Arnside and Silverdale AONB DPD Viability Study

October 2016

Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Important Notice

HDH Planning & Development Ltd has prepared this report for the sole use of the Lancaster City Council and South Lakeland District Council in accordance with the instructions under which our services were performed. No other warranty, expressed or implied, is made as to the professional advice included in this report or any other services provided by us. This report may not be relied upon by any other party without the prior and express written agreement of HDH Planning & Development Ltd.

Some of the conclusions and recommendations contained in this report are based upon information provided by others (including the Councils and consultees) and upon the assumption that all relevant information has been provided by those parties from whom it has been requested. Information obtained from third parties has not been independently verified by HDH Planning & Development Ltd, unless otherwise stated in the report. The conclusions and recommendations contained in this report are concerned with policy requirement, guidance and regulations which may be subject to change. They reflect a Chartered Surveyor’s perspective and do not reflect or constitute legal advice and the Councils should seek legal advice before implementing any of the recommendations.

No part of this report constitutes a valuation and the report should not be relied on in that regard.

Certain statements made in the report may constitute estimates, projections or other forward-looking statements and even though they are based on reasonable assumptions as of the date of the report, such forward-looking statements by their nature involve risks and uncertainties that could cause actual results to differ materially from the results predicted. HDH Planning & Development Ltd specifically does not guarantee or warrant any estimate or projections contained in this report.

RS Drummond-Hay MRICS ACIH HDH Planning & Development Ltd Clapham Woods Farm Keasden, Nr. Clapham Lancaster. LA2 8ET [email protected] 015242 51831 / 07989 975 977 Registered in England Company Number 08555548

Issued 13th October 2016

THIS DOCUMENT HAS BEEN FORMATTED FOR DOUBLE SIDED PRINTING

COPYRIGHT

© This report is the copyright of HDH Planning & Development Ltd. Any unauthorised reproduction or usage by any person other than the addressee is strictly prohibited.

2 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Tables of Contents

1. Introduction ...... 5 HDH Planning and Development Ltd...... 6 Metric or imperial...... 6 Report Structure ...... 6 2. Viability Testing ...... 9 NPPF Viability Testing ...... 9 CIL Economic Viability Assessment ...... 10 Planning Practice Guidance (PPG) ...... 13 Recent changes to the PPG ...... 15 Summer 2015 Budget ...... 16 Affordable Housing ...... 16 Starter Homes...... 17 Environmental Standards ...... 18 Viability Guidance...... 18 3. Methodology...... 23 Viability Testing – Outline Methodology ...... 23 Limitations of viability testing in the context of the NPPF...... 24 The meaning of ‘competitive return’...... 24 Existing Available Evidence ...... 26 Viability Process ...... 27 Development Types ...... 29 4. Residential Market ...... 31 Residential Market ...... 31 National Trends and the relationship with the wider area...... 32 The Local Market...... 38 Price Assumptions for Financial Appraisals ...... 44 Affordable Housing...... 45 Social Rent...... 47 Affordable Rent ...... 48 Intermediate Products for Sale ...... 50 Grant Funding ...... 51 5. Land Price Assumptions ...... 53 Current and Alternative Use Values ...... 53 6. Development Costs ...... 57 Development Costs ...... 57 Construction costs: baseline costs ...... 57 Construction costs: affordable dwellings ...... 58 Other normal development costs ...... 58 Abnormal development costs and brownfield sites...... 59 Fees ...... 60 Contingencies ...... 60 S106 Contributions and the costs of infrastructure ...... 60 Financial and Other Appraisal Assumptions...... 60 VAT ...... 60 Interest rate ...... 60 Developers’ profit ...... 61 Voids ...... 64 Phasing and timetable ...... 64

3 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Site Acquisition and Disposal Costs ...... 65 Site holding costs and receipts...... 65 Acquisition costs ...... 65 Disposal costs...... 65 7. Policy Requirements ...... 67 8. Modelling ...... 77 9. Residential Appraisals ...... 81 Base Appraisals – full draft policy requirements ...... 82 Varied Affordable Housing Requirements ...... 85 Impact of Starter Homes ...... 87 10. Conclusions...... 91 Cumulative Impact of Policies ...... 91 Starter Homes...... 92 Appendix 1 – Land Registry PPD & EPC Data...... 93 Appendix 2 – Base Appraisals ...... 99

4 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

1. Introduction

1.1 Lancaster City Council (LCC) and South Lakeland District Council (SLDC) (the Councils) are working together to prepare the Arnside and Silverdale Area of Outstanding Natural Beauty (AONB) Development Plan Document (DPD), this is referred to as the AONB DPD. The DPD will include development management policies that relate specifically to the AONB area and allocate development sites.

