIL rates
should be based on current costs and value, and not the sensitivity analysis. However, should
values and costs rise in the future then the sensitivity analysis does help the Council to
consider when it may be appropriate to review the CIL charge. The results are shown in
Appendix C.
6.2.6
It can be seen that across the site typology viability results that the impact of national policy on
affordable housing thresholds, where it applies on developments with more than 10 units, is
not that significant. This finding is not uncommon in high value areas, such as Mole Valley,
where the value paid for affordable housing units (as a percentage value of open market
housing) are likely to be substantially higher than build costs, and because affordable housing
is exempt from CIL, so that the achieved headroom between total costs and total value is able
to be levied only on the open market units, which creates a higher rate than if it was to be
spread across all units. In high value areas, the change in the residual land value is much
smaller relative to the change in the reduction of liable floorspace, and therefore the impact of
affordable housing on the CIL charge is not as significant as might be expected.
6.3
Testing of dwellings for older people
6.3.1
Our testing of extra care and retirement properties showed that these schemes are viable to
accommodate a considerable CIL rate. The headroom for both retirement and extra care
homes appears to look similar to testing for the other typologies tested, and would be able to
sustain a broadly similar CIL rate.
Table 6.2 Summary of dwellings for older people site viability assessments
Affordable
Dwelling
CIL liable
housing
Capacity
£sqm
contribution
Generic Site ID
Type of site
Viable
Extra care
Brownfield
45
40%
£443
Yes
Retirement home
Brownfield
55
40%
£440
Yes
6.4
Residential viability zones
6.4.1
As previously stated CIL Regulations (Regulation 13) allow the charging authority to introduce
charge variations by geographical zone within its area, by land use, or both. All differences in
rates need to be justified by reference to the economic viability of development. Setting up a
CIL which levies different amounts on development in different places increases the
complexity of evidence required, and may be contested at examination. However, it will be
worthwhile if the additional complexity generates significant additional revenues for the
delivery of infrastructure and therefore growth.
Principles
6.4.2
Identifying different charging zones for CIL has inherent difficulties. One reason for this is that
house prices are an imperfect indicator; we are not necessarily comparing like with like. Even
within a given type of dwelling, such as terraced houses, there will be variations in quality or
size which will impact on price.
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6.4.3
Another problem is that even a split that is correct ‘on average’ may produce anomalies when
applied to individual houses – especially around the zone boundaries. Even between areas
with very different average prices, the prices of similar houses in different areas may
considerably overlap.
6.4.4
A further problem with setting charging area boundaries is that they depend on how the
boundaries are defined, as well as the reality of actual house prices. Boundaries drawn in a
different place might alter the average price of an area within the boundary, even with no
change in individual house prices.
6.4.5
To avoid these statistical and boundary problems, it is considered that a robust set of
differential charging zones should ideally meet two conditions:
6.4.6
i.
The zones should be separated by substantial and clear-cut price differences; and
ii.
They should also be separated by substantial and clear-cut geographical boundaries – for
example with zones defined as individual settlements or groups of settlements, as urban
or rural parts of the authority. We certainly should avoid any charging boundaries which
might bisect a strategic site or development area.
It will be for the local authority to determine an appropriate zone, however this decision should
be based on the viability evidence within this report.
Method
6.4.7
Setting zones requires the marshalling of an ‘appropriate available evidence’ available from a
range of sources in order to advise on the best way forward. The following steps were taken:

First step was to look at home prices. Sales prices of homes are a good proxy for
viability. Land Registry data has been used to do this.

Secondly, consultation with the Council on the distribution of development

Thirdly, testing of this through formal development appraisals.
House prices
6.4.8
In advising on charging zones, the first step was to look at residential sales prices. Figure 4.4
and the associated analysis within that section of the report, shows the average sales prices a
heat map of all homes over a three year period, where values are separated into postcode
sectors. Maps enable a better analysis of the broad contours of residential prices in the
district. Also, sales prices are a reasonable, though imperfect, proxy for development viability,
so the maps provides us with a broad idea of which areas would tend to have more viable
housing developments, other things being equal.
6.4.9
The maps show that prices do vary across the district, especially particularly between the
following two broad areas:

The highest values are achieved in the rural peripheral areas of the district, and;

The lower values within the built up urban areas. (As discussed previously, PBA do not
consider there to be a sufficient difference in values to justify separate charging zones
between the five urban areas.)
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Distribution
6.4.10 It is also important to analyse how development is distributed before coming to a decision. If
all development was going in a single price area, making geographical distinctions in the
charging schedule would not be necessary.
6.4.11 Understanding the patterns of development is therefore the next stage in our analysis. If the
broad future housing supply is considered in relation to the average price bands, the scope for
separate charging bands for residential development can be better understood. This is shown
in Table 6.3. The local plan makes a distinction between development located within the built
up areas and those in rural locations, which is considered appropriate and fairly uncomplicated
for setting two separate CIL charging rates.
Table 6.3 Distribution of developments within Mole Valley
Settlement
Anticipated nr
of dwellings
Potential maximum CIL
(headroom £psqm)
BUAs
83%
£364
Rural
17%
£628
Testing
6.4.12 Table 6.3 above also shows the potential CIL ceiling by area. As can be seen, like values,
there are substantial variations between individual settlements and within the larger
settlements. There are however some discernable patterns:

CIL headroom in the built up urban areas, ranges from -£9 to £508, as flatted
developments appear notably less viable than other units in the area. A weighted
average of these headroom’s would suggest a maximum of £364.

Rural areas see strong values across the district with headroom’s ranging between £428
and £687. Again, a weighted average of these suggests a maximum figure of £628.
6.4.13 Our testing has focused on areas where the local authority has planned for growth which is on
a settlement basis and therefore, in showing these value areas, it is recommended that
settlement or parish boundaries could be used as a proxy to show boundaries as long as they
are defined and the value areas do not cross strategic sites. There will always be areas or
types of development that do not neatly fit a value area because these are generic studies.
However as long as the majority of development is not put at risk, and the Council can still
broadly achieve Plan objectives, then the approach is acceptable.
6.5
Recommending a residential CIL charge
6.5.1
The summary table discussed above indicates that CIL charges would be capable of being
sustained in the area without putting at risk the bulk of development activity required to
support future housing growth in line with the Core Strategy. However, we are likely to
recommend that the charge is set well under this point. The principal reasons for this are that:

Development is unavoidably uncertain and generic assessments of viability, as
undertaken here, have a significant margin of error;

Costs and values are likely to fluctuate over time and vary between different sites, which
could make the charge unsustainable without a contingency margin; and
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
Site-specific issues will adversely affect costs or values in some cases. In particular,
some sites developments may involve significant abnormal costs.
6.5.2
It is conceivable that a simple, arithmetical approach could be used to take us from the
maximum headroom that the summary table suggests is available for CIL, to a recommended
CIL Charge. For example, it would be possible to set a CIL at a percentage of the headroom
indicated in the viability testing and to mechanically apply this deflator. However, we prefer to
use our professional judgement based on experience (including recent CIL Examinations) and
make recommendations for the LPA to consider.
6.5.3
In relation to Mole Valley specifically, to avoid any stochastic shocks through setting much
higher CIL charging rates on the market than the historical payments for infrastructure through
S106s on residential development, we have set a ceiling that is no more than historical
average S106s or about 5% of the average GDV used in the appraisals, whichever is the
highest. This is to avoid stymying residential development in Mole Valley, at least in the short
term until the market appropriately adjusts to these new required payment levels.
6.5.4
The judgement in setting a CIL rate also needs to take into account that development in Mole
Valley has been limited in recent years, falling short of the 188 dwellings per annum, as
discussed in Section 3.2. Whilst values in some areas do suggest a higher charge is viable,
we would caution setting it too high because of the risk of delivery in the Plan, which also is
becoming out of date and will likely to be subject to changes very soon. Also it is apparent
through our discussions that a large proportion of development is likely to be built by smaller
local builders without the cost saving benefits that a large volume house builder has.
Therefore, again, a cautious approach is recommended to limit impact on deliverability.
6.5.5
We therefore recommend that the CIL charges are not set at the limit, and that a large buffer is
included. Using the above as a guide, the recommended CIL rates are listed in Table 6.4.
These are based on complying with the Core Strategy policy on affordable housing, allowing
for a buffer of up to 50% of the maximum headroom shown in Table 6.3 but keeping it within a
maximum of around 5% of average GDV, plus a degree of rounding off. Where these rates
would apply is also shown in Figure 6.1 overleaf.
Table 6.4 Mole Valley proposed residential CIL charging rates
Charging zone
Charging area
Levy (£ per sqm)
Zone 1
Built up urban areas (BUAs covering Dorking,
Leatherhead, Bookham, Fetcham and Ashtead)
£175
Zone 2
Rural areas (all areas outside the BUAs)
£250
6.5.6
Our testing of retirement properties and extra-care units suggested a headroom of £446 and
£448 respectively. It is therefore considered that these types of units could comfortably
accommodate a rate of either £175 or £250 per square metre. PBA recommends that
retirement and extra care schemes are not treated any differently than standard residential
units, and should be liable to pay CIL according to the respective location in which it is
developed.
6.5.7
It should be noted that whilst these are recommendations are an interpretation of the viability
results and our experience of undertaking such work, the Council may take an alternative
approach. The Council is not bounded by the results and are only required to be informed by
the evidence and can choose an alternative interpretation of the information.
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Figure 6.1 Proposed residential charging zone boundaries
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7
Non-residential typologies and assumptions
7.1
Establishing the typologies
7.1.1
Like for residential development, high level viability testing has been undertaken on nonresidential activities that are likely to come forward within Mole Valley district. The testing
uses hypothetical schemes to represent the type of new space most likely to come forward.
This has been informed by planning evidence about future space requirements, market
analysis and discussions with the Council about what types of developments they see would
be likely to be brought forward during the life of the Core Strategy.
7.1.2
The selected typologies are presented in Table 7.1.
Table 7.1: Selected non-residential typologies
Use
Description
Size
(GIA)
Size
(NIA)
1: Town centre
office
These are offices located within the town centre boundaries. They
are assumed to be developments over three to four floors.
1,500 1,350
2: Business park
These are larger developments, more likely to be located out of
town, or at edge of town locations. These have a greater footprint
than town centre offices, spread one or two floors. There is likely to
be greater provision for car parking and open space around the unit.
2,250 2,025
3: Industrial /
warehouse
We have combined general industrial typologies to cover smaller
workshops and small warehousing spaces typically found in Mole
Valley district.
1,500 1,425
4: Small local
convenience
This would be a typical small convenience retailer in the style of
‘Sainsbury Local’ type stores, which have become increasing
popular.
5: Small
supermarket
280
266
A changing retail sector has seen a preference for smaller
supermarkets being developed which, in terms of size, are
positioned between typical large supermarket and the smaller sized
convenience stores. These reflect the increasing popularity for LIDL
and ALDI type stores.
1,000
950
For this study we have assumed a size of 2,500, selling
predominantly convenience retail, located in an out of centre
location. Aside from this site we assume a large proportion2 of the
site would be attributed to parking.
2,500 2,375
7: Retail
warehouse
These are normally comparison retailers usually located on out of
town retail parks in small clusters of similar units.
2,000 1,900
8: Town centre
retail
Seen as smaller, comparison retailers located in the town centre
boundary.
9: Hotel (60 bed)
We have tested hotels based on assumptions of a national operating
60 bed budget hotelier.
1,500 1,425
10: Care home
In this section we have tested a large care home with considerable
contribution for communal floorspace and car parking.
2,000 1,400
6: Supermarket
200
190
7.2
Value assumptions
7.2.1
It is not always possible to gain a perfect fit between a site, the site profile and cost/revenue
categories but we have attempted a best fit in the spirit of the Harman Report. For this, the
viability testing requires a series of assumptions about the site coverage and floorspace to
generate an overall sales turnover and value of land.
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Site coverage
7.2.2
It is important to consider the density of development proposed since it is floorspace which
sells. Table 7.2 sets out the assumed site coverage ratios for each development type.
Table 7.2 Non-residential uses – site coverage ratios
Use
Town centre office
Plot ratio
150%
Business park
80%
Industrial / warehouse
40%
Small local convenience
90%
Small supermarket
60%
Supermarket
40%
Retail warehouse
40%
Town centre retail
100%
Hotel (60 bed)
50%
Care home
80%
Establishing gross development value (GDV)
7.2.3
In establishing the GDV for non-residential uses, the GDV is based on a capitalised value of
rent and yields sourced from marketing brochures and conversations with local agents.
However, given the significant variety in development types, this report has also considered
historic comparable evidence for new values on a local, regional and national level.
7.2.4
Table 7.3 identifies the expected values for a variety of newly built non-residential uses,
expressed in square metres (sqm) of net rentable and all in yield.
Table 7.3 Non-residential uses – typical rents and yields
Use
Rent
Yield
Town centre office
£190
7.00%
Business park
£230
7.00%
£85
8.20%
Small local convenience
£210
6.00%
Small supermarket
£200
5.50%
Supermarket
£220
5.00%
Retail warehouse
£180
5.75%
Town centre retail
£200
8.00%
Hotel (60 bed)
£200
6.00%
Care home
£185
7.00%
Industrial / warehouse
Source: PBA research
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7.3
Build costs
7.3.1
Build cost inputs have been established from the RICS Build Cost Information Service (BCIS)
tender prices over 15 years and rebased to current cost values (q2 2014) and Mole Valley
prices. The build costs median values, and include an allowance of 10% of build costs for
external works such as car parking and landscaping.
Table 7.4 Non-residential uses – build costs at Q2 2014
Use
Build cost per sqm
Town centre office
£1,562
Business park
£1,479
Industrial / warehouse
£747
Small local convenience
£1,241
Small supermarket
£1,326
Supermarket
£1,509
Retail warehouse
£731
Town centre retail
£1,215
Hotel (60 bed)
£1,798
Care home
£1,483
Sources: BCIS
7.4
Other development costs
Professional fees, overheads
7.4.1
This input incorporates all professional fees associated with the build, including: architect fees,
planner fees, surveyor fees, project manager fees. The professional fees variable is set at a
rate of 10% of build cost for non-residential units.
7.4.2
This figure has been established from discussions with regional and national developers plus
in house knowledge and experience of industry standards.
