SBC 9A I
D|S|P
Housing & Development Consultants
Appendix I
Development Appraisal Assumptions
D|S|P Housing and Development Consultants
Spelthorne Borough Council - Community Infrastructure Levy Viability Assessment - Residential Assumptions Sheet
Percentage Affordable Housing & Tenure Mix
50% Affordable Housing*
Scenario type Appraised
1 House
10 Houses
Site type
PDL / Garden Land /
Amenity Space etc /
Existing Residential
PDL / Employment /
Existing Residential
Indicative Density Dwelling Mix
(BF
(Dwellings per
= Bed Flat;
BH =
Bed House)
hectare - dph)1
Private Mix
Affordable Mix: Tenure
Split 65% Rent; 35%
Build Period (Months)
Intermediate (shared
ownership)
40
1 x 4BH
1 x 4BH
N/A
6
40
7 x 2BH, 3 x 3BH
7 x 2BH, 2 x 3BH
N/A
9
10 Flats
PDL / Existing Residential
75
3 x 1BF, 7 x 2BF
3 x 1BF, 7 x 2BF
N/A
9
14 Houses
PDL / Existing Residential
40
10 x 2BH, 4 x 3BH
10 x 2BH, 4 x 3BH
N/A
12
75
4 x 1BF, 10 x 2BF
4 x 1BF, 10 x 2BF
N/A
12
40
10 x 2BH, 4 x 3BH, 1 x
4BH
75
5 x 1 BF, 10 2BF
14 Flats
15 Houses
15 Flats
PDL / Employment /
Existing Residential
PDL / Employment /
Existing Residential
PDL / Employment /
Existing Residential
35 Mixed
PDL / Employment /
Existing Residential
55
40 Unit Sheltered Scheme
PDL / Employment
200
50 Mixed
PDL / Employment /
Existing Residential
55
100 Mixed
PDL / Employment
55
4 x 1BF, 10 x 2BF, 13
x 2BH, 7 x 3BH, 1 x
4BH
28 x 1BF; 12 x 2BF
5 x 1BF, 15 x 2BF, 18
x 2BH, 10 x 3BH, 2 x
4BH
10 x 1BF, 33 x 2BF, 34
x 2BH, 20 x 3BH, 3 x
4BH
3 x 2BH, 2 x 3BH, 1 x
4BH AR / 2 x 2BH SO
2 x 1BF, 3 x 2BF AR / 1 x
2 x 1BF, 5 x 2BF
1BF, 2 x 2BF SO
3 x 2BF, 4 x 2BH, 3 x
4 x 1BF, 5 x 2BF, 6 x 2BH, 4 x
3BH, 1 x 4BH AR / 2 x
3BH
2BF, 3 x 2BH SO
14 x 1BF; 6 x 2BF
14 x 1BF; 6 x 2BF
5 x 2BF, 6 x 2BH, 5 x
5 x 1BF, 7 x 2BF, 8 x 2BH, 5 x
3BH, 2 x 4BH AR / 3 x
3BH
2BF, 4 x 2BH SO
10 x 2BF, 10 x 2BH, 10 x
10 x 1BF, 15 x 2BF, 15 x 2BH, 10
3BH, 3 x 4BH AR / 8 x
x 3BH
2BF, 9 x 2BH SO
5 x 2BH, 2 x 3BH
12
12
15
12
18
24
*Fully applied policy position. Actual percentage will vary due to numbers rounding.
Affordable housing mix proportional to private mix but assumes for afforability purposes that only units of 2-beds or less are transferred for intermediate housing (assumed as Shared ownership - SO) wherever possible
Unit Sizes (sq m)*
Affordable
Private
1-bed flat
2-bed flat
2-bed house
3-bed house
4-bed house
50
67
75
87
110
50
61
75
95
125
Open Market Value &
Value Indications
1 Bed Flat
2 Bed Flat
2 Bed House
3 Bed House
4 Bed House
Value House (£/m2)
Affordable Housing Revenue -
VL1
VL2
VL3
VL4
VL5
VL6
VL7
VL8
£112,500
£137,250
£168,750
£213,750
£281,250
£2,250
£125,000
£152,500
£187,500
£237,500
£312,500
£2,500
£137,500
£167,750
£206,250
£261,250
£343,750
£2,750
£150,000
£183,000
£225,000
£285,000
£375,000
£3,000
£162,500
£198,250
£243,750
£308,750
£406,250
£3,250
£175,000
£213,500
£262,500
£332,500
£437,500
£3,500
£187,500
£228,750
£281,250
£356,250
£468,750
£3,750
£200,000
£244,000
£300,000
£380,000
£500,000
£4,000
Affordable Rented - capitalisation based on up to 80% of net market rent. Applied average of RP guide information; subject to caps where necessary based on Walton
BRMA LHA rates for 1 & 2-bed properties (£165 & £211 per week respectively) and £271 & £353 per week respectively for 3 and 4 beds.