1.2 The DPD will sit below the two Councils two LCC existing policy framework. In The LCC area the principle policy document is the Local Plan for Lancaster District 2011-2031 Development Management DPD adopted in December 20141. LCC is working towards a new Local Plan. In SLDC the principle policy document is the South Lakeland LDF Core Strategy adopted October 2010, although it is necessary to note that SLDC is working towards a Local Plan Development Management Policies DPD.

1.3 The purpose of this report is to consider the deliverability of the AONB DPD in the context of the National Planning Policy Framework (NPPF) and the Planning Practice Guidance (PPG). It is important to note that both LCC and SLDC plan to meet their Objectively Assessed Need (OAN) for housing outside the AONB and neither will be relying on sites within the AONB when calculating their five year land supply assessments.

1.4 This document sets out the methodology used, the key assumptions adopted, in the context of the adopted and emerging policies and in relation to the potential development sites identified AONB DPD. This will allow the Council to engage with stakeholders, to ensure that the new Plan is effective. In addition, the viability assessment will form part of the evidence base for SLDC to review CIL, and for LCC to further consider whether or not to proceed with CIL.

1.5 This Viability Study contains fresh work, but it also builds on SLDC’s existing evidence2 that has been used to develop the Plan3. This present document takes the general advice forward and builds on those conclusions.

1.6 Deliverability of the Plan is dependent on a range of factors, one of which is viability. This report only considers viability. Outside this report the Councils will consider the need for infrastructure and other practical matters.

1 In LCC some of the policies included in the extant Lancaster District Local Plan Strike-Through Edition, adopted September 2008 and the Core Strategy 2003 to 2012, adopted July 2008 still apply. The current ‘live policies are summarised in Development Management DPD & Morecambe Area Action Plan DPD Strategic Guide to Local Plan Policies dated December 2014. 2 SLDC Land Allocations DPD Viability Study - April 2013, South Lakeland CIL Viability Study, FINAL REPORT, January 2014 South Lakeland District Council CIL Viability Study, Update - July 2014. 3 As set out in Chapter 3 below.

5 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

1.7 It is important to note, at the start of a study of this type, that not all sites will be viable, even without any policy requirements imposed or CIL sought by the Councils. It is inevitable that the Councils’ requirements will render some sites unviable. The question for this report is not whether some development site or other would be rendered unviable, it is whether the delivery of the overall Plan is threatened.

HDH Planning and Development Ltd

1.8 HDH is a firm of Chartered Surveyors and a specialist planning consultancy providing evidence to support planning and housing authorities. The firm’s main areas of expertise are:

a. District wide and site specific viability analysis b. Community Infrastructure Levy testing c. Local and Strategic Housing Market Assessments and Housing Needs Assessments d. Future Housing Numbers Analysis (post RSS target setting) e. Viability and Planning Assessments and Inquiries.

1.9 The findings contained in this report are based upon information from various sources including that provided by the Councils and by others, upon the assumption that all relevant information has been provided. This information has not been independently verified by HDH. The conclusions and recommendations contained in this report are concerned with policy requirements, guidance and regulations which may be subject to change. They reflect a Chartered Surveyor’s perspective and do not reflect or constitute legal advice.

1.10 No part of this report constitutes a valuation and the report should not be relied on in that regard.

Metric or imperial

1.11 The property industry uses both imperial and metric data – often working out costings in metric (£/m2) and values in imperial (£/acre and £/sqft). This is confusing so metric measurements are used throughout this report. The following conversion rates may assist readers.

1m = 3.28ft (3' and 3.37") 1ft = 0.30m 1m2 = 10.76 sqft 1sqft = 0.092903 m² 1.12 A useful broad rule of thumb to convert m2 to sqft is simply to add a final zero.

Report Structure

1.13 This report follows the following format:

Chapter 2 The reasons for, and approach to, viability testing, including a short review of the requirements of the NPPF, PPG and CIL Regulations. Chapter 3 The methodology used.