Development contributions other than CIL
7.4.3
Unlike the approach in residential testing, no allowance has been included for s106 payments.
This is because of the lack of data to identify what might be an acceptable allowance; and
commercial developments will tend to vary in their assessed impacts more than houses will,
so identifying a fairly accurate S106 for testing viability is more difficult to do.
7.4.4
Clearly this means that the headroom results will generate a higher value than what should be
considered appropriate, and this should therefore be factored into Mole Valley’s consideration
of a buffer to enable some room for seeking site specific mitigations through s106
contributions, should they be required.
Sales costs
7.4.5
This variable is based on the average cost of legals and marketing for development,
incorporating agent fees, 'on site' sales costs and general marketing/advertising costs. The
rate of 3.5% of GDV is applied to the viability test based on discussions with developers and
agents.
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Professional fees on land purchase
7.4.6
This input represents the fees associated with the lands purchase and are based upon the
following industry standards: Surveyor – 1%; Legals – 0.75% of residual land value.
7.4.7
A Stamp Duty Land Tax is payable by a developer when acquiring development land. This
factor has been applied at the standard variable rates set out by HMRC (0 – 4%) against the
(residual) land value.
Finance
7.4.8
A finance rate has been incorporated into the viability testing to reflect the value of money and
the cost of reasonable developer borrowing for the delivery of development. This is applied to
the viability test as a percentage of the build cost at the rate of 7% of total development costs
(incl; build costs, external works, professional fees, sales and marketing).
Developer profit
7.4.9
The developer’s profit is the expected and reasonable level of return a private developer can
expect to achieve from a development scheme. This figure is based on a 20% profit margin,
including central overheads, of the total development cost.
7.5
Land for non-residential uses
7.5.1
After systematically removing the various costs and variables detailed above, the result is the
residual land value. To ascertain the likelihood of delivery and the associated risk with
development viability, the residual land value outputs from the viability model are measured
against a minimum threshold land value at which a landowner would reasonably be expected
to sell or release their land for development under the context of current policy requirements
and general market conditions.
7.5.2
Establishing the existing use value (EUV) of land and in setting a benchmark at which a
landowner is prepared to sell can be a complex process. There are a wide range of site
specific variables which effect land sales (e.g. position of the landowner – are they requiring a
quick sale or is it a long term land investment). However, for a strategic study, where the land
values on future individual sites are unknown, a pragmatic approach is required. Table 7.5
establishes these benchmarks, which have been informed by market analysis and discussions
with local agents.
Table 7.5 Non-residential land values used in testing viability
Use
Land Values
Town centre office
£3,000,000
Business park
£3,000,000
Industrial / warehouse
£1,500,000
Small local convenience
£4,500,000
Small supermarket
£4,500,000
Supermarket
£4,500,000
Retail warehouse
£4,000,000
Town centre retail
£5,000,000
Hotel (60 bed)
£3,000,000
Care home
£3,500,000
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7.6
Non-residential development viability analysis
7.6.1
This section sets out the assessment of non-residential development viability and also
summarises the impact on viability of changes in values and costs, and how this might have
an impact on the level of developer contribution. The tables below summarise the detailed
assessments, and represent the residual value per square metres after values and costs,
including land have been calculated.
7.6.2
It is important to note that the analysis considers development that might be built for
subsequent sale or rent to a commercial tenant. However, in reality there will also be
development that is undertaken for specific commercial operators either as owners or pre-lets
which will be based on the profitability of the occupier's core business activities rather than the
market values of the development that are likely to come forward even when a scheme may
be considered unviable by in general market terms.
7.7
Business uses
7.7.1
Our analysis suggests that viability for commercial business development is mixed. Town
centre offices do not appear to be particularly viable, and in line with the wider national picture,
industrial or warehouse uses are unviable too. As the economy recovers this situation may
improve but for the purposes of setting a CIL we need to consider the current market.
7.7.2
The improving economic market and the proximity to the M25 and London has meant that the
market space with Grade A space in business parks is relatively successful compared with
other locations nationwide. Consequently, for business parks, the testing suggests that there
may be some scope to levy a CIL charge, but the margin is not significant particularly after
taking account of a need for a large margin in the headroom to allow for market fluctuations
which tends to be more frequent and significant for office developments outside of main
employment areas like central London.
Table 7.6 Headrooms within business uses
Use
Residual value per sqm (inc.
allowance for EUV + uplift)
Town Centre office Business Park
-£233
Industrial/warehouse
£85
-£528
7.8
Retail uses
7.8.1
A range of retail scenarios have been tested. These focussed on either town centre
development or out of centre developments which have been identified as supermarkets,
small supermarkets, convenience stores, retail warehouses and town centre comparison retail
stores. It was considered that these represent the most likely scenarios to come forward over
the plan period and also allowed the testing of the type of development envisaged in the Plan.
7.8.2
Owing to limited data on values for each of the towns and their surrounding areas, viability has
been tested as a combined average value across the main centres and their surrounding
catchments.
Convenience retail: Supermarkets, small supermarkets and local convenience
7.8.3
Convenience retail continues to be one of the best performing sectors in the UK, although we
are aware that even this sector is currently experiencing reduced profits. Leases to the main
supermarket operators (often with fixed uplifts) command a premium with investment
institutions. Although there are some small regional variations on yields, they remain generally
strong with investors focussing primarily on the strength of the operator covenant and security
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of income. We would therefore suggest the evidence base for large out of town retail can be
approached on a wider region, or even national, basis when justifying CIL charging.
7.8.4
Our testing suggests that in Mole Valley there is scope for a significant CIL charge on
convenience store development without affecting viability of these schemes to come forward in
Mole valley district.
Table 7.7 Headrooms within convenience retail uses
Use
Residual value per sqm (inc. allowance for
EUV + uplift)
Supermarket
Small
Supermarket
Small local
convenience
£191
£268
£528
Comparison retail: Retail warehouses and town centre
7.8.5
For retail warehouse, although this market has been relatively flat in recent times, especially in
terms of new build, there may potentially be more activity in the future. Whilst values have
dropped the relatively low build costs mean that there is still value in these types of
developments when there is occupier demand.
7.8.6
In terms of town centre retail, our test suggests there is no scope to charge a CIL rate.
Viability in prime retail areas may be slightly higher, however it is considered that on the whole
this area is of development is not sufficiently viable.
Table 7.8 Headrooms within comparison retail uses
Use
Residual value per sqm (inc. allowance for
EUV + uplift)
Retail warehouse
Town Centre retail
£357
-£153
Summary of retail assessment
7.8.7
Although the potential headroom varies considerably between uses within Mole Valley, the
viability testing suggests fairly strong viability among all retail uses with the exception of town
centre shops selling comparison goods.
7.8.8
In terms of what constitutes a 'centre', Policy CS1 and CS2 in the Mole Valley Core Strategy
(Adopted 2009), Policy DT2 of the ‘Dorking Town Area Action Plan (adopted December 2012)
and Policy E7 ‘Business development in Dorking and Leatherhead town centres’ set out
defined centres on the proposals map, which could feasibly be used to differentiate between
these uses. This area is shown in Figure 7.1 overleaf.
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Figure 7.1 Proposed Town Centre charging zone boundaries
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7.9
Hotel development
7.9.1
The rapid expansion in the sector at the end of the last decade was in part fuelled by a
preference for management contracts or franchise operations over traditional lease contracts.
Outside London (which has shown remarkable resilience to the recession) hotel development
is being strongly driven by the budget operators delivering new projects through traditional
leasehold arrangements with institutional investors.
7.9.2
The viability testing on a budget hotel in Mole Valley district, as can be seen in Table 5.7,
does not realise sufficient residual value to warrant a positive levy charge.
Table 7.9 Headroom within Hotels
Use
Residual value per sqm (inc. allowance for EUV + uplift)
7.10
Hotels
-£350
Care homes
7.10.1 We have tested the viability of the care sector and based on current values and costs, there
does not appear to be sufficient headroom to charge a levy for this type of development.
Table 7.10 Headrooms within care homes
Use
Residual value per sqm (inc. allowance for EUV + uplift)
Care homes
-£821
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8
Recommendations
8.1
Viability findings
Residential schemes
8.1.1
The relatively high values of new residential units in Mole Valley district mean that viability of
development is not a major concern. This is backed up by the rate of past delivery of housing,
which, despite the recent recession, has kept pace with the target set by the Core Strategy.
8.1.2
The Core Strategy and recent completions reported in the Annual Monitoring Reports
indicates that the housing supply is dependent on the delivery of a mix of small to large
brownfield and small greenfield sites, with the vast majority being delivered within the five built
up urban areas (BUAs) of Leatherhead, Dorking (including North Holmwood), Ashtead,
Bookham and Fetcham. The high level viability testing of different scheme typologies within
these BUAs found that there would be sufficient financial headroom against which a CIL
charge could be applied without affecting the bulk of development activity that would be
required to support the delivery of the Core Strategy.
8.1.3
An important study finding is that the BUAs within Mole Valley district achieve very similar
gross development values for residential units but these are lower values than the average
within the rest of the district. The latter is largely rural and although such locations are unlikely
to account for large number of new developments under the current Core Strategy, there is
significant enough value within these schemes to warrant charging separately from the BUAs.
Therefore, based on the evidence, there are effectively two value zones that may require
separation in order to maximise the value of CIL without undermining the delivery of the Core
Strategy. These are: the BUAs and the rest of the district (i.e. the rural area).
Non-residential scheme
8.1.4
A range of non-residential scheme typologies were tested to identify the potential to pay a CIL
charge. The tested typologies reflect what the Core Strategy and market is mostly seeking to
facilitate and/or provide to space for. This includes business space uses (i.e. town centres
offices, business parks and light industrial/warehousing units), retail units (i.e. small local
convenience, small supermarkets, supermarkets, retail warehouses and town centre retail),
hotels and care homes.
8.1.5
The high level viability assessment found that in the current market, only business park units
and retail units (excluding town centre comparison retail) would have sufficient headroom to
support a CIL levy. However, the headroom for business park space was only marginal and
because this use was relatively insignificant in the realm of all new developments likely to
come forward, it would be sensible to not set a charge on this type of development.
8.2
Study recommendations
8.2.1
The following CIL charging rates, in Table 8.1, are recommended for a draft CIL charging
schedule. As recommended by guidance, these rates reflect viability at the present time. If
viability improves, a new CIL Charge could be set.
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Table 8.1 Recommended CIL charges for Mole Valley district
Development Type
Residential development within the five BUAs*
(Leatherhead, Dorking, Bookham, Fetcham and
Ashtead).
CIL Charge per sqm
£175
*This includes housing for older people.
Residential development outside the five BUAs
Town centre office
Business park
Industrial / warehouse
£250
£0
£0 (but potentially up to £40 could be set)
£0
Convenience retail
£140
Comparison retail outside of the town centre
boundary
£140
Comparison retail inside the town centre boundary
£0
Hotel
£0
Care home
£0
Other (standard charge) uses
£0
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Appendix A
Assumption
Scenarios
Source
Notes
Ref
Typology
1
1 Unit BUA
2
4 Units BUA
9 Units BUA
3
4
14 Units BUA
5
24 Units BUA
6
30 Units BUA
7
40 Units BUA
8
90 Units BUA
9
1 Unit Rural
10 4 Units Rural
11 9 Units Rural
12 14 Units Rural
19 40 Units BUA (flatted)
20 24 Units Rural
34 Extra care
35 Retirement home
Averages
Taken
Residential
development
typology
Mix type
Unit sizes
ID
Assumptions Summary
Industry
standard
Settlement
BUA
BUA
BUA
BUA
BUA
BUA
BUA
BUA
Rural
Rural
Rural
Rural
BUA
Rural
Extra care
Retirement home
Retirement Home
Extra Care
Care Home
Council policy
(ha) Net area (ha)
0.05
0.05
0.18
0.16
0.45
0.38
0.60
0.49
0.89
0.69
1.13
0.86
1.55
1.15
3.65
2.55
0.05
0.05
0.20
0.18
0.48
0.40
0.60
0.49
0.45
0.34
0.89
0.69
0.62
0.46
0.62
0.45
58%
Nr units
1
4
9
14
24
30
40
90
1
4
9
14
40
24
45
55
dwph B-space (sqm)
20
25
24
29
35
35
35
35
20
22
22
29
119
35
98
122
40
OM dwelling type (%)
AH dwelling type (%)
1-2 bed Flats
2 bed house
3 bed house
4+ bed house
1-2 bed Flats 2 bed house 3 bed house 4+ bed house
Ref Typology
10%
37.5%
37.5%
15%
17.5%
37.5%
37.5%
7.5%
1
1 Unit BUA
0.0%
0.0%
0.0%
100%
0.0%
0.0%
0.0%
100.0%
2
4 Units BUA
0.0%
33.3%
33.3%
33.3%
0.0%
33.3%
33.3%
33.3%
3
9 Units BUA
0.0%
33.3%
33.3%
33.3%
0.0%
33.3%
33.3%
33.3%
4
14 Units BUA
0.0%
33.3%
33.3%
33.3%
0.0%
33.3%
33.3%
33.3%
5
24 Units BUA
25.0%
17.0%
38.0%
20%
25.0%
17.0%
38.0%
20.0%
6
30 Units BUA
20.0%
13.0%
47.0%
20%
20.0%
13.0%
47.0%
20.0%
7
40 Units BUA
15.0%
25.0%
40.0%
20%
15.0%
25.0%
40.0%
20.0%
8
90 Units BUA
15.0%
25.0%
40.0%
20%
15.0%
25.0%
40.0%
20.0%
9
1 Unit Rural
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
100.0%
10 4 Units Rural
0.0%
33.3%
33.3%
33.3%
0.0%
33.3%
33.3%
33.3%
11 9 Units Rural
0.0%
33.3%
33.3%
33.3%
0.0%
33.3%
33.3%
33.3%
12 14 Units Rural
0.0%
33.3%
33.3%
33.3%
0.0%
33.3%
33.3%
33.3%
19 40 Units BUA (flatted)
100.0%
0.0%
0.0%
0%
100.0%
0.0%
0.0%
0.0%
20 24 Units Rural
25.0%
17.0%
38.0%
20.0%
25.0%
17.0%
38.0%
20.0%
34 Extra care
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
35 Retirement home
100.0%
0.0%
0.0%
0.0%
100.0%
0.0%
0.0%
0.0%
Residential floorspace is based on Govt Housing Standards review consultation lvl2 August 2013 and/or industry standards of new build schemes. Two floor areas are displayed for flatted schemes: The Gross
Internal Area (GIA) is used to calculate build costs and Net Internal Area (NIA) is applied to calculate the sales revenue. For the small housing sites (up to 5 units) larger dwellings are delivered in the borough,
Private
Private sale
Flats (NIA)
60 sq m
Private sale
Flats (GIA)
65 sq m
Private sale
2 bed house
74 sq.m
Private sale
3 bed house
114 sq.m
Private sale
4+ bed house
167 sq m
Affordable units
Social rent
Flats (NIA)
60 sq m
Social rent
Flats (GIA)
65 sq m
Social rent
2 bed house
74 sq.m
Social rent
3 bed house
95 sq m
Social rent
4+ bed house
114 sq m
Affordable rent
Flats (NIA)
60 sq m
Affordable rent
Flats (GIA)
65 sq m
Affordable rent
2 bed house
74 sq m
Affordable rent
3 bed house
95 sq m
Affordable rent
4+ bed house
114 sq m
Intermediate
Flats (NIA)
60 sq m
Intermediate
Flats (GIA)
65 sq m
Intermediate
2 bed house
74 sq m
Intermediate
3 bed house
95 sq m
Intermediate
4+ bed house
114 sq m
Retirement schemes
Residential
scenarios
Land type (Greenfield/Brownfield/Mixed)
LV description
Gross area
Brownfield
Small Brownfield
Brownfield
Small Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Brownfield
Greenfield
Greenfield
Greenfield
Small Greenfield
Greenfield
Small Greenfield
Greenfield
Greenfield
Greenfield
Greenfield
Brownfield
Brownfield
Greenfield
Greenfield
Brownfield
Retirement Scheme
Brownfield
Retirement Scheme
NIA
60
71
38
GIA
75
96
51
1bed
2bed
60%
60%
40%
40%
1.25
1.35
The Council targets an affordable housing rate of 35% on schemes of 5 dwellings or more. The policy also states an overall balance of 60% social rent, 20% affordable rent and 20% for intermediate affordable
tenures.