Appendix I - Development Assumptions
D|S|P Housing and Development Consultants
Development / Policy Costs
RESIDENTIAL BUILDING, MARKETING & S106 COSTS
Build Costs Flats (Generally) (£/sq. m) 1
Build Costs Flats (3-5 storey)
Build Costs Houses (Mixed Developments - generally) (£/sq. m)
Build Costs (Sheltered Housing - 3-storey) (£/sq.m) 1
1
£1,170
£1,168
£1,027
£1,101
Site Prep & Survey Costs (£ / unit)
£4,500
Contingencies (% of build cost)
Professional & Other Fees (% of build cost)
5%
10.0%
Sustainable Design / Construction Standards (% of build cost) 2
5.85%
Sustainable Design / Construction Standards (% of build cost) 2 Sensitivity testing CfSH Level 5
15%
Residual s.106 /non-CIL costs (£ per unit) (to include SAMM contribution)
£1,500
Marketing & Sales Costs (%of GDV)
Legal Fees on sale (£ per unit)
3%
£750
DEVELOPER'S RETURN FOR RISK AND PROFIT
Open Market Housing Profit (% of GDV)
Affordable Housing Profit (% of GDV)
20.0%
6.0%
FINANCE & ACQUISITION COSTS
Arrangement Fees - (% of loan)
Miscellaeneous (Surveyors etc) - per unit
Agents Fees (% of site value)
Legal Fees (% of site value)
Stamp Duty Land Tax (% of site value)
Finance Rate - Build (%)
Finance Rate - Land (%)
2.0%
0.00%
1.50%
0.75%
0% to 5%
7.0%
7.0%
In addtion to CIL trial rates applied
HMRC scale
Notes:
1
Build cost taken as "Median" figure from BCIS for that build type - e.g. flats ; houses storey heights etc and then rounded. Median figure gives a better figure than the Mean as it is not so influenced by rogue figures that can distort the mean on small sample sizes. BCIS data: Flats (Generally): £1017/sq.
m GIA; Houses Mixed Development (generally): £893/sq. m GIA. Sheltered housing - £1,001/m².
BCIS build costs taken from 3rd Quarter 2012 (latest confirmed) and rebased to Spelthorne Location Factor of 113 (compared with national base 100) including preliminaries and contractor's profit but without externals, contingencies or fees.
Above build costs include external works at 15% (added to BCIS basis) (10% for sheltered housing).
2
The above costs are based on the Cost of Building to the Code for Sustanable Homes - Updated Cost Review (August 2011) cost data assuming Building Regs 2010 baseline. All appraisals assume cost uplift of 5.85% to achieve CfSH L4. This averages 5.85% from all of the
development scenarios used in that study. For development sensitivity analysis using the same Updated Cost Review document, an allowance has been applied for meeting CfSH Level 5 assuming a a 24% increase to achieve CfSH L5 but that the energy requirement amounts to 63%
of the total additional cost over Part L2010 baseline. This therfore equates to an approximate uplift over Part L 2010 baseline build costs of approximately 15%. We have not built in any assumed reduction in costs over time although in practice it is highly likely extra over costs will
reduce over time.