6 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Chapter 4 An assessment of the housing market, including market and affordable housing with the purpose of establishing the worth of different types of housing (size and tenure). Chapter 5 An assessment of the costs of land to be used when assessing viability. Chapter 6 The cost and general development assumptions to be used in the development appraisals. Chapter 7 A summary of the various policy requirements and constraints that influence the type of development that come forward. Chapter 8 A summary of the range of modelled sites used for the financial development appraisals. Chapter 9 The results of the appraisals and consideration of residential development. Chapter 10 The consideration and conclusions in relation to the deliverability of development.

7 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

8 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2. Viability Testing

2.1 Viability testing is an important part of the Development Plan making process. The requirement to assess viability forms part of the National Planning Policy Framework (NPPF), is part of the Strategic Housing and Employment Land Availability Assessment (SHELAA) process, and is a requirement of the CIL Regulations. In each case the requirement is slightly different but all have much in common.

2.2 In March 2012 the Government published National Planning Practice Guidance (PPG), in the form of a website4. The PPG is a live document that is subject to regular updating and change. It cancels a number of pre-existing guidance documents and contains sections on plan- making, viability and CIL. The PPG does not alter the NPPF.

NPPF Viability Testing

2.3 The NPPF5 introduced a requirement to assess the viability of the delivery of the Local Plan and the impact on development of policies contained within it. The NPPF includes the following requirements (with emphasis added):

173. Pursuing sustainable development requires careful attention to viability and costs in plan - making and decision-taking. Plans should be deliverable. Therefore, the sites and the scale of development identified in the plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened. To ensure viability, 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.

174. Local planning authorities should set out their policy on local standards in the Local Plan, including requirements for affordable housing. They should assess the likely cumulative impacts on development in their area of all existing and proposed local standards, supplementary planning documents and policies that support the development plan, when added to nationally required standards. In order to be appropriate, the cumulative impact of these standards and policies should not put implementation of the plan at serious risk, and should facilitate development throughout the economic cycle. Evidence supporting the assessment should be proportionate, using only appropriate available evidence.

2.4 The duty to test in the NPPF is a ‘broad brush’ one, saying ‘plans should be deliverable’. It is not a requirement that every site should be able to bear all of a local authority’s requirements – indeed there will be some sites that are unviable even with no requirements imposed on them. The typical site should be able to bear whatever target or requirement is set and the Councils should be able to show, with a reasonable degree of confidence, that the Development Plan is deliverable.

4 http://planningguidance.planningportal.gov.uk/ 5 The NPPF was published on 27th March 2012 and the policies within it apply with immediate effect.

9 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2.5 The enabling and delivery of development is a priority of the NPPF. In this regard it says:

47. To boost significantly the supply of housing, local planning authorities should:  use their evidence base to ensure that their Local Plan meets the full, objectively assessed needs for market and affordable housing in the housing market area, as far as is consistent with the policies set out in this Framework, including identifying key sites which are critical to the delivery of the housing strategy over the plan period;  identify and update annually a supply of specific deliverable11 sites sufficient to provide five years’ worth of housing against their housing requirements with an additional buffer of 5% (moved forward from later in the plan period) to ensure choice and competition in the market for land. Where there has been a record of persistent under delivery of housing, local planning authorities should increase the buffer to 20% (moved forward from later in the plan period) to provide a realistic prospect of achieving the planned supply and to ensure choice and competition in the market for land;  identify a supply of specific, developable12 sites or broad locations for growth, for years 6-10 and, where possible, for years 11-15;  for market and affordable housing, illustrate the expected rate of housing delivery through a housing trajectory for the plan period and set out a housing implementation strategy for the full range of housing describing how they will maintain delivery of a five-year supply of housing land to meet their housing target; and  set out their own approach to housing density to reflect local circumstances.

2.6 Footnotes 11 and 12 of the NPPF are important in providing detail saying:

11 To be considered deliverable, sites should be available now, offer a suitable location for development now, and be achievable with a realistic prospect that housing will be delivered on the site within five years and in particular that development of the site is viable. Sites with planning permission should be considered deliverable until permission expires, unless there is clear evidence that schemes will not be implemented within five years, for example they will not be viable, there is no longer a demand for the type of units or sites have long term phasing plans. 12 To be considered developable, sites should be in a suitable location for housing development and there should be a reasonable prospect that the site is available and could be viably developed at the point envisaged.