Threshold
10 Units
Type
Affordable tenure split
Private
Affordable
Social rent
Affordable rent Intermediate
Ref Typology
100%
0%
50%
25%
25%
1 1 Unit BUA
1 Units
100%
0%
50%
25%
25%
2 4 Units BUA
4 Units
100%
0%
50%
25%
25%
3 9 Units BUA
9 Units
100%
0%
50%
25%
25%
4 14 Units BUA
14 Units
70%
30%
50%
25%
25%
5 24 Units BUA
24 Units
60%
40%
50%
25%
25%
6 30 Units BUA
30 Units
60%
40%
50%
25%
25%
7 40 Units BUA
40 Units
60%
40%
50%
25%
25%
8 90 Units BUA
90 Units
60%
40%
50%
25%
25%
9 1 Unit Rural
1 Units
100%
0%
50%
25%
25%
10 4 Units Rural
4 Units
100%
0%
50%
25%
25%
11 9 Units Rural
9 Units
100%
0%
50%
25%
25%
12 14 Units Rural
14 Units
70%
30%
50%
25%
25%
19 40 Units BUA (flatted)
40 Units
60%
40%
50%
25%
25%
20 24 Units Rural
24 Units
60%
40%
50%
25%
25%
34 Extra care
45 Units
60%
40%
50%
25%
25%
35 Retirement home
55 Units
60%
40%
50%
25%
25%
Economic Viability Assessment
Mole Valley District Council CIL
Assumption
Source
Notes
Revenue
Property values are derived from different sources, depending on land use.
For housing, Land Registry and Rightmove data forms a basis for analysis. This provides a full record of all individual transactions. Values used are as
follows:
Sales value of
completed scheme
Land
Registry/Rightm
ove Brochures
Private sale
Value Area
Rural
House
£4,740
Flats
£3,700 sqm
Private sale
BUA
£4,300
£3,600 sqm
Private sale
Extra care
£0
£5,400 sqm
Private sale
Retirement home
£0
£4,950 sqm
The current percentage requirement for affordable housing is X% on sites with X+ new dwellings. The impact of residential tenure can affect the impact of
this policy, and we have assumed a blended average of intermediate and affordable rented accommodation as follows:
Transfer value
Value Area
45%
Social rent
Rural
£2,133
£1,665 sqm
Social rent
BUA
£1,935
£1,620 sqm
Social rent
Extra care
£0
£2,430 sqm
Affordable housing
(Section 106)
Industry
standards
Social rent
Retirement home
Transfer value
Affordable rent
Affordable rent
Rural
BUA
Affordable rent
Affordable rent
Extra care
Retirement home
Transfer value
Intermediate
Intermediate
Rural
BUA
Intermediate
Intermediate
Extra care
Retirement home
£0
£2,228 sqm
55%
£2,607
£2,365
£2,035 sqm
£1,980 sqm
£0
£0
£2,970 sqm
£2,723 sqm
65%
£3,081
£2,795
£2,405 sqm
£2,340 sqm
£0
£0
£3,510 sqm
£3,218 sqm
Construction Costs
Residential build costs are based on recent data of actual tender prices from the Build Cost Information Service (BCIS), which is published by the Royal
Institution of Chartered Surveyors (RICS). The tender prices are based on new builds in the market place over a 15 year period, rebased to the district
and 2 quarter 2014 prices using BCIS defined adjustments, to give the following median build costs for small and large schemes:
Small housebuilder
Build costs
BCIS Quarterly
Review of
Building Prices
online version
accessed
August 2014.
Prices rebased
to the district.
<
4
Medium housebuilder
Large house builder
15
dwgs
Private
Flats
Houses (general estate)
£1,312
£1,375
£1,312
£1,271
£1,312 sqm
£1,167 sqm
Affordable
Flats
Houses (general estate)
£1,312
£1,375
£1,312
£1,271
£1,312 sqm
£1,167 sqm
Retirement Schemes
Extra care
Retirement home
£1,402
£1,353
DVS work for CGT found: It is not strictly correct that the submissions are drawn from RPs, there are quite a few that are Private dwellings. However from
Plot external
Industry
standards
Plot externals relate to costs for internal access roads, hard and soft landscaping. This will vary from site to site, but we have allowed for this at the
following rate:
10% extra-over on build cost
Economic Viability Assessment
Mole Valley District Council CIL
Developing greenfield, brownfield and mixed sites represent different risk and costs. These costs can vary significantly depending on the site's specific
characteristics. To reflect additional costs associated with site development for residential purposes (i.e. demolition and opening costs), allowance for
Land Type have been set at:
Site abnormals
Land type
Industry
standards
Brownfield
Mixed
Greenfield
£200,000 per net ha
£100,000 per net ha
£0 per net ha
Opening up costs typically account for strategic infrastructure and S106 costs - local highway improvements, drainage, strategic landscaping, PoS,
education/ community facilities, etc. This is treated as an add on to the adopted benchmark land value so that the benchmark land value is sufficiently
Opening-up costs
Professional fees
Contingency
Sale costs
Infrastructure
study
Generic sites
Industry
standards
Industry
standards
£5,000 per unit
200
£10,000 per unit
<
500
>=
500
£20,000 per unit
Professional fees relate to the costs incurred to bring the development forward and cover items such as; surveys, architects, quantity surveyors, etc. The
10%foron
build
costs"when
(incl: looking
externals)
5% could normally be allowed, but the DVS in their work
CGT
found:
at the monetary value of the 5% allowance on the schemes, this
is quite a significant amount, and therefore I consider that 3% is more justifiable, and I have known on similar large schemes to be as low as 1.5%. "
5% on build costs (incl: externals)
Industry
standards
Sale costs relate to the costs incurred for disposing the completed residential units, including legal, agents and marketing fees. These are based on
industry accepted scales at the following rates:
<
3% on OM GDV
Finance costs
Industry
standards
Professional fees on
land purchase
Industry
standards
When testing for development viability it is common practice to assume development is 100% debt financed (Viability Testing Local Plans - Advice for
planning practitioners and RICS Financial viability in planning guidance note GN94/2012. Within our cashflow we used a finance rate based upon market
rates of interest as follows:
6% on net costs
In addition to SDLT the purchaser of land will incur professional fees relating to the purchase. Fees associated with the land purchase are based upon
the following industry standards:
Surveyor 1.00% on land costs
Legals 0.75%
Profit
A developer’s return is based upon their attitude to risk. A developer’s attitude to risk will depend on many factors that include but not exclusive to,
development type (e.g. Greenfield, Brownfield, refurbishment, new build etc), development proposal (uses, mix and quantum), credit worthiness of
developer, and current market conditions.
Developer's return
Industry
standards
The Harmen Report states that "residential developer margin expressed as a percentage of GDV - should be the default methodology" and E.2.3.8.1 of
the RICS Financial viability in planning report states "The residential sector seeks a return on the GDV".
We have applied a rate that is acceptable to both developers and financial institutions in the current market. The developer return is a Gross Margin and
therefore includes overheads. The developer return is calculated as a percentage of Gross Development Value at the following rate:
Developer return on market housing
Return on affordable housing
20.0% on OM GDV
6% on AH transfer values
A lower margin has been applied to the affordable units as these represent less development risk as the end user is known at point of construction. This
Time-scales
Benchmark land value per ha
It is important to appreciate that assumptions on benchmark land values can only be broad approximations, subject to a wide margin of uncertainty. We
take account of this uncertainty in drawing conclusions and recommendations from our analysis. We have examined a cross section of residential land
comparables across the district. These comparable recent transactions generally relate to urban, brownfield sites, which were fully serviced with roads
and major utilities to the site boundary. In collecting evidence on residential land values, we aimed to distinguish between sites that deliver flats and
housing sites - this is due to development densities, and sites values that might reflect extra costs for opening up and planning permission from those
which are clean residential sites. The figure we use reflect a fairly clean residential site (although it may not yet be permitted)
Residential land values
Land Registry &
UK Land
We would expect that land values for smaller sites with less than 10 dwellings to be higher because of being under the affordable housing threshold. This
Directory
approach is in line with the Harman report which advises authorities to work on the basis of future policy and its effects on land values.
website
Residential
Residential
Residential
Residential
Residential
Residential
Residential
values
values
values
values
values
values
values
Small Brownfield
Small Greenfield
Greenfield
Brownfield
South East
Strategic site
Retirement Scheme
£3,500,000
£3,500,000
£3,000,000
£2,500,000
£2,250,000
£2,000,000
£3,500,000
per
per
per
per
per
per
per
net
net
net
net
net
net
net
ha
ha
ha
ha
ha
ha
ha
Economic Viability Assessment
Mole Valley District Council CIL
Non Residential
Assumption
Source
Notes
Costs
Through the course of the development plan period the Council envisages commercial development to occur. We have
reflected future commercial development through testing the following commercial uses and unit sizes:
1: Town centre office
2: Business park
3: Industrial / warehouse
4: Small supermarket
5: Supermarket
6: Retail warehouse
7: Town centre retail
8: Hotel (60 bed)
9: Small local convenience
10: Carehome
GIA sq.m
1,500
2,250
1,500
1,000
2,500
2,000
200
1,500
280
2,000
NIA sq.m
1,350
2,025
1,425
950
2,375
1,900
190
1,425
266
1,400
We have assumed the following net to gross site development percentages to allow for roads, SuDs, landscape and open
space:
Net site area (ha)
Net to gross site
developable area
PBA &
developer
workshop
1: Town centre office
0.100
2: Business park
0.281
3: Industrial / warehouse
0.375
4: Small supermarket
0.167
5: Supermarket
0.625
6: Retail warehouse
0.500
7: Town centre retail
0.020
8: Hotel (60 bed)
0.300
9: Small local convenience
0.031
10: Carehome
0.250
Build costs are based on median rates adjusted for location derived from BCIS Review of Building Prices online version
data of actual prices in the marketplace. All major non-domestic development which does not qualify for assessment
under Code for Sustainable Homes will be encouraged to be built to a minimum BREEAM (Building Research
Establishment Assessment Method) Very Good standard.
This excludes any allowance for externals which is treated separately.
BCIS Quarterly
Review of
Building Prices
Issue (January
2014)
Plot external
Industry
standards
£/Sqm
1: Town centre office
2: Business park
3: Industrial / warehouse
4: Small supermarket
5: Supermarket
6: Retail warehouse
7: Town centre retail
8: Hotel (60 bed)
9: Small local convenience
10: Carehome
£1,562
£1,479
£747
£1,326
£1,509
£731
£1,215
£1,798
£1,241
£1,483
These covers external build costs for site preparation and includes items such as internal access roads, car parking,
landscaping, drainage, utilities and services within the site. We have allowed the following percentage of build costs for
these items.
10%
These exclude abnormal site development costs and exceptional offsite infrastructure.
Economic Viability Assessment
Mole Valley District Council CIL
Industry
Professional Fees standards
Professional fees are based upon accepted industry standards and has been calculated as a percentage of build costs at
10%
Contingency
Industry
standard &
developer
workshop
Sale costs
Industry
standards
Finance costs
Industry
standards
Stamp Duty on
Land Purchase
HMRC
Professional fees Industry
on Land Purchase standards
Profit
Industry
standards
Contingency is based upon the risk associated with each site and has been calculated as a percentage of construction
costs at
5%
These rates are based on industry accepted scales at the following rates:
Legals, surveyors, marketing etc
3.5%
Gross development value
Based upon the likely cost of development finance we have used current market rates of interest.