3
Allowance to achieve Lifetime Homes Standards acknowledged within report as potential variable cost issue (depending on design etc).There have been a number of studies into the costs and benefits of building to the Lifetime Homes standard. These have concluded that the costs
range from £545 to £1615 per dwelling, depending on: the experience of the home designer and builder; the size of the dwelling (it is easier to design larger dwellings that incorporate Lifetime Homes standards cost effectively than smaller ones); whether Lifetime Homes design
criteria were designed into developments from the outset or whether a standard house type is modified (it is more cost effective to incorporate the standards at the design stage rather than modify standard designs); and any analysis of costs is a ‘snapshot' in time. The net cost of
implementing Lifetime Homes will diminish as the concept is more widely adopted and as design standards, and market expectations, rise (www.lifetimehomes.org.uk). Wheelchair accessible housing requirements covered within total design and development costs.
Final June 2013
Appendix I - Development Assumptions
D|S|P Housing and Development Consultants
Spelthorne Borough Council - Community Infrastructure Levy Viability Assessment - Commercial Assumptions Sheet
Values Range - Annual Rents £ per sq m
Use Class / Type
Large Retail (A1)
Large Retail (A1)
Large Retail (A1)
A1- A5 - Small Retail
B1(a) Offices - Town Centre
B1, B2, B8 - Industrial / Warehousing
B1, B2, B8 - Industrial / Warehousing
C1 - Hotel (budget) - 60 rooms
C2 - Residential Institution
Student Housing
Other / Sui Generis
Example Scheme Type
Comparison - town centre
Supermarket - Town centre
Retail warehouse
Convenience retail
Office Building
Distribution
Larger industrial / warehousing unit including offices edge of centre
Hotel - town centre
Nursing home/ care home
100% Cluster type accommodation (200 rooms) ensuite
Variable - tested on values / costs relationship basis
including D1 / D2 clinics / gyms / cinema etc.
Site
Site Size
GIA (m²) Coverage
(Ha)
3000
300%
0.15
2500
40%
0.63
2500
40%
0.63
300
80%
0.04
500
70%
0.07
15000
35%
4.29
Build Period
(Months)**
30
18
12
6
12
18
2500
1800
3000
55%
50%
60%
0.45
0.36
0.50
12
14
16
4600
135%
0.34
18
Low
£250
£220
£100
£110
£70
Mid
Variable
£290
£270
£125
£160
£90
High
£330
£320
£150
£210
£110
£70
£90
£110
£4,000
£5,000
£6,000
£160
£180
£200
£142/week (assuming 38 weeks). Remainder
assumed at 60% occupancy
Build Cost (£
per sq m)*
£1,015
£1,024
£547
£709
£1,330
£508
External
Total Build Cost
works cost
(£/sq m excl
addition (%)
fees etc)
20-50%
Range
20%
£1,229
20%
£656
20%
£851
20%
£1,596
120%
£1,118
Notes:
BCIS - Department Stores
BCIS - Hypermarkets / Supermarkets - generally.
BCIS - Retail warehouses - 1,000 - 7,000 sq m.
BCIS - Shops - Generally
BCIS - Offices - 3-5 stories; airconditioned
BCIS - Purpose built warehouse / store >2,000m²
£835
20%
£1,002
Variable - £1,085 - £1,400/sq. m total
£1,371
20%
£1,645
BCIS - Advance factories / offices - mixed facilities (B1) - >2,000 sq m
BCIS data (specific sites plus specific information).
BCIS - Nursing Homes, convalescent homes, short stay medical homes
£1,428
BCIS - Students' residences, halls of residence, etc.
5%
£1,499
* Convenience stores with sales area of less than 3,000 sq ft (280 sq m), open for long hours.
Development Costs
Professional Fees (% of cost)
Contingencies (% of cost)
Planning / Building Regs etc / insurances (% of cost)
Site survey / preparation costs
Finance Costs
Finance rate p.a. (including over lead-in and letting / sales
period)
Arrangement / other fees (% of cost)
Marketing Costs
Advertising Fees (% of annual income)
Letting Fees (% of annual income)
Purchaser's costs
Developer Profit (% of GDV)
Yields
Site Acquisition Costs
Agents Fees (% of site value)
Legal Fees (% of site value)
Stamp Duty (% of value)
10%
5%
2.0%
Variable
7.0%
2.0%
1%
10%
5.75%
20%
Variable
1.50%
0.75%
0 to 5%
*BCIS Median - Location Factor Spelthorne BC (113); Q3 2012
**BCIS Construction Duration Calculator
DSP Final
June 2013
Appendix I - Development Assumptions