2.7 Some sites within the area will not be viable. In these cases, developers have scope to make specific submissions at the planning application stage; similarly, some sites will be able to bear considerably more than the policy requirements.

2.8 This study will consider the development viability of the site types that are most likely to come forward under the AONB DPD. This study will specifically examine the development viability of the sites identified in the AONB DPD. It will also consider the smaller sites expected to come forward over the plan period that are not included within the AONB DPD but which would still be subject to the policies within it.

CIL Economic Viability Assessment

2.9 Whilst this study is not considering CIL specifically, it is not possible to consider viability without having regard to the CIL Regulations. The CIL Regulations came into effect in April

10 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2010 and have been subject to several subsequent amendments6. CIL Regulation 14 (as amended) sets out the core principle for setting CIL:

Setting rates (1) In setting rates (including differential rates) in a charging schedule, a charging authority must strike an appropriate balance between— (a) the desirability of funding from CIL (in whole or in part) the actual and expected estimated total cost of infrastructure required to support the development of its area, taking into account other actual and expected sources of funding; and (b) the potential effects (taken as a whole) of the imposition of CIL on the economic viability of development across its area. (2) In setting rates …

2.10 Viability testing in the context of CIL will assess the ‘effects’ on development viability of the imposition of CIL. The financial impact of introducing CIL is an important factor, but the provision of infrastructure (or lack of it) will also have an impact on the ability of the Councils to meet its objectives through development. The Plan may not be deliverable in the absence of CIL.

2.11 The test that will be applied to the proposed rates of CIL are set out in the updated CIL Guidance contained in the PPG, putting greater emphasis on demonstrating how CIL will be used to deliver the infrastructure required to support the Plan:

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 of obligations and policy burdens that their ability to be developed viably is threatened. The same principle applies in Wales. PPG ID: 25-009-20140612

6 SI 2010 No. 948. The Community Infrastructure Levy Regulations 2010 Made 23rd March 2010, Coming into force 6th April 2010. SI 2011 No. 987. The Community Infrastructure Levy (Amendment) Regulations 2011 Made 28th March 2011, Coming into force 6th April 2011. SI 2011 No. 2918. The Local Authorities (Contracting Out of Community Infrastructure Levy Functions) Order 2011. Made 6th December 2011, Coming into force 7th December 2011. SI 2012 No. 2975. The Community Infrastructure Levy (Amendment) Regulations 2012. Made 28th November 2012, Coming into force 29th November 2012. SI 2013 No. 982. The Community Infrastructure Levy (Amendment) Regulations 2013. Made 24th April 2013, Coming into force 25th April 2013. SI 2014 No. 385. The Community Infrastructure Levy (Amendment) Regulations 2013. Made 24th February 2014, Coming into force 24th February 2014. S1 2015 No. 836. COMMUNITY INFRASTRUCTURE LEVY, ENGLAND AND WALES, The Community Infrastructure Levy (Amendment) Regulations 2015. Made 20th March 2015.

11 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2.12 The test is whether the sites and the scale of development identified in the Plan are subject to such a scale of obligations and policy burdens (when considered together) that their ability to be developed viably is threatened by CIL. This is somewhat more cautious than the approach set out in earlier guidance. In the March 2010 CIL Guidance, the test was whether the Plan was put at ‘serious risk’, and in the December 2012 / April 2013 CIL Guidance, the test was whether CIL ‘threatened the development plan as a whole’ – although it is important to note that the CIL Regulation 14 is clear that the purpose of the viability testing is to establish ‘the potential effects (taken as a whole) of the imposition of CIL on the economic viability of development across its area’ rather than specific sites.

2.13 On preparing the evidence base on economic viability, the Guidance says:

A charging authority must use ‘appropriate available evidence’ (as defined in the Planning Act 2008 section 211(7A)) to inform their draft charging schedule. The Government recognises that the available data is unlikely to be fully comprehensive. 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. In addition, 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 (the Local Plan in England, Local Development Plan in Wales, and the London Plan in London )] 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 as part of plan-making. PPG ID: 25-019-20140612

2.14 This study has drawn on the existing available evidence. It reflects the adopted rates of CIL in the SLDC area and it will be necessary for the LCC to consider its finding as and if, in due course they decide to purse CIL. The Councils will also consider other ‘existing available evidence’, the comments of stakeholders and wider priorities.