7.0%
These are the current rates set by Treasury at the following rates:
up to £150,000
Over £150,000 to £250,000
Over £250,000 to £500,000
Over £500,000
0.00%
1.00%
3.00%
4.00%
Fees associated with the land purchase are based upon the following industry standards:
Surveyor 1.00%
0.75%
Legals Gross development profit (includes overheads) taken as a percentage of total development costs
20%
Build rate time-scales reflect solely the construction period of the commercial unit itself and assumes a cleared service
site free of abnormals. The build rates for each of the commercial uses are set out as follows:
Time-scales - build
rate units/per
annum
Consultations
1: Town centre office
2: Business park
3: Industrial / warehouse
4: Small supermarket
5: Supermarket
6: Retail warehouse
7: Town centre retail
8: Hotel (60 bed)
9: Small local convenience
10: Carehome
01
01
01
01
01
01
01
01
01
01
Start
September 2016
September 2016
September 2016
September 2016
September 2016
September 2016
September 2016
September 2016
September 2016
September 2016
Finish
Length in months
01/08/2017
12
01/05/2017
9
01/05/2017
9
01/05/2017
9
01/08/2017
12
01/05/2017
9
01/05/2017
9
01/05/2017
9
01/05/2017
9
01/05/2017
9
Revenue
We have assumed that the completed commercial unit is sold on practical completion as an investment sale. The income
on the investment sale will be deferred depending on the length of rent free period required to attract a tenant. The rent
free period is therefore the tenants incentive. Rents, yield and rent free periods are based upon market evidence and are
set out as follows:
Rent
Yield
Rent free (months)
1: Town centre office
£190
7.00%
3.00
2: Business park
£230
7.00%
3.00
Capital values
CoStar/Focus & 3: Industrial / warehouse
£85
8.20%
3.00
(rents, yields, and
consultations 4: Small supermarket
£200
5.50%
3.00
tenant incentives)
5: Supermarket
£220
5.00%
3.00
6: Retail warehouse
£180
5.75%
3.00
7: Town centre retail
£200
8.00%
3.00
8: Hotel (60 bed)
£200
6.00%
3.00
9: Small local convenience
£210
6.00%
3.00
10: Carehome
£185
7.00%
3.00
Benchmark land value per ha
Our estimates of benchmark land values are based on market comparables derived through consultation with
stakeholders and analysis of published data on CoStar. At this current point in the economic cycle there is much
uncertainty surrounding land values due to the small number of transactions occurring.
1: Town centre office
£3,000,000
2: Business park
£3,000,000
3: Industrial / warehouse
£1,500,000
CoStar/Focus & 4: Small supermarket
£4,500,000
consultations 5: Supermarket
£4,500,000
6: Retail warehouse
£4,000,000
7: Town centre retail
£5,000,000
8: Hotel (60 bed)
£3,000,000
9: Small local convenience
£4,500,000
10: Carehome
£3,500,000
Economic Viability Assessment
Mole Valley District Council CIL
Appendix B
Viability Assessments
1 Unit BUA
BUA
1 Units
ITEM
Net area (ha)
Stamp Duty
0.05
New
Private
1.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Small Brownfield
Affordable
0.00
Social rent
0.00
Technical Checks:
Residual Value
£4,295,758
per net ha
Affordable rent
0.00
Intermediate
0.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
3,340
20
1
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
1.00
1.0
Size sq.m
60
74
114
167
Total sq.m
0
0
0
167
167
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£0
£0
£0
£718,100
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£0
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£718,100
20%
on OM GDV
£143,620
6%
on AH transfer values
£0
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
£143,620
3.00%
on OM GDV
£21,543
£21,543
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
1.00
1
Size sq.m
65
74
114
167
Total sq.m
0
0
0
167
167
Cost per sq.m
£1,312
£1,375
£1,375
£1,375
Total Costs
£0
£0
£0
£229,625
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
65
74
95
114
Total sq.m
0
0
0
0
per unit
Cost per sq.m
£1,312
£1,375
£1,375
£1,375
Total Costs
£0
£0
£0
£0
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
1
£229,625
10%
extra-over on build cost
£22,963
£200,000
per net ha
£10,000
£5,000
per unit
£5,000
£37,963
10%
£25,259
£25,259
5%
£12,629
£12,629
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£4,000
£0
-
Total developer contributions
£4,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£331,019
£214,788
£1,796
£0
1.75% on land costs
£3,759
Total site costs
£220,342
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£694,981
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£23,119
APR
6.00%
on net costs
PCM
0.487%
-£23,119
£718,100
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a strategic
level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
4 Units BUA
BUA
4 Units
ITEM
Net area (ha)
Stamp Duty
0.16
Old
Private
4.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Small Brownfield
Affordable
0.00
Technical Checks:
Residual Value
£4,053,123
per net ha
Social rent
Affordable rent
0.00
0.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
0.00
2,938
25
3
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
1.33
1.33
1.33
4.0
Size sq.m
60
74
114
167
Total sq.m
0
99
152
223
473
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£0.00
£424,267
£653,600
£957,467
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£0
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£2,035,333
20%
on OM GDV
£407,067
6%
on AH transfer values
£0
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£407,067
3.00%
on OM GDV
£61,060
£61,060
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
1.33
1.33
1.33
4
Size sq.m
65
74
114
167
Total sq.m
0
99
152
223
473
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£125,422
£193,217
£283,046
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
65
74
95
114
Total sq.m
0
0
0
0
per unit
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£0
£0
£0
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
4
£601,686
10%
extra-over on build cost
£60,169
£200,000
per net ha
£32,221
£5,000
per unit
£20,000
£112,389
10%
£66,185
£66,185
5%
£33,093
£33,093
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£16,000
£0
-
Total developer contributions
£16,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£890,413
£652,976
£0
£26,119
1.75% on land costs
£11,427
Total site costs
£690,523
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£1,988,002
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£47,331
APR
6.00%
on net costs
PCM
0.487%
-£47,331
£2,035,333
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
9 Units BUA
BUA
9 Units
ITEM
Net area (ha)
Stamp Duty
0.38
Old
Private
9.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Brownfield
Affordable
0.00
Technical Checks:
Residual Value
£3,882,775
per net ha
Social rent
Affordable rent
0.00
0.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
0.00
2,821
24
7
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.00
3.00
3.00
9.0
Size sq.m
60
74
114
167
Total sq.m
0
222
342
501
1,065
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£0
£954,600
£1,470,600
£2,154,300
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£0
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£4,579,500
20%
on OM GDV
£915,900
6%
on AH transfer values
£0
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£915,900
3.00%
on OM GDV
£137,385
£137,385
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.00
3.00
3.00
9
Size sq.m
65
74
114
167
Total sq.m
0
222
342
501
1,065
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£282,199
£434,739
£636,854
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
65
74
95
114
Total sq.m
0
0
0
0
per unit
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£0
£0
£0
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
9
£1,353,793
10%
extra-over on build cost
£135,379.25
£200,000
per net ha
£75,492
£5,000
per unit
£45,000
£255,872
10%
£148,917
£148,917
5%
£74,459
£74,459
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£36,000
£0
-
Total developer contributions
£36,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£2,006,425
£1,465,599
£0
£58,624
1.75% on land costs
£25,648
Total site costs
£1,549,871
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£4,472,196
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£107,304
APR
6.00%
on net costs
PCM
0.487%
-£107,304
£4,579,500
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
14 Units BUA
BUA
14 Units
ITEM
Net area (ha)
Stamp Duty
0.49
Old
Private
9.80
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Brownfield
Affordable
4.20
Technical Checks:
Residual Value
£3,556,951
per net ha
Social rent
Affordable rent
2.10
1.05
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
1.05
3,203
29
10
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.27
3.27
3.27
9.8
Size sq.m
60
74
114
167
Total sq.m
0
242
372
546
1,160
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£0
£1,039,453
£1,601,320
£2,345,793
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.70
0.70
0.70
2.1
Size sq.m
60
74
95
114
Total sq.m
0
52
66
80
198
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£0
£100,233
£128,678
£154,413
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.35
0.35
0.35
1.1
Size sq.m
60
74
95
114
Total sq.m
0
26
33
40
99
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£0
£61,253
£78,636
£94,363
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.35
0.35
0.35
1.1
Size sq.m
60
74
95
114
Total sq.m
0
26
33
40
99
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£0
£72,390
£92,934
£111,521
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£5,880,988
20%
on OM GDV
£997,313
6%
on AH transfer values
£53,665
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,050,979
3.00%
on OM GDV
£149,597
£149,597
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.27
3.27
3.27
10
Size sq.m
65
74
114
167
Total sq.m
0
242
372
546
1,160
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£307,283.36
£473,382.47
£693,463.79
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
1.40
1.40
1.40
4
Size sq.m
65
74
95
114
Total sq.m
0
104
133
160
396
per unit
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0.00
£131,692.87
£169,065.17
£202,878.20
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
14
£1,977,766
10%
extra-over on build cost
£197,776.58
£200,000
per net ha
£97,161
£5,000
per unit
£70,000
£364,937
10%
£217,554
£217,554
5%
£108,777
£108,777
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£39,200
£0
-
Total developer contributions
£39,200
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£2,857,832
£1,727,981
£0
£69,119
1.75% on land costs
£30,240
Total site costs
£1,827,340
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£5,736,150
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£144,838
APR
6.00%
on net costs
PCM
0.487%
-£144,838
£5,880,988
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
24 Units BUA
BUA
24 Units
ITEM
Net area (ha)
Stamp Duty
0.69
Old
Private
14.40
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Brownfield
Affordable
9.60
Technical Checks:
Residual Value
£3,407,030
per net ha
Social rent
Affordable rent
4.80
2.40
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
2.40
3,379
35
15
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
2.45
5.47
2.88
14.4
Size sq.m
60
74
114
167
Total sq.m
216
181
624
481
1,502
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£777,600
£778,954
£2,682,374
£2,068,128
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
1.20
0.82
1.82
0.96
4.8
Size sq.m
60
74
95
114
Total sq.m
72
60
173
109
415
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£116,640
£116,843
£335,297
£211,766
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
0.41
0.91
0.48
2.4
Size sq.m
60
74
95
114
Total sq.m
36
30
87
55
208
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£71,280
£71,404
£204,904
£129,413
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
0.41
0.91
0.48
2.4
Size sq.m
60
74
95
114
Total sq.m
36
30
87
55
208
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£84,240
£84,387
£242,159
£152,942
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£8,128,331
20%
on OM GDV
£1,261,411
6%
on AH transfer values
£109,276
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,370,688
3.00%
on OM GDV
£189,212
£189,212
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
2.45
5.47
2.88
14
Size sq.m
65
74
114
167
Total sq.m
234
181
624
481
1,520
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£307,008
£211,464.77
£728,191.87
£561,440.64
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
2.40
1.63
3.65
1.92
10
Size sq.m
65
74
95
114
Total sq.m
156
121
347
219
842
per unit
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£204,672.00
£140,976.51
£404,551.04
£255,505.92
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
24
£2,813,811
10%
extra-over on build cost
£281,381.08
£200,000
per net ha
£138,039
£5,000
per unit
£120,000
£539,420
10%
£309,519
£309,519
5%
£154,760
£154,760
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£57,600
£0
-
Total developer contributions
£57,600
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£4,064,322
£2,351,522
£0
£94,061
1.75% on land costs
£41,152
Total site costs
£2,486,734
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£7,921,744
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£206,587
APR
6.00%
on net costs
PCM
0.487%
-£206,587
£8,128,331
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
30 Units BUA
BUA
30 Units
ITEM
Net area (ha)
Stamp Duty
0.86
Old
Private
18.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Brownfield
Affordable
12.00
Technical Checks:
Residual Value
£3,653,968
per net ha
Social rent
Affordable rent
6.00
3.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
3.00
3,513
35
17
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
2.34
8.46
3.60
18.0
Size sq.m
60
74
114
167
Total sq.m
216
173
964
601
1,955
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£777,600
£744,588
£4,147,092
£2,585,160
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
1.20
0.78
2.82
1.20
6.0
Size sq.m
60
74
95
114
Total sq.m
72
58
268
137
534
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£116,640
£111,688
£518,387
£264,708
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
0.39
1.41
0.60
3.0
Size sq.m
60
74
95
114
Total sq.m
36
29
134
68
267
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£71,280
£68,254
£316,792
£161,766
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
0.39
1.41
0.60
3.0
Size sq.m
60
74
95
114
Total sq.m
36
29
134
68
267
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£84,240
£80,664
£374,390
£191,178
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£10,614,426
20%
on OM GDV
£1,650,888
6%
on AH transfer values
£141,599
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,792,487
3.00%
on OM GDV
£247,633
£247,633
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
2.34
8.46
3.60
18
Size sq.m
65
74
114
167
Total sq.m
234
173
964
601
1,973
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£307,008
£202,135.44
£1,125,822.96
£701,800.80
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
2.40
1.56
5.64
2.40
12
Size sq.m
65
74
95
114
Total sq.m
156
115
536
274
1,081
per unit
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£204,672.00
£134,756.96
£625,457.20
£319,382.40
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
30
£3,621,036
10%
extra-over on build cost
£362,103.58
£200,000
per net ha
£172,163
£5,000
per unit
£150,000
£684,266
10%
£398,314
£398,314
5%
£199,157
£199,157
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£72,000
£0
-
Total developer contributions
£72,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£5,222,406
£3,145,383
£0
£125,815
1.75% on land costs
£55,044
Total site costs
£3,326,242
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£10,341,135
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£273,291
APR
6.00%
on net costs
PCM
0.487%
-£273,291
£10,614,426
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
40 Units BUA
BUA
40 Units
ITEM
Net area (ha)