2.15 From April 2015, councils have been restricted in relation to pooling S106 contributions from more than five developments7 (where the obligation in the s106 agreement / undertaking is a reason for granting consent). This restriction will encourage councils to adopt CIL – particularly where there are large items of infrastructure to be delivered that relate to multiple sites. This restriction on pooling may have the effect of bringing s106 tariff policies to an end.

2.16 Following the implementation of CIL, a council will still be able to raise additional s106 funds for infrastructure, provided this infrastructure can be directly linked to the site-specific needs associated with the scheme in question, and that it is not for infrastructure specifically identified

7 CIL Regulations 123(3)

12 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

to be funded by CIL, through the Regulation 123 List8. Payments requested under the s106 regime must be (as set out in CIL Regulation 122):

a. necessary to make the development acceptable in planning terms; b. directly related to the development; and c. fairly and reasonably related in scale and kind to the development.

2.17 As mentioned above, under CIL Regulation 123, from April 2015, there are restrictions on pooling contributions from five or more sites where the obligation is a reason for granting planning permission. It is important to note that the counting of the ‘five or more sites’ relates to the ‘provision of that project, or type of infrastructure’ and is from the date of the CIL Regulations, being April 2010. The Council will need to consider whether the threshold has already been exceeded for some items of infrastructure.

Planning Practice Guidance (PPG)

2.18 Viability is a recurring theme through the PPG, and it includes specific sections on viability in both the plan making and the development management processes. As set out above, the NPPF says that plans should be deliverable and that the scale of development identified in the Plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened. The PPG says:

Understanding Local Plan viability is critical to the overall assessment of deliverability. Local Plans should present visions for an area in the context of an understanding of local economic conditions and market realities. This should not undermine ambition for high quality design and wider social and environmental benefit but such ambition should be tested against the realistic likelihood of delivery. …. viability can be important where planning obligations or other costs are being introduced. In these cases decisions must be underpinned by an understanding of viability, ensuring realistic decisions are made to support development and promote economic growth. Where the viability of a development is in question, local planning authorities should look to be flexible in applying policy requirements wherever possible. PPG ID: 10-001-20140306

2.19 These requirements are not new and are simply stating best practice and are wholly consistent with the approach taken through the preparation of the Plan. An example is the inclusion of viability testing in relation to the Council’s affordable housing policy.

2.20 In the section on considering land availability, the PPG says:

A site is considered achievable for development where there is a reasonable prospect that the particular type of development will be developed on the site at a particular point in time. This is essentially a

8 This is the list of the items on which a Council will spend CIL.

13 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

judgement about the economic viability of a site, and the capacity of the developer to complete and sell the development over a certain period. PPG ID: 3-021-20140306

2.21 The PPG does not prescribe a single approach for assessing viability. The NPPF and the PPG both set out the policy principles relating to viability assessments. The PPG rightly acknowledges that a ‘range of sector led guidance on viability methodologies in plan making and decision taking is widely available’.

There is no standard answer to questions of viability, nor is there a single approach for assessing viability. The National Planning Policy Framework, informed by this Guidance, sets out the policy principles relating to viability assessment. A range of sector led guidance on viability methodologies in plan making and decision taking is widely available. PPG 10-002-20140306.

2.22 As set out later in this chapter, this study is carried out under the Harman Guidance and is broadly in accordance with the RICS Guidance, it also draws on the Planning Advisory Service (PAS) resources and was informed by appeal decisions and CIL Examiner’s reports.

2.23 The PPG does not require every site to be tested:

Assessing the viability of plans does not require individual testing of every site or assurance that individual sites are viable; site typologies may be used to determine viability at policy level. Assessment of samples of sites may be helpful to support evidence and more detailed assessment may be necessary for particular areas or key sites on which the delivery of the plan relies. PPG ID: 10-006-20140306

2.24 This supports the approach where the analysis is based on a set of typologies that represent the development expected to come forward over the plan-period. The typologies used in this assessment were tested through the consultation process and the methodology is fully consistent with the PPG.