Stamp Duty
1.15
Old
Private
24.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Brownfield
Affordable
16.00
Technical Checks:
Residual Value
£3,634,202
per net ha
Social rent
Affordable rent
8.00
4.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
4.00
3,439
35
22
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
6.00
9.60
4.80
24.0
Size sq.m
60
74
114
167
Total sq.m
216
444
1,094
802
2,556
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£777,600
£1,909,200
£4,705,920
£3,446,880
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
1.20
2.00
3.20
1.60
8.0
Size sq.m
60
74
95
114
Total sq.m
72
148
304
182
706
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£116,640
£286,380
£588,240
£352,944
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
1.00
1.60
0.80
4.0
Size sq.m
60
74
95
114
Total sq.m
36
74
152
91
353
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£71,280
£175,010
£359,480
£215,688
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
1.00
1.60
0.80
4.0
Size sq.m
60
74
95
114
Total sq.m
36
74
152
91
353
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£84,240
£206,830
£424,840
£254,904
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£13,976,076
20%
on OM GDV
£2,167,920
6%
on AH transfer values
£188,189
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£2,356,109
3.00%
on OM GDV
£325,188
£325,188
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
6.00
9.60
4.80
24
Size sq.m
65
74
114
167
Total sq.m
234
444
1,094
802
2,574
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£307,008
£518,296.00
£1,277,529.60
£935,734.40
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
2.40
4.00
6.40
3.20
16
Size sq.m
65
74
95
114
Total sq.m
156
296
608
365
1,425
per unit
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£204,672.00
£345,530.67
£709,738.67
£425,843.20
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
40
£4,724,353
10%
extra-over on build cost
£472,435.25
£200,000
per net ha
£230,779
£5,000
per unit
£200,000
£903,215
10%
£519,679
£519,679
5%
£259,839
£259,839
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£96,000
£0
-
Total developer contributions
£96,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£6,828,273
£4,193,494
£0
£167,740
1.75% on land costs
£73,386
Total site costs
£4,434,620
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£13,619,001
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£357,075
APR
6.00%
on net costs
PCM
0.487%
-£357,075
£13,976,076
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
90 Units BUA
BUA
90 Units
ITEM
Net area (ha)
Stamp Duty
2.55
Old
Private
54.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Greenfield
Greenfield
Affordable
36.00
Technical Checks:
Residual Value
£3,888,035
per net ha
Social rent
Affordable rent
18.00
9.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
9.00
3,507
35
36
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
8.10
13.50
21.60
10.80
54.0
Size sq.m
60
74
114
167
Total sq.m
486
999
2,462
1,804
5,751
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£1,749,600
£4,295,700
£10,588,320
£7,755,480
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
2.70
4.50
7.20
3.60
18.0
Size sq.m
60
74
95
114
Total sq.m
162
333
684
410
1,589
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£262,440
£644,355
£1,323,540
£794,124
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
1.35
2.25
3.60
1.80
9.0
Size sq.m
60
74
95
114
Total sq.m
81
167
342
205
795
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£160,380
£393,773
£808,830
£485,298
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
1.35
2.25
3.60
1.80
9.0
Size sq.m
60
74
95
114
Total sq.m
81
167
342
205
795
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£189,540
£465,368
£955,890
£573,534
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£31,446,171
20%
on OM GDV
£4,877,820.00
6%
on AH transfer values
£423,424
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£5,301,244
3.00%
on OM GDV
£731,673
£731,673
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
8.10
13.50
21.60
10.80
54
Size sq.m
65
74
114
167
Total sq.m
527
999
2,462
1,804
5,792
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£690,768
£1,166,166.00
£2,874,441.60
£2,105,402.40
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
5.40
9.00
14.40
7.20
36
Size sq.m
65
74
95
114
Total sq.m
351
666
1,368
821
3,206
per unit
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£460,512.00
£777,444.00
£1,596,912.00
£958,147.20
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
90
£10,629,793
10%
extra-over on build cost
£1,062,979.32
£0
per net ha
£0
£5,000
per unit
£450,000
£1,512,979
10%
£1,169,277
£1,169,277
5%
£584,639
£584,639
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£216,000
£0
-
Total developer contributions
£216,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£14,844,361
£9,901,104
£0
£396,044
1.75% on land costs
£173,269
Total site costs
£10,470,417
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£30,616,023
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£830,148
APR
6.00%
on net costs
PCM
0.487%
-£830,148
£31,446,171
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
1 Unit Rural
Rural
1 Units
ITEM
Net area (ha)
Stamp Duty
0.05
Old
Private
1.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Greenfield
Small Greenfield
Affordable
0.00
Technical Checks:
Residual Value
£5,568,661
per net ha
Social rent
Affordable rent
0.00
0.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
0.00
3,340
20
1
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
1.00
1.0
Size sq.m
60
74
114
167
Total sq.m
0
0
0
167
167
£psm
£3,700
£4,740
£4,740
£4,740
Total Value
£0
£0
£0
£791,580
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,665
£2,133
£2,133
£2,133
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,035
£2,607
£2,607
£2,607
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,405
£3,081
£3,081
£3,081
Total Value
£0
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£791,580
20%
on OM GDV
£158,316
6%
on AH transfer values
£0
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£158,316
3.00%
on OM GDV
£23,747
£23,747
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
1.00
1
Size sq.m
65
74
114
167
Total sq.m
0
0
0
167
167
Cost per sq.m
£1,312
£1,375
£1,375
£1,375
Total Costs
£0
£0.00
£0.00
£229,625.00
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
65
74
95
114
Total sq.m
0
0
0
0
per unit
Cost per sq.m
£1,312
£1,375
£1,375
£1,375
Total Costs
£0.00
£0.00
£0.00
£0.00
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
1
£229,625
10%
extra-over on build cost
£22,962.50
£0
per net ha
£0
£5,000
per unit
£5,000
£27,963
10%
£25,259
£25,259
5%
£12,629
£12,629
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£4,000
£0
-
Total developer contributions
£4,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£323,223
£278,433
£0
£8,353
1.75% on land costs
£4,873
Total site costs
£291,659
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£773,198
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£18,382
APR
6.00%
on net costs
PCM
0.487%
-£18,382
£791,580
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
4 Units Rural
Rural
4 Units
ITEM
Net area (ha)
Stamp Duty
0.18
Old
Private
4.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Greenfield
Small Greenfield
Affordable
0.00
Technical Checks:
Residual Value
£4,632,722
per net ha
Social rent
Affordable rent
0.00
0.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
0.00
2,644
22
3
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
1.33
1.33
1.33
4.0
Size sq.m
60
74
114
167
Total sq.m
0
99
152
223
473
£psm
£3,700
£4,740
£4,740
£4,740
Total Value
£0
£467,680
£720,480
£1,055,440
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,665
£2,133
£2,133
£2,133
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,035
£2,607
£2,607
£2,607
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,405
£3,081
£3,081
£3,081
Total Value
£0
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£2,243,600
20%
on OM GDV
£448,720
6%
on AH transfer values
£0
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£448,720
3.00%
on OM GDV
£67,308
£67,308
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
1.33
1.33
1.33
4
Size sq.m
65
74
114
167
Total sq.m
0
99
152
223
473
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£125,421.78
£193,217.33
£283,046.44
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
65
74
95
114
Total sq.m
0
0
0
0
per unit
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0.00
£0.00
£0.00
£0.00
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
4
£601,686
10%
extra-over on build cost
£60,168.56
£0
per net ha
£0
£5,000
per unit
£20,000
£80,169
10%
£66,185
£66,185
5%
£33,093
£33,093
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£16,000
£0
-
Total developer contributions
£16,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£864,440
£829,281
£0
£33,171
1.75% on land costs
£14,512
Total site costs
£876,964
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£2,190,124
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£53,476
APR
6.00%
on net costs
PCM
0.487%
-£53,476
£2,243,600
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
9 Units Rural
Rural
9 Units
ITEM
Net area (ha)
Stamp Duty
0.40
Old
Private
9.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Greenfield
Greenfield
Affordable
0.00
Technical Checks:
Residual Value
£4,631,221
per net ha
Social rent
Affordable rent
0.00
0.00
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
0.00
2,645
22
7
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.00
3.00
3.00
9.0
Size sq.m
60
74
114
167
Total sq.m
0
222
342
501
1,065
£psm
£3,700
£4,740
£4,740
£4,740
Total Value
£0
£1,052,280
£1,621,080
£2,374,740
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£1,665
£2,133
£2,133
£2,133
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,035
£2,607
£2,607
£2,607
Total Value
£0
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
60
74
95
114
Total sq.m
0
0
0
0
-
£psm
£2,405
£3,081
£3,081
£3,081
Total Value
£0
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£5,048,100
20%
on OM GDV
£1,009,620
6%
on AH transfer values
£0
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,009,620
3.00%
on OM GDV
£151,443
£151,443
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.00
3.00
3.00
9
Size sq.m
65
74
114
167
Total sq.m
0
222
342
501
1,065
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£282,199.00
£434,739.00
£636,854.50
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.00
0.00
0.00
-
Size sq.m
65
74
95
114
Total sq.m
0
0
0
0
per unit
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0.00
£0.00
£0.00
£0.00
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
9
£1,353,793
10%
extra-over on build cost
£135,379.25
£0
per net ha
£0
£5,000
per unit
£45,000
£180,379
10%
£148,917
£148,917
5%
£74,459
£74,459
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£36,000
£0
-
Total developer contributions
£36,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£1,944,991
£1,864,650
£0
£74,586
1.75% on land costs
£32,631
Total site costs
£1,971,868
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£4,926,478
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£121,622
APR
6.00%
on net costs
PCM
0.487%
-£121,622
£5,048,100
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
14 Units Rural
Rural
14 Units
ITEM
Net area (ha)
Stamp Duty
0.49
Old
Private
9.80
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Greenfield
Greenfield
Affordable
4.20
Technical Checks:
Residual Value
£4,638,803
per net ha
Social rent
Affordable rent
2.10
1.05
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
1.05
3,203
29
10
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.27
3.27
3.27
9.8
Size sq.m
60
74
114
167
Total sq.m
0
242
372
546
1,160
£psm
£3,700
£4,740
£4,740
£4,740
Total Value
£0
£1,145,816
£1,765,176
£2,585,828
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.70
0.70
0.70
2.1
Size sq.m
60
74
95
114
Total sq.m
0
52
66
80
198
£psm
£1,665
£2,133
£2,133
£2,133
Total Value
£0
£110,489
£141,845
£170,213
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.35
0.35
0.35
1.1
Size sq.m
60
74
95
114
Total sq.m
0
26
33
40
99
£psm
£2,035
£2,607
£2,607
£2,607
Total Value
£0
£67,521
£86,683
£104,019
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
0.35
0.35
0.35
1.1
Size sq.m
60
74
95
114
Total sq.m
0
26
33
40
99
£psm
£2,405
£3,081
£3,081
£3,081
Total Value
£0
£79,798
£102,443
£122,932
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£6,482,764
20%
on OM GDV
£1,099,364
6%
on AH transfer values
£59,157
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,158,521
3.00%
on OM GDV
£164,905
£164,905
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
3.27
3.27
3.27
10
Size sq.m
65
74
114
167
Total sq.m
0
242
372
546
1,160
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0
£307,283.36
£473,382.47
£693,463.79
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.00
1.40
1.40
1.40
4
Size sq.m
65
74
95
114
Total sq.m
0
104
133
160
396
per unit
Cost per sq.m
£1,312
£1,271
£1,271
£1,271
Total Costs
£0.00
£131,692.87
£169,065.17
£202,878.20
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
14
£1,977,766
10%
extra-over on build cost
£197,776.58
£0
per net ha
£0
£5,000
per unit
£70,000
£267,777
10%
£217,554
£217,554
5%
£108,777
£108,777
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£39,200
£0
-
Total developer contributions
£39,200
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£2,775,978
£2,253,549
£0
£90,142
1.75% on land costs
£39,437
Total site costs
£2,383,128
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£6,317,627
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£165,137
APR
6.00%
on net costs
PCM
0.487%
-£165,137
£6,482,764
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
40 Units BUA (flatted)
BUA
40 Units
ITEM
Net area (ha)
Stamp Duty
0.34 Brownfield
Brownfield
Technical Checks:
Residual Value
£2,459,296
per net ha
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Old
Private
24.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Affordable
16.00
Social rent
Affordable rent
8.00
4.00
Intermediate
4.00
7,164
119
22
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
24.00
0.00
0.00
0.00
24.0
Size sq.m
60
74
114
167
Total sq.m
1,440
0
0
0
1,440
£psm
£3,600
£4,300
£4,300
£4,300
Total Value
£5,184,000
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
8.00
0.00
0.00
0.00
8.0
Size sq.m
60
74
95
114
Total sq.m
480
0
0
0
480
£psm
£1,620
£1,935
£1,935
£1,935
Total Value
£777,600
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
4.00
0.00
0.00
0.00
4.0
Size sq.m
60
74
95
114
Total sq.m
240
0
0
0
240
£psm
£1,980
£2,365
£2,365
£2,365
Total Value
£475,200
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
4.00
0.00
0.00
0.00
4.0
Size sq.m
60
74
95
114
Total sq.m
240
0
0
0
240
£psm
£2,340
£2,795
£2,795
£2,795
Total Value
£561,600
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£6,998,400
20%
on OM GDV
£1,036,800
6%
on AH transfer values
£108,864
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,145,664
3.00%
on OM GDV
£155,520
£155,520
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
24.00
0.00
0.00
0.00
24
Size sq.m
65
74
114
167
Total sq.m
1,560
0
0
0
1,560
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£2,046,720
£0.00
£0.00
£0
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
16.00
0.00
0.00
0.00
16
Size sq.m
65
74
95
114
Total sq.m
1,040
0
0
0
1,040
per unit
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£1,364,480.00
£0.00
£0.00
£0.00
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
40
£3,411,200
10%
extra-over on build cost
£341,120.00
£200,000
per net ha
£67,000
£5,000
per unit
£200,000
£608,120
10%
£375,232
£375,232
5%
£187,616
£187,616
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£96,000
£0
-
Total developer contributions
£96,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£4,833,688
£823,870
£0
£32,955
1.75% on land costs
£14,418
Total site costs
£871,242
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£6,850,595
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£147,805
APR
6.00%
on net costs
PCM
0.487%
-£147,805
£6,998,400
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
24 Units Rural
Rural
24 Units
ITEM
Net area (ha)
Stamp Duty
1 Greenfield
Greenfield
Technical Checks:
Residual Value
4392816.54
per net ha
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Old
Private
14.40
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Affordable
9.60
Social rent
Affordable rent
4.80
2.40
Intermediate
2.40
3,379
35
15
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
2.45
5.47
2.88
14.4
Size sq.m
60
74
114
167
Total sq.m
216
181
624
481
1,502
£psm
£3,700
£4,740
£4,740
£4,740
Total Value
£799,200
£858,660
£2,956,850
£2,279,750
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
1.20
0.82
1.82
0.96
4.8
Size sq.m
60
74
95
114
Total sq.m
72
60
173
109
415
£psm
£1,665
£2,133
£2,133
£2,133
Total Value
£119,880
£128,799
£369,606
£233,436
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
0.41
0.91
0.48
2.4
Size sq.m
60
74
95
114
Total sq.m
36
30
87
55
208
£psm
£2,035
£2,607
£2,607
£2,607
Total Value
£73,260
£78,711
£225,870
£142,655
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
0.60
0.41
0.91
0.48
2.4
Size sq.m
60
74
95
114
Total sq.m
36
30
87
55
208
£psm
£2,405
£3,081
£3,081
£3,081
Total Value
£86,580
£93,022
£266,938
£168,592
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£8,881,809
20%
on OM GDV
£1,378,892
6%
on AH transfer values
£119,241
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£1,498,133
3.00%
on OM GDV
£206,834
£206,834
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
3.60
2.45
5.47
2.88
14
Size sq.m
65
74
114
167
Total sq.m
234
181
624
481
1,520
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£307,008
£211,464.77
£728,191.87
£561,441
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
2.40
1.63
3.65
1.92
10
Size sq.m
65
74
95
114
Total sq.m
156
121
347
219
842
per unit
Cost per sq.m
£1,312
£1,167
£1,167
£1,167
Total Costs
£204,672.00
£140,976.51
£404,551.04
£255,505.92
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
24
£2,813,811
10%
extra-over on build cost
£281,381.08
£0
per net ha
£0
£5,000
per unit
£120,000
£401,381
10%
£309,519
£309,519
5%
£154,760
£154,760
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£57,600
£0
-
Total developer contributions
£57,600
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
Stamp Duty
4.3
Purchaser costs
£3,943,904
£3,031,909
£0
£121,276
1.75% on land costs
£53,058
Total site costs
£3,206,244
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£8,648,281
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£233,528
APR
6.00%
on net costs
PCM
0.487%
-£233,528
£8,881,809
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
Extra care
Extra care
45 Units
ITEM
Net Site Area
0.46
Private
27.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Retirement Scheme
Affordable
18.00
Technical Checks:
Residual Value
£6,007,458
per net ha
Social rent
Affordable rent
9.00
4.50
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
4.50
6,988
98
23
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
27.00
0.00
0.00
0.00
27.0
Size sq.m
71
74
114
167
Total sq.m
1,917
0
0
0
1,917
£psm
£5,400
£0
£0
£0
Total Value
£10,351,800
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
9.00
0.00
0.00
0.00
9.0
Size sq.m
71
74
95
114
Total sq.m
639
0
0
0
639
£psm
£2,430
£0
£0
£0
Total Value
£1,552,770
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
4.50
0.00
0.00
0.00
4.5
Size sq.m
71
74
95
114
Total sq.m
320
0
0
0
320
£psm
£2,970
£0
£0
£0
Total Value
£948,915
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
4.50
0.00
0.00
0.00
4.5
Size sq.m
71
74
95
114
Total sq.m
320
0
0
0
320
£psm
£3,510
£0
£0
£0
Total Value
£1,121,445
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£13,974,930
20%
on OM GDV
£2,070,360
6%
on AH transfer values
£217,388
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£2,287,748
3.00%
on OM GDV
£310,554
£310,554
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
27.00
0.00
0.00
0.00
27
Size sq.m
96
74
114
167
Total sq.m
2,588
0
0
0
2,588
Cost per sq.m
£1,402
£1,167
£1,167
£1,167
Total Costs
£3,629,160
£0.00
£0.00
£0
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
18.00
0.00
0.00
0.00
18
Size sq.m
96
74
95
114
Total sq.m
1,725
0
0
0
1,725
per unit
Cost per sq.m
£1,402
£1,167
£1,167
£1,167
Total Costs
£2,419,439.95
£0.00
£0.00
£0.00
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
45
£6,048,600
10%
extra-over on build cost
£604,859.99
£200,000
per net ha
£91,446
£5,000
per unit
£225,000
£921,306
10%
£665,346
£665,346
5%
£332,673
£332,673
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£180,000
£0
-
Total developer contributions
£180,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
4.3
£8,458,479
£2,746,790
Stamp Duty
Purchaser costs
£109,872
1.75% on land costs
£48,069
Total site costs
£2,904,730
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£13,650,957
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£323,973
APR
6.00%
on net costs
PCM
0.487%
-£323,973
£13,974,930
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
Retirement home Retirement home
55 Units
ITEM
Net Site Area
0.45
Private
33.00
Nr of units
1.0
Development Value
1.1
1.1.1
1.1.2
1.1.3
1.1.4
Private units
1.2
1.2.1
1.2.2
1.2.3
1.2.4
Social rent
1.3
1.3.1
1.3.2
1.3.3
1.3.4
Affordable rent
1.4
1.4.1
1.4.2
1.4.3
1.4.4
Intermediate
Brownfield
Retirement Scheme
Affordable
22.00
Technical Checks:
Residual Value
£5,917,810
per net ha
Social rent
Affordable rent
11.00
5.50
Sqm/ha
Dwgs/ha
Units/pa
GDV=Total costs
Intermediate
5.50
7,334
122
26
-
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
33.00
0.00
0.00
0.00
33.0
Size sq.m
60
74
114
167
Total sq.m
1,980
0
0
0
1,980
£psm
£4,950
£0
£0
£0
Total Value
£9,801,000
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
11.00
0.00
0.00
0.00
11.0
Size sq.m
60
74
95
114
Total sq.m
660
0
0
0
660
£psm
£2,228
£0
£0
£0
Total Value
£1,470,150
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
5.50
0.00
0.00
0.00
5.5
Size sq.m
60
74
95
114
Total sq.m
330
0
0
0
330
£psm
£2,723
£0
£0
£0
Total Value
£898,425
£0
£0
£0
Flats (NIA)
2 bed house
3 bed house
4+ bed house
No. of units
5.50
0.00
0.00
0.00
5.5
Size sq.m
60
74
95
114
Total sq.m
330
0
0
0
330
£psm
£3,218
£0
£0
£0
Total Value
£1,061,775
£0
£0
£0
Gross Development value
2.0
Developer's Profit
2.1
Private units
2.2
Affordable units
£13,231,350
20%
on OM GDV
£1,960,200
6%
on AH transfer values
£205,821
Total Developer's Profit
3.0
3.1
Development Costs
Sale cost
3.1.1
Private units only
3.2
Build Costs
3.2.1
3.2.1.1
3.2.1.2
3.2.1.3
3.2.1.4
Private units
3.2.2
3.2.2.1
3.2.2.2
3.2.2.3
3.2.2.4
Affordable units
3.2.3
Extra-over BR2013
£2,166,021
3.00%
on OM GDV
£294,030
£294,030
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
33.00
0.00
0.00
0.00
33
Size sq.m
75
74
114
167
Total sq.m
2,475
0
0
0
2,475
Cost per sq.m
£1,353
£1,167
£1,167
£1,167
Total Costs
£3,347,908
£0.00
£0.00
£0
Flats (GIA)
2 bed house
3 bed house
4+ bed house
No. of units
22.00
0.00
0.00
0.00
22
Size sq.m
75
74
95
114
Total sq.m
1,650
0
0
0
1,650
per unit
Cost per sq.m
£1,353
£1,167
£1,167
£1,167
Total Costs
£2,231,938.50
£0.00
£0.00
£0.00
Total build costs
3.3
Extra over construction costs
3.3.1
Externals
3.3.2
Site abnormals (remediation/demolition)
3.3.3
Site opening up costs
3.4
Total extra over construction costs
Professional Fees
3.4.1
on build costs (incl: externals)
3.5
Total professional fees
Contingency
3.5.1
on build costs (incl: externals)
3.6
Total contingency
Developer contributions
3.6.1
Lifetime homes
3.6.2
CSH Level 4
3.6.3
CIL
3.6.4
S106 contribution
3.6.5
-
£0
£0
55
£5,579,846
10%
extra-over on build cost
£557,984.63
£200,000
per net ha
£89,990
£5,000
per unit
£275,000
£922,974
10%
£613,783
£613,783
5%
£306,892
£306,892
£0
per unit
£0
0.0%
build cost
£0
£0
per sqm
£0
£4,000
per unit
£220,000
£0
-
Total developer contributions
£220,000
TOTAL DEVELOPMENT COSTS
4.0
Site Acquisition
4.1
Net site value (residual land value)
4.2
4.3
£7,937,525
£2,662,709
Stamp Duty
Purchaser costs
£106,508
1.75% on land costs
£46,597
Total site costs
£2,815,814
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£12,919,361
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.0
Finance Costs
5.1
Finance
TOTAL PROJECT COSTS [INCLUDING INTEREST]
£311,989
APR
6.00%
on net costs
PCM
0.487%
-£311,989
£13,231,350
This appraisal has been prepared by Peter Brett Associates for the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to inform the Council about the impact of planning policy has on viability at a
strategic level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014) valuation and should not be relied upon as such.
1: Town centre office
ITEM
Net Site Area
0.10
1.0
Development Value
1.1
1: Town centre office
Residual value
-£494,901.39
No. of units
1
per ha
Size sq.m
1350
Rent
190
Yield
7.00%
Value per unit
£3,664,286
Capital Value
£3,664,285.71
No. of months
Rent free period
3
Adjusted for rent free
£3,602,827
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£3,602,827
-£49,490
Purchaser costs
1.75%
-£50,356.22
2.2
Build Costs
2.2.1
1: Town centre office
No. of units
1
Size sq.m
1,500
Cost per sq.m
£1,562
Total Costs
£2,343,000
£2,343,000
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£234,300
£234,300
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£257,730
£257,730
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£2,835,030
5%
£141,751.50
£141,752
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£2,926,425
Rate
20%
£585,285
£585,285
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£3,511,710
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£91,116
PCM
0.565%
-£91,116
£3,602,827
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the
appraisal is to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional
Standards January 2014) valuation and should not be relied upon as such.
2: Business park
ITEM
Net Site Area
0.28
1.0
Development Value
1.1
2: Business park
Residual value
£3,683,238.64
No. of units
1
per ha
Size sq.m
2025
Rent
230
Yield
7.0%
Value per unit
£6,653,571
Capital Value
£6,653,571
No. of months
Rent free period
3
Adjusted for rent free
£6,541,975
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£6,541,975
£1,035,911
Purchaser costs
5.75%
£1,095,476
2.2
Build Costs
2.2.1
2: Business park
No. of units
1
Size sq.m
2,250
Cost per sq.m
£1,479
Total Costs
£3,327,750
£3,327,750
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£332,775
£332,775
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£366,053
£366,053
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£4,026,578
5%
£201,328.88
£201,329
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£5,323,382
Rate
20%
£1,064,676
£1,064,676
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£6,388,059
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£153,916
PCM
0.565%
-£153,916
£6,541,975
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the
appraisal is to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional
Standards January 2014) valuation and should not be relied upon as such.
3: Industrial / warehouse
ITEM
Net Site Area
0.38
1.0
Development Value
1.1
3: Industrial / warehouse
Residual value
-£613,921.06
No. of units
1
per ha
Size sq.m
1425
Rent
85
Yield
8.2%
Value per unit
£1,477,134
Capital Value
£1,477,134
No. of months
Rent free period
3
Adjusted for rent free
£1,448,315.31
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£1,477,134.15
-£230,220
Purchaser costs
1.75%
-£234,249.25
2.2
Build Costs
2.2.1
3: Industrial / warehouse
No. of units
1
Size sq.m
1,500
Cost per sq.m
£747
Total Costs
£1,119,750
£1,119,750
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£111,975
£111,975
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£123,173
£123,173
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£1,354,898
5%
£67,744.88
£67,745
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£1,188,393
Rate
20%
£237,679
£237,679
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£1,426,072
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£51,062
PCM
0.565%
-£22,244
£1,448,315
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is
to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January
2014) valuation and should not be relied upon as such.
4: Small supermarket
ITEM
Net Site Area
0.17
1.0
Development Value
1.1
4: Small supermarket
Residual value
£6,110,293.06
No. of units
1
per ha
Size sq.m
950
Rent
£200
Yield
5.5%
Value per unit
£3,454,545
Capital Value
£3,454,545
No. of months
Rent free period
3
Adjusted for rent free
3,408,614
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£3,408,614
£1,018,382
Purchaser costs
5.75%
£1,076,939
2.2
Build Costs
2.2.1
4: Small supermarket
No. of units
1
Size sq.m
1,000
Cost per sq.m
£1,326
Total Costs
£1,326,000
£1,326,000
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£132,600
£132,600
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£145,860
£145,860
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£1,604,460
5%
£80,223.00
£80,223
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£2,761,622
Rate
20%
£552,324
£552,324
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£3,313,947
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£94,667
PCM
0.565%
-£94,667
£3,408,614
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the
appraisal is to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional
Standards January 2014) valuation and should not be relied upon as such.
5: Supermarket
ITEM
Net Site Area
0.63
1.0
Development Value
1.1
5: Supermarket
Residual value
£5,265,558.73
No. of units
1
per ha
Size sq.m
2375
Rent
220
Yield
5.0%
Value per unit
£10,450,000
Capital Value
£10,450,000
No. of months
Rent free period
3
Adjusted for rent free
10,323,310
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£10,323,310
£3,290,974
Purchaser costs
5.75%
£3,480,205
2.2
Build Costs
2.2.1
5: Supermarket
No. of units
1
Size sq.m
2,500
Cost per sq.m
£1,509
Total Costs
£3,772,500
£3,772,500
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£377,250
£377,250
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£414,975
£414,975
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£4,564,725
5%
£228,236.25
£228,236
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£8,273,166
Rate
20%
£1,654,633
£1,654,633
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£9,927,800
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£395,510
PCM
0.565%
-£395,510
£10,323,310
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the
appraisal is to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional
Standards January 2014) valuation and should not be relied upon as such.
6: Retail warehouse
ITEM
Net Site Area
0.50
1.0
Development Value
1.1
6: Retail warehouse
Residual value
£5,428,416.71
No. of units
1
per ha
Size sq.m
1900
Rent
180
Yield
5.8%
Value per unit
£5,947,826
Capital Value
£5,947,826
No. of months
Rent free period
3
Adjusted for rent free
5,865,272
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£5,865,272
£2,714,208
Purchaser costs
5.75%
£2,870,275.33
2.2
Build Costs
2.2.1
6: Retail warehouse
No. of units
1
Size sq.m
2,000
Cost per sq.m
£731
Total Costs
£1,462,000
£1,462,000
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£146,200
£146,200
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£160,820
£160,820
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£1,769,020
5%
£88,451.00
£88,451
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£4,727,746
Rate
20%
£945,549
£945,549
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£5,673,296
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£191,977
PCM
0.565%
-£191,977
£5,865,272
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is
to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January
2014) valuation and should not be relied upon as such.