2.25 Viability Thresholds are a controversial matter and it is clear that different landowners will take different approaches depending on their personal and corporate priorities. The assessment is based on an informed assumption being made about the ‘uplift’ being the margin above the ‘Existing Use Value’ which would be sufficient to incentivise the landowner to sell. Both the RICS Guidance and the PPG make it clear that when considering land value this must be done in the context of current and emerging policies:

Site Value definition Site Value either as an input into a scheme specific appraisal or as a benchmark is defined in the guidance note as follows: ‘Site Value should equate to the market value subject to the following assumption: that the value has regard to development plan policies and all other material planning considerations and disregards that which is contrary to the development plan.’ Box 7, Page 12, RICS Guidance In all cases, estimated land or site value should: …reflect emerging policy requirements and planning obligations and, where applicable, any Community Infrastructure Levy charge;… PPG ID 10-014-20140306

2.26 This supports the approach taken where the process is informed by past land transactions as well as considering an appropriate uplift.

14 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2.27 The PPG stresses the importance of working from evidence and in collaboration with the development industry:

Evidence based judgement: assessing viability requires judgements which are informed by the relevant available facts. It requires a realistic understanding of the costs and the value of development in the local area and an understanding of the operation of the market. Understanding past performance, such as in relation to build rates and the scale of historic planning obligations can be a useful start. Direct engagement with the development sector may be helpful in accessing evidence. Collaboration: a collaborative approach involving the local planning authority, business community, developers, landowners and other interested parties will improve understanding of deliverability and viability. Transparency of evidence is encouraged wherever possible. Where communities are preparing a neighbourhood plan (or Neighbourhood Development Order), local planning authorities are encouraged to share evidence to ensure that local viability assumptions are clearly understood.

2.28 The meaning of competitive returns is discussed in the Chapter 6 below and is at the core of a viability assessment. The RICS Guidance (see below) includes the following definition:

Competitive returns - A term used in paragraph 173 of the NPPF and applied to ‘a willing land owner and willing developer to enable development to be deliverable’. A ‘Competitive Return’ in the context of land and/or premises equates to the Site Value as defined by this guidance, i.e. the Market Value subject to the following assumption: that the value has regard to development plan policies and all other material planning considerations and disregards that which is contrary to the development plan. A ‘Competitive Return’ in the context of a developer bringing forward development should be in accordance with a ‘market risk adjusted return’ to the developer, as defined in this guidance, in viably delivering a project. RICS Guidance, Financial viability in Planning, Page 43

2.29 The PPG now adds to this saying:

The National Planning Policy Framework states that viability should consider “competitive returns to a willing landowner and willing developer to enable the development to be deliverable.” This return will vary significantly between projects to reflect the size and risk profile of the development and the risks to the project. A rigid approach to assumed profit levels should be avoided and comparable schemes or data sources reflected wherever possible. A competitive return for the land owner is the price at which a reasonable land owner would be willing to sell their land for the development. The price will need to provide an incentive for the land owner to sell in comparison with the other options available. Those options may include the current use value of the land or its value for a realistic alternative use that complies with planning policy. PPG ID: 10-015-20140306.

Recent changes to the PPG

2.30 On the 28th November 2014, a written statement to Parliament, headed, Small-scale developers, by Brandon Lewis MP of Department for Communities and Local Government, introduced a national threshold for affordable housing and developer contributions. Contributions should not be sought from developments of 10-units or fewer, and which have a maximum combined gross floor space of 1,000 square metres. In Designated Rural Areas under section 157 of the Housing Act 1985, (which includes National Parks and Areas of Outstanding Natural Beauty), authorities may choose to implement a lower threshold of 5- units, beneath which affordable housing and tariff style contributions should not be sought. Within these designated areas, if the 5-unit threshold is implemented, then payment of

15 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

affordable housing and tariff style contributions on developments of between 6 to 10 units should also be sought as a cash payment only and be commuted until after completion of units within the development.

2.31 Since then, on the 1st August 2015, the changes were reversed (as a result of a legal challenge) and the PPG was amended and a new paragraph (paragraph 30) was added as follows9:

Please note that paragraphs 012-023 of the guidance on planning obligations will be removed following the judgment in R (on the application of West Berkshire District Council and Reading Borough Council) v Secretary of State for Communities and Local Government [2015] EWHC 2222 (Admin).

2.32 The Government appealed10 and the national thresholds were reintroduced in May 2016. These will apply to future development in the AONB and have been incorporated into the base appraisals.

Summer 2015 Budget

2.33 On the 8th July 2015, the Chancellor of the Exchequer gave his post-election Summer Budget to Parliament. With the Budget a number of changes were announced that relate to planning.