7: Town centre retail
ITEM
Net Site Area
0.02
1.0
Development Value
1.1
7: Town centre retail
Residual value
£3,469,291.39
No. of units
1
per ha
Size sq.m
190
Rent
£200
Yield
8.0%
Value per unit
£475,000
Capital Value
£475,000
No. of months
Rent free period
3
Adjusted for rent free
£465,948
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£465,948
£69,386
Purchaser costs
1.75%
£70,600
2.2
Build Costs
2.2.1
7: Town centre retail
No. of units
1
Size sq.m
200
Cost per sq.m
£1,215
Total Costs
£243,000
£243,000
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£24,300
£24,300
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£26,730
£26,730
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£294,030
5%
£14,701.50
£14,702
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£379,332
Rate
20%
£75,866
£75,866
5.00
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£455,198
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
£10,750
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
PCM
0.565%
-£10,750
£465,948
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the
appraisal is to inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional
Standards January 2014) valuation and should not be relied upon as such.
8: Hotel (60 bed)
ITEM
Net Site Area
0.30
1.0
Development Value
1.1
8: Hotel (60 bed)
Residual value
£1,247,740.61
No. of units
1
per ha
Size sq.m
1425
Rent
£200
Yield
6.0%
Value per unit
£4,750,000
Capital Value
£4,750,000
No. of months
Rent free period
3
Adjusted for rent free
£4,681,307.22
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£4,681,307
£374,322
Purchaser costs
4.75%
£392,102
2.2
Build Costs
2.2.1
8: Hotel (60 bed)
1
Size sq.m
1,500
Cost per sq.m
£1,798
Total Costs
£2,697,000
£2,697,000
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£269,700
£269,700
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£296,670
£296,670
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£3,263,370
5%
£163,168.50
£163,169
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£3,818,641
Rate
20%
£763,728
£763,728
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£4,582,369
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£98,938
PCM
0.565%
-£98,938
£4,681,307
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to
inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014)
valuation and should not be relied upon as such.
9: Small local convenience
ITEM
Net Site Area
0.03
1.0
Development Value
1.1
9: Small local convenience
Residual value
£9,255,457.51
No. of units
1
per ha
Size sq.m
266
Rent
£210
Yield
6.0%
Value per unit
£931,000
Capital Value
£931,000
No. of months
Rent free period
3
Adjusted for rent free
£917,536.21
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£917,536
£287,948
Purchaser costs
4.75%
£301,625
2.2
Build Costs
2.2.1
9: Small local convenience
1
Size sq.m
280
Cost per sq.m
£1,241
Total Costs
£347,480
£347,480
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£34,748
£34,748
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£38,223
£38,223
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£420,451
5%
£21,022.54
£21,023
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£743,098
Rate
20%
£148,620
£148,620
5.00
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£891,718
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
£25,818
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
PCM
0.565%
-£25,818
£917,536
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to
inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014)
valuation and should not be relied upon as such.
10: Carehome
ITEM
Net Site Area
0.25
1.0
Development Value
1.1
10: Carehome
Residual value
-£3,067,983.13
No. of units
1
per ha
Size sq.m
1400
Rent
£185
Yield
7.0%
Value per unit
£3,700,000
Capital Value
£3,700,000
No. of months
Rent free period
3
Adjusted for rent free
£3,637,942.07
Total development value
2.0
Development Cost
2.1
Site Acquisition
2.1.1
Site value (residual land value)
£3,637,942
-£766,996
Purchaser costs
1.75%
-£780,418
2.2
Build Costs
2.2.1
10: Carehome
1
Size sq.m
2,000
Cost per sq.m
£1,483
Total Costs
£2,966,000
£2,966,000
2.3
Externals
2.3.1
external works as a percentage of build costs
10.0%
£296,600
£296,600
2.4
Professional Fees
2.4.1
as percentage of build costs & externals
10%
£326,260
£326,260
2.5
Total construction costs
3.0
Contingency
3.1.1
as a percentage of total construction costs
£3,588,860
5%
£179,443.00
£179,443
TOTAL DEVELOPMENT COSTS (including land payment)
4.0
Developers' Profit
4.1
as percentage of total development costs
£2,987,885
Rate
20%
£597,577
£597,577
TOTAL PROJECT COSTS [EXCLUDING INTEREST]
£3,585,462
TOTAL INCOME - TOTAL COSTS [EXCLUDING INTEREST]
5.00
Finance Costs
TOTAL PROJECT COSTS [INCLUDING INTEREST]
APR
7.00%
£52,480
PCM
0.565%
-£52,480
£3,637,942
This appraisal has been prepared by Peter Brett Associates on behalf of the Council. The appraisal has been prepared in line with the RICS valuation guidance. The purpose of the appraisal is to
inform Council as to the impact of planning policy has on viability at a strategic borough level. This appraisal is not a formal 'Red Book' (RICS Valuation – Professional Standards January 2014)
valuation and should not be relied upon as such.
Economic Viability Assessment
Mole Valley District Council CIL
Appendix C
Viability Sensitivity Analysis
To help the council decide as to where they may wish to set there CIL rates some sensitivity testing of
changes to values and costs has been carried out. However, this analysis should not be used as a
basis for the Charge at this point in time because this should be based on current costs and current
values.
But the sensitivity analysis will help guide the Council on identifying suitable trigger points whereby a
review of the CIL is required – for example if the economy worsens and values drop by 10%, then it
may be appropriate to lower or drop the charge. Or alternatively if the economy recovers in the future,
then there may be scope to charge CIL on more uses at that time.
Figure C.1 shows three different potential scenarios for residential uses.

The red dots at the top of each typology show the impact on viability in the event sales values
increase by 10%.

Conversely, the blue squares at the bottom end show the impact on viability if sales values
were to decrease by 10%.

The final potential scenario, as indicated by the black triangles, is a simultaneous increase in
both values and build costs by 10%.
Whilst not wishing to make predictions for the future, anecdotal evidence from our consultation in the
local area, and our understanding of wider national trends, suggests that an increase in both values
and costs is perhaps the more likely scenario. Having tested a tested a like-for-like increase (both
10%) it can be seen that the net effect on headroom is positive, as an increase in values has a greater
impact on the bottom line values compared to costs. If however it is believed that the increase in
costs is outpacing the increase in values, then it may be appropriate to reconsider this appraisal.
Figure C.2 shows three different potential scenarios for non-residential uses.
Since the non-residential market is still more volatile, we have illustrated what will happen with both a
fall and a rise in values of 10, and again a simultaneous increase in both rental values and build costs
by 10%.
As C.2 shows, the convenience retail sector appears relatively more resilient to change as the small
supermarket, small convenience retailer and the retail warehouse all remain viable even with a 10%
decrease in rental values.
Economic Viability Assessment
Mole Valley District Council CIL
Figure C.1 Sensitivity analysis of Residential uses
£1,200
£1,100
£1,000
£900
£800
£700
£600
£500
£400
£300
Sales value fall by
10%
£200
£100
high price
Sales values
increase by 10%
£0
-£100
close
Build costs and
-£200
Sales values
increase by 10%
-£300
-£400
-£500
24 Units Rural
14 Units Rural
9 Units Rural
4 Units Rural
1 Unit Rural
90 Units BUA
40 Units BUA (flatted)
40 Units BUA
30 Units BUA
24 Units BUA
14 Units BUA
9 Units BUA
4 Units BUA
1 Unit BUA
Economic Viability Assessment
Mole Valley District Council CIL
Figure C.2 Sensitivity analysis of Non-residential uses
£800
£600
£400
Rental values
decrease by
10%
Rental
values
increase by
Rental
10% values
lowand
price
build
costs
increase by
high price
10%
£200
£0
-£200
-£400
-£600
-£800
-£1,000
10: Carehome
9: Small local convenience
8: Hotel (60 bed)
7: Town centre retail
6: Retail warehouse
5: Supermarket
4: Small supermarket
3: Industrial / warehouse
2: Business park
1: Town centre office
close
Economic Viability Assessment
Mole Valley District Council CIL
Appendix D
New Homes Sales Values
Location
Type
Broad
Location
Price Floorspace
Sales value
per sqm
Mullins Court, West Street, Dorking,
Detached
Surrey, RH4
Dorking
£675,000
106
£6,368
Mullins Court, West Street, Dorking,
Flat
Surrey, RH4
Dorking
£565,000
122
£4,631
Mullins Court, West Street, Dorking,
Flat
Surrey, RH4
Dorking
£525,000
100
£5,240
Vincent Gardens, Dorking, Surrey,
RH4
Dorking
£519,950
113
£4,601
Mullins Court, West Street, Dorking,
Flat
Surrey, RH4
Dorking
£325,000
68
£4,758
Leslie Road, Dorking, Surrey
Terraced
Dorking
£295,950
41
£7,218
Leslie Road, Dorking, Surrey
Terraced
Dorking
£198,000
41
£4,829
The Headley at Chorus Gardens,
Horsham Road, RH5, RH5 4RA
Detached
Rural
£769,950
164
£4,695
The Westcott at Chorus Gardens,
Horsham Road, RH5
Detached
Rural
£744,950
165
£4,515
The Capel at Chorus Gardens,
Horsham Road, RH5
Detached
Rural
£599,950
138
£4,347
The Leith at Chorus Gardens,
Horsham Road, RH5, RH5 4RA
Semidetached
Rural
£464,950
98
£4,744
The Shere at Chorus Gardens,
Horsham Road, RH5
Semidetached
Rural
£462,950
98
£4,724
East Horsley
Detached
Rural
£995,000
191
£5,207
East Horsley
Semidetached
Rural
£725,000
114
£6,360
Dorking Road, Bookham,
Leatherhead, KT23
Semidetached
Bookham
£629,950
134
£4,691
Great Bookham
Detached
Bookham
£799,950
161
£4,956
High Warren, The Warren,
Ashtead, Surrey, KT21
Detached
Ashtead
£3,500,000
671
£5,216
Betchworth, Surrey
Detached
Betchworth
£895,000
205
£4,366
Betchworth, Surrey
Detached
Betchworth
£495,000
130
£3,808
Walton On The Hill
Detached
Rural
£2,390,000
571
£4,186
Walton On The Hill
Detached
Rural
£2,500,000
519
£4,817
Withey Meadows, Hookwood,
Horley, RH6
Detached
Hookwood
£370,000
113
£3,274
Plot 36 - The Burstow at Smallfield
Detached
Horley
£625,000
166
£3,756
Terraced
Economic Viability Assessment
Mole Valley District Council CIL
Green, Smallfield Road, Horley,
RH6
Plot 15 - The Wakehurst at
Smallfield Green, Smallfield Road,
Horley, RH6
Detached
Horley
£600,000
145
£4,135
Crocknorth Road Dorking
Detached
Dorking
£800,000
170
£4,706
Economic Viability Assessment
Mole Valley District Council CIL
Appendix E
Non-Residential Market Data
Research on High Street retail
Size
Rent (p.a.) per
sqm
Addlestone, South East
1,241
£260
39/40A Wrythe Lane
Carshalton, South East
2,351
£135
13 , County Mall Shopping Centre
Crawley, South East
2,978
£452
72 , County Mall Shopping Centre
Crawley, South East
2,550
£264
8 , County Mall Shopping Centre
Crawley, South East
1,396
£694
36 Queens Square
Crawley, South East
2,058
£157
8/9 Queens Square
Crawley, South East
8,477
£121
1142, The Whitgift
Croydon, South East
796
£636
125 North End
Croydon, South East
1,475
£730
4/5 Purley Way Crescent
Croydon, South East
2,385
£214
83 North End
Croydon, South East
2,094
£565
87 North End
Croydon, South East
3,769
£657
1 High Street
Dorking, South East
400
£753
61 West Street
Dorking, South East
2,723
£138
11 High Street
Epsom, South East
3,406
£190
5 High Street
Epsom, South East
1,512
£231
Former Health Club
Epsom, South East
31,650
£145
46-48 East Street
Horsham, South East
2,721
£178
Ye Olde King's Head Hotel
Horsham, South East
5,683
£123
1 The Swan Centre
Leatherhead, South East
1,214
£266
10-12 High Street
Leatherhead, South East
1,553
£312
30 (Unit 13B) Swan Centre
Leatherhead, South East
372
£434
49-51 High Street
Leatherhead, South East
2,069
£182
Ground Floor, 14 High Street
Leatherhead, South East
1,240
£347
Unit 32/33, Belfry Shopping Centre ,
Belfry Shopping Centre
Redhill, South East
2,453
£351
38 High Street
Redhill, South East
717
£270
20-22 High Street
Reigate, South East
2,240
£327
61 London Road
Reigate, South East
1,032
£261
Times , Times Square
Sutton, South East
5,735
£211
Unit 2.16, BU19 , St Nicholas
Shopping Centre
Sutton, South East
1,374
£313
Unit 2.25/27 , St Nicholas Shopping
Sutton, South East
6,042
£249
Scheme
Location
303-307 Woodham Lane
Economic Viability Assessment
Mole Valley District Council CIL
Scheme
Location
Size
Rent (p.a.) per
sqm
Centre
Unit 2.29 , St Nicholas Shopping
Centre
Sutton, South East
1,363
£344
21 High Street
Sutton, South East
2,255
£277
54-56 Grove Road
Sutton, South East
3,044
£194
143 Hersham Road Walton on
Thames
Walton-on-Thames, South
East
4,000
£175
Queens Rd
Weybridge, South East
993
£304
Unit 3 105/109 Queens Road
Weybridge, South East
1,265
£312
Unit 15, Bandstand Mall , The
Peacocks Shopping Centre
Woking, South East
1,860
£289
Unit 5, Bandstand Mall , The
Peacocks Shopping Centre
Woking, South East
1,511
£321
14 & 16 Commercial Way
Woking, South East
1,770
£213
Unit 4 Middle Walk
Woking, South East
978
£413
Research on Supermarkets
Rent (sqm)
Yield
New
store
Date
London N7
£193
5.25%
N
Unknown
Sainsbury’s
Londonderry
£167
5.36%
N
Unknown
Waitrose
Wantage
£172
4.50%
N
Unknown
Tesco
Wembley
£317
5.50%
Y
Sep-12
Tesco
Congleton
-
4.90%
Y
Jun-12
Tesco
Glastonbury
-
4.50%
Y
Apr-12
Tesco
St Ives
-
4.90%
Y
Jan-12
Tesco
Tiptree
£236
4.90%
Y
Jan-12
Tesco
Cross Point, Coventry
-
4.57%
Y
Sep-11
Tesco
Keynsham
-
4.96%
Y
Aug-11
Tesco
Ruthin
£161
4.96%
Y
Aug-11
Tesco
Welling
-
5%
Y
Jul-11
Tesco
Cardiff
-
4.50%
N
Feb-11
Tesco Investment
Chatteris
-
5%
Y
Sep-12
Tesco Investment
Gosport
£215
5%
Y
Apr-12
Tesco Investment
Corby
£215
4.60%
Y
Oct-11
Tesco Investment
Welling High St, Bexley
£232
4.75%
Y
Jun-11
Sainsbury’s
Putney
£273
4%
N
Current
Tesco
Perth
£212
4.35%
N
Aug-13
Store Operator
Location
Tesco Metro
Economic Viability Assessment
Mole Valley District Council CIL
Scheme
Location
Size
Rent (p.a.) per
sqm
Sainsbury’s
Sale
£242
4.10%
N
Aug-13
Sainsbury’s
Hythe
£226
4.10%
Y
Aug-03
Sainsbury’s
Ashford
£248
4.10%
Y
Aug-13
Morrisons
Milton Keynes
£242
4.25%
Y
Jul-13
Morrisons
Edgware Road, London
£286
4.60%
Y
Jan-13
Sainsbury’s
Harrow Manor Way, London
£237
4.50%
Y
Jan-13
Sainsbury’s
March
£194
4.76%
N
Jul-13
Morrisons
Aldershot
£224
4.25%
Y
Apr-13
Sainsbury’s
Hayes
£331
4.19%
Y
Apr-13
Tesco
Oldham
£181
5.28%
N
Current
Research on Smaller Supermarkets (rents)
Broad Location
Tenant
Achieved rent per sqm
Transaction date
Cheshire
Aldi Stores Ltd
137
2013
West Midlands
Aldi Ltd
147
2013
Merseyside
Aldi
152
2011
London
Lidl Ltd
161
2008
West Midlands
Iceland Foods Plc
161
2008
Nottinghamshire
ALDI, Inc.
171
2006
Suffolk
ALDI, Inc.
175
2013
Cheshire
Aldi Stores Ltd
191
2009
Essex
Lidl Ltd
191
2008
London
Lidl Ltd
279
2010
Research on Smaller Supermarkets (yields)
Broad Location
Tenant
Yield (%)
Transaction date
Lancashire
Aldi Stores Ltd
6.25
2009
Not Disclosed
Lidl Ltd,
6.5
2010
Co Durham
Lidl UK Properties GmbH,
7.46
2010
Middlesex
Lidl Ltd
4.15
2009
London
Lidl (UK) GMBH
5.5
2006
Staffordshire
n/a
5.2
2005
West Glamorgan
Lidl Ltd
5.76
2005
Avon
n/a
5.75
2005
Research on Small, local Convenience retailers
Economic Viability Assessment
Mole Valley District Council CIL
Broad Location
Tenant
Size (sqm) Rent (per sqm)
Transaction date
Dorking
Waitrose
260
£288
2013
Redhill
Co-operative Group
363
£172
2012
Cobham
n/a
395
£253
2010
Reigate
n/a
291
£180
2010
Redhill
n/a
196
£242
2010
Research on Office and Industrial units
Type
Scheme
Location
Rent (p.a.) per sqm
Office
Serviced Office for rent
Dorking
£171
Office
Office to rent
Dorking
£135
Office
1st Floor Front Suite
Horsham
£161
Office
Riverbridge House,
Leatherhead
£200
Office
Swan House
Leatherhead
£178
Office
Bluebird House
Leatherhead
£274
Office
Unit 4 The Axis Centre
Leatherhead
£207
Industrial
Unit 16 Gatwick International Distribution Centre
Crawley
£81
Industrial
Unit 5 Gatwick International Distribution Centre
Crawley
£97
Industrial
Unit 19, Gatwick International Distribution Centre
Crawley
£97
Mole Valley District Council
Community Infrastructure Levy
Economic Viability Assessment
Addendum Report
On behalf of Mole
Project Ref: 33833 | Rev: v2 | Date: November 2015
Office Address: 10 Queen Square, Bristol, BS1 4NT
T: +44 (0)117 928 1560 E: [email protected]
Valley District Council
Addendum Report
Document Control Sheet
Project Name: Mole Valley District Council
Project Ref:
33833
Report Title:
Community Infrastructure Levy EVA Addendum report
Doc Ref:
Addendum Report V2
Date:
November 2015
Name
Position
Signature
Date
Prepared by:
Tom Marshall
Assistant Planner
TM
November 2015
Reviewed by:
Russell Porter
Senior Associate
Economist
RP
November 2015
Approved by:
John Baker
Partner
JB
November 2015
For and on behalf of Peter Brett Associates LLP
Revision
Date
Description
Prepared
Reviewed
Approved
V1
10/11/15
Reviewed policy changes
TM
RP
JB
V2
16/11/15
Reviewed new evidence about
small sites
TM
RP
JB
Peter Brett Associates LLP disclaims any responsibility to the Client and others in respect of any
matters outside the scope of this report. This report has been prepared with reasonable skill, care and
diligence within the terms of the Contract with the Client and generally in accordance with the
appropriate ACE Agreement and taking account of the manpower, resources, investigations and
testing devoted to it by agreement with the Client. This report is confidential to the Client and Peter
Brett Associates LLP accepts no responsibility of whatsoever nature to third parties to whom this
report or any part thereof is made known. Any such party relies upon the report at their own risk.
© Peter Brett Associates LLP 2015
ii
Addendum Report
Contents
1
Introduction ................................................................................................................................. 1
1.1
2
Purpose of the note ....................................................................................................... 1
Re-appraisal of Small Sites ........................................................................................................ 2
2.1
Revisions to tested sites with up to 9 units ................................................................... 2
2.2
Retesting of sites with up to 9 units ............................................................................... 3
2.3
Recommendations......................................................................................................... 4
Tables
Table A1.1 CIL rate recommended in May 2015..................................................................................... 1
Table A2.1 Revised dwelling mix ............................................................................................................ 3
Table A2.2 Retesting of sites of up to 9 units .......................................................................................... 3
iii
Addendum Report
iv
Addendum Report
1
Introduction
1.1
Purpose of the note
1.1.1
In February 2015, Peter Brett Associates (PBA) was commissioned to provide evidence and
advice to support the introduction of a Community Infrastructure Levy in Mole Valley district.
1.1.2
PBA tested a range of residential and retail viability appraisals on behalf of Mole Valley District
Council, which represented the types of development that were considered likely in the district
over the course of the local Core Strategy timeline. The assumptions used, and the
conclusion of the testing, is set out in the May 2015 study, titled Mole Valley District Council
Community Infrastructure Levy.
1.1.3
Following the publication of the May 2015 report, the Council produced a Preliminary Draft
Charging Schedule (PDCS) setting out the Community Infrastructure Levy (CIL) that the
Council intends to charge. For residential uses, the PDCS recommended the CIL rates set out
in Table A1.1.
Table A1.1 CIL rate recommended in May 2015
Area/Use
Residential within built up areas
Residential within rural area
Recommended CIL rate
£175
£250
th
1.1.4
This PDCS has been subject to a consultation period, which ran from the 6 of August to the
th
18 of September 2015. During this consultation period, a change in national policy has led
the Council to revert its proposed affordable housing policy for schemes of between 1 and 9
units from requiring zero affordable to seeking a financial contribution equivalent to 20% onsite affordable housing. Since the viability of smaller sites was a common focus in some of the
responses received during the consultation period, PBA have been asked to test the impact
that this may have to the viability of the tested smaller site typologies.
1.1.5
In addition, a representation made by the Federation of Small Businesses to the PDCS made
a point that build costs on small sites tended to be much higher than general build costs
allowed. Plus, further evidence by the Council to support viability testing smaller sites skewed
towards larger dwellings sizes has been presented.
1.1.6
Consequently, the Council have instructed PBA to re-test the small site typologies to allow for
the change in affordable housing requirements plus a slightly revised 4-unit scheme typology.
1.1.7
This additional work and the findings are set out in this addendum report.
Addendum Report
2
Re-appraisal of Small Sites
2.1
Revisions to tested sites with up to 9 units
2.1.1
As part of our further analysis of smaller sites, following the Council returning to a proposed
affordable housing policy for schemes of between 1 and 9 units, the Council has provided PBA
with data showing the level of affordable housing contributions received since 2014 on sites
with 1, 4 and 9 units averaged at £22,423 per unit. To model the effects of imposing a
financial contribution for affordable housing, PBA have therefore added the average figure
(£22,423 per unit) as a cost for affordable housing contributions into our viability modelling for
sites with fewer than 10 units.
2.1.2
Also, with changes in national policy restricting S106 to cover only site mitigation, the Council
have suggested that there would likely to be a lower residual S106 (i.e. non affordable housing
related) on small scheme than previously tested. This is because it is reasonable to assume
that such small sites have a lower impact and therefore a lower S106 planning mitigation
requirement than would be expected on larger sites, particularly now that the small scheme
would also be contributing to affordable housing. Consequently, for the purposes of viability
testing for CIL, the tested typologies with less than 6 units are now assumed to pay an
average of £1,000 per unit.
2.1.3
The retesting has also considered point the raised by the Federation of Small Businesses that
build costs on small sites have higher build costs. This representation referenced a recently
1
published BCIS report (August 2015) which looked at data for housing sites with 1 to 5 units
and identified that the build cost costs were on average some 13% higher than build costs on
larger schemes with over 10 units, and schemes with 1 to 10 units being some 6% higher than
2
larger schemes. The CIL Economic Viability A6ssessment Report (May 2015) allowed for
increased build costs on smaller schemes based on 3 or fewer units before reducing the costs
for 4 to 14 units and then reducing it again for schemes with 15+ units. Given the respected
authority of BCIS on matters of build costs, the retesting now applies the highest build costs to
sites with up to 5 units, while the next highest build costs are applied to sites 6 to 10 units.
2.1.4
A final adjustment for small sites testing was applied to the 4 unit scheme typologies to allow
for more reasonable housing type profile. The Council have provided PBA with their compete
list of permissions granted by Mole Valley DC since 2011 for sites with under 10 units, which
indicate that 95% of new build dwellings in small schemes were 3+ bedrooms in size, and over
50% of units were provided as 4+ bedroom houses with the rest provided mostly as 3 and
then 2 bed houses. The data shows that on sites with few dwellings (under 5), there is a clear
preference to develop larger family homes. Therefore, it is felt necessary to amend the 4 unit
typology to include 50% of units with 4+ bedrooms, which is up from 33%, while the proportion
of 3-bed and 2-bed units are revised down from 33% to 25% each. With this evidence, the
retesting is based on the 1, 4 and 9 unit scheme mixes shown in Table A2.1.
1
Housing development: the economics of small sites – the effect of project size on the cost of housing
construction. Report for The Federation of Small Businesses BCIS, August 2015
2
See paras 5.4.1 to 5.4.3.
Addendum Report
Table A2.1 Revised dwelling mix
Typology
2 bed house
3 bed house
4+ bed house
1 Unit - Built up Urban Area (BUA)
0%
0%
100%
4 Units - Built up Urban Area (BUA)
25%
25%
50%
9 Units - Built up Urban Area (BUA)
33%
33%
33%
1 Unit - Rural
0%
0%
100%
4 Units - Rural
25%
25%
50%
9 Units - Rural
33%
33%
33%
2.1.5
In retesting sites small sites to include the revision to the Council’s affordable housing, likely
S106 contributions, build costs and a shift in typologies for the 4 unit schemes, no other
amendment in typology, assumed development values or costs informing the May 2015 report
have been made. It is therefore intended that this addendum report is read in conjunction with
the May 2015 report.
2.2
Retesting of sites with up to 9 units
2.2.1
Table A2.2 shows the results from retesting the 1, 4 and 9 unit typologies. For comparison
purposes, in the right hand column is the recommended CIL that was suggested in the original
report.
Table A2.2 Retesting of sites of up to 9 units
Land Type
Recommende
CIL Liable
d
Floorspace Viable?
CIL Rate
(Headroom)
(May 2015)
Typology
Broad Location
1 Unit BUA
Built up urban area Small Brownfield
£128
Yes
£175
4 Units BUA
Built up urban area Small Brownfield
£59
Yes
£175
9 Units BUA
Built up urban area Brownfield
£338
Yes
£175
1 Unit Rural
Rural
Small Greenfield
£537
Yes
£250
4 Units Rural Rural
Small Greenfield
£302
Yes
£250
9 Units Rural Rural
Greenfield
£465
Yes
£250
2.2.2
When compared to the May 2015 report findings, the results of the retesting identifies that
viability is reduced for small sites. Therefore the previously recommended CIL rates may
need to be reconsidered.
2.2.3
Sites with less than 10 units in rural areas are still comfortably able to deliver the
recommended CIL rate of £250 per sqm, as indicated by the substantial headrooms in Table
A2.2. Also, the 9 unit scheme in the built up urban areas is still able to deliver the
recommended CIL rate of £175 per sqm, as indicated by the headroom in Table A2.2.
2.2.4
But the lower headrooms for the re-tested 1 and 4 unit typologies within the built up urban
areas suggest that the recommended £175 per sqm levy would generally be unaffordable. The
Addendum Report
differences in viability for a 1 or 4 unit typology scheme compared with the 9 units schemes,
largely reflects differences in their average build costs, as reported in the May 2015 findings
and the recent BCIS publication (August 2015).
2.3
Recommendations
2.3.1
The May 2015 study identifies that for units of up to 10 dwellings, if affordable housing is 0%,
then a £175 per sqm CIL rate could be accommodated in built up urban areas and a £250 per
sqm CIL rate in rural areas.
2.3.2
But owing to a change in the application of the Council’s affordable housing policy, it is
necessary to set differential CIL rates between schemes of different sizes on the basis of
viability and differential build costs, in addition to differential locations that was reported in the
May 2015 report. With the reintroduction of the Council’s policy seeking 20% affordable
housing on these schemes then we would advise that in built up areas, sites with up to 5 units
can accommodate a CIL rate of £50 and sites with 6 to 9 units could accommodate a CIL rate
of £175.
2.3.3
For rural sites, the revised testing identifies that the proposed CIL rate of £250 per sqm
remains appropriate even with the requirement of a financial contribution to affordable
housing, and therefore no changes in the recommended CIL rates for rural schemes would be
necessary on the basis of size of scheme.