Affordable Housing

2.34 Prior to the Budget Affordable Rents were set at up to 80% of open market rent and then generally went up by up to 1% over inflation (CPI) each year and Social Rents were set through a formula, again with an up to 1% over inflation uplift. These provisions were to prevail, under arrangements announced in 2013, until 2023 and have formed the basis of many housing associations’ and other providers’ business plans. The result was that housing associations knew their rents would go up and those people and organisations who invest in such properties (directly or indirectly) knew that the rents were going up year on year. This made them attractive as each year the rent would always be a little larger relative to inflation.

2.35 In the Budget it was announced that social and affordable rents would be reduced by 1% per year for 4 years – although it is thought (albeit at the date of this report there remains some uncertainty) that the mechanism for setting new rents on new lets would not change. The objective of these changes was to reduce the cost to the Exchequer of the housing elements (such as Local Housing Allowance, Housing Benefit and the housing elements of Universal Credit) of the social security budget.

2.36 It is likely that this change will reduce the value of affordable housing. The impact on councils will depend largely on the amount and nature of affordable housing. Those with high

9 http://planningguidance.planningportal.gov.uk/revisions/23b/030/ 10 Secretary of State for Communities and Local Government v (1) West Berkshire District Council & (2) Reading Borough Council. Court of Appeal 11th May 2016 [2016] EWCA Civ 441. Case No: C1/2015/2559.

16 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

affordable housing requirements will see a larger impact (as it makes up a larger proportion of a development). This is considered this further in Chapter 4 below.

Starter Homes

2.37 The Budget included the following statement11:

Starter Homes – 58,000 people have already signed up to show their interest in owning one of these new homes – exclusively for first time buyers under 40, at a 20% discount. 200,000 of these new homes will be built over the next 5 years. And to deliver this, the government is today announcing that every reasonable sized housing site must include starter homes – and a new duty will be placed on councils to make sure they include starter homes in their future housing plans for their area

2.38 The Planning and Housing Act (2016) provides some further information:

(1) In this Chapter “starter home” means a building or part of a building that— (a)is a new dwelling, (b)is available for purchase by qualifying first-time buyers only, (c)is to be sold at a discount of at least 20% of the market value, (d)is to be sold for less than the price cap, and (e)is subject to any restrictions on sale or letting specified in regulations made by the Secretary of State. (2) “New dwelling” means a building or part of a building that— (a)has been constructed for use as a single dwelling and has not previously been occupied, or (b)has been adapted for use as a single dwelling and has not been occupied since its adaptation. (3) “Qualifying first-time buyer” means an individual who— (a)is a first-time buyer, (b) is at least 23 years old but has not yet reached the age of 40, and (c) meets any other criteria specified in regulations made by the Secretary of State (for example, relating to nationality).

2.39 The initial ‘cap’ is to be £250,000 outside London.

2.40 The PPG has not been updated since the Budget, and, at the time of this update, the Starter Homes sections of the PPG12 only relate to ‘exception’ sites. Particular uncertainty remains around whether or not Starter Homes are in addition to, or instead of, some or all of the affordable housing.

11 https://www.gov.uk/government/news/pm-and-chancellor-announce-one-nation-plans-to-spread- homeownership-across-the-country 12 From PPG Paragraph: 001 Reference ID: 55-001-20150318

17 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2.41 A Starter Home will have to remain available at 20 per cent below market value for the first five years – meaning any first-time buyer who looks to resell within the first five years will have to offer this discount to the next first time buyer.

2.42 As currently drafted, Starter Homes are not subject to CIL. It will be necessary to keep this under review.

2.43 On 23rd March 2016 the Government launched Starter Homes Regulations: Technical Consultation (over the period to 18th May 2016). This sets out the Government’s preferred options as to what the requirements will be. A scenario has been tested whereby 20% of the housing on sites of 11 or more units are delivered as Starter Homes. The Consultation is unclear as to whether Starter Homes would be ‘as well as’ or ‘instead of’ affordable housing required under a council’s policy. It is assumed that the Starter Homes will be instead of the equivalent amount of affordable housing.

Environmental Standards

2.44 The Government also confirmed within the Fixing the foundations productivity report13 its intention not to proceed with the zero carbon buildings policy, which was initially announced in 2007.

… repeat its successful target from the previous Parliament to reduce net regulation on housebuilders. The government does not intend to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards, but will keep energy efficiency standards under review, recognising that existing measures to increase energy efficiency of new buildings should be allowed time to become established

2.45 As a result, there will be no uplift to Part L of the Building Regulations during 2016 and both the 2016 zero carbon homes target and the 2019 target for non-domestic zero carbon buildings will be dropped, including the Allowable Solutions programme. This is considered in Chapter 7 below.

Viability Guidance

2.46 There is no specific technical guidance on how to test the viability in the CIL Regulations or Guidance. Paragraph 173 of the NPPF says: ‘…… To ensure viability, 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……’ This seems quite straightforward – although ‘competitive returns’ is not defined.

13 https://www.gov.uk/government/publications/fixing-the-foundations-creating-a-more-prosperous-nation

18 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2.47 There are several sources of guidance and appeal decisions 14 that support the methodology HDH have developed. In this study Viability Testing in Local Plans – Advice for planning practitioners (LGA/HBF – Sir John Harman) June 201215 (known as the Harman Guidance) has been followed. This contains the following definition:

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. If these conditions are not met, a scheme will not be delivered.

2.48 The planning appeal decisions, and the HCA good practice publication suggest that the most appropriate test of viability for planning policy purposes is to consider the Residual Value of schemes compared with the Existing Use Value (EUV), plus a premium. The premium over and above the EUV being set at a level to provide the landowner with a competitive return and the inducement to sell. The Harman Guidance and Financial viability in planning, RICS guidance note, 1st edition (GN 94/2012) which was published during August 2012 (known as the RICS Guidance) set out the principles of viability testing. Additionally, the Planning Advisory Service (PAS)16 provides viability guidance and manuals for local authorities.

14 Barnet: APP/Q5300/ A/07/2043798/NWF, Bristol: APP/P0119/ A/08/2069226, Beckenham: APP/G5180/ A/08/2084559, Bishops Cleeve; APP/G1630/A/11/2146206 Burgess Farm: APP/U4230/A/11/2157433, CLAY FARM: APP/Q0505/A/09/2103599/NWF, Woodstock: APP/D3125/ A/09/2104658, Shinfield APP/X0360/ A/12/2179141, Oxenholme Road, APP/M0933/A/13/2193338 Vannes: Court of Appeal 22 April 2010, [2010] EWHC 1092 (Admin) 2010 WL 1608437 15 Viability Testing in Local Plans has been endorsed by the Local Government Association and forms the basis of advice given by the CLG funded, Planning Advisory Service (PAS). 16 PAS is funded directly by DCLG to provide consultancy and peer support, learning events and online resources to help local authorities understand and respond to planning reform . (Note: Much of the most recent advice has been co-authored by HDH).

19 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

2.49 There is considerable common ground between the RICS and the Harman Guidance but they are not consistent. The RICS Guidance recommends against the ‘current/alternative use value plus a margin’ – which is the methodology recommended in the Harman Guidance.

One approach has been to exclusively adopt current use value (CUV) plus a margin or a variant of this, i.e. existing use value (EUV) plus a premium. The problem with this singular approach is that it does not reflect the workings of the market as land is not released at CUV or CUV plus a margin (EUV plus).…. Financial viability in planning, RICS guidance note, 1st edition (GN 94/2012)

2.50 The Harman Guidance advocates an approach based on Threshold Land Value. Viability Testing in Local Plans says:

Consideration of an appropriate Threshold Land Value needs to take account of the fact that future plan policy requirements will have an impact on land values and landowner expectations. Therefore, using a market value approach as the starting point carries the risk of building-in assumptions of current policy costs rather than helping to inform the potential for future policy. Reference to market values can still provide a useful ‘sense check’ on the threshold values that are being used in the model (making use of cost-effective sources of local information), but it is not recommended that these are used as the basis for the input to a model. We recommend that the Threshold Land Value is based on a premium over current use values and credible alternative use values (noting the exceptions below). Viability Testing in Local Plans – Advice for planning practitioners. (June 2012)

2.51 The RICS dismisses a Threshold Land Value approach as follows:

Threshold land value. A term developed by the Homes and Communities Agency (HCA) being essentially a land value at or above that which it is assumed a landowner would be prepared to sell. It is not a recognised valuation definition or approach.

2.52 On face value these statements are contradictory. In order to avoid later disputes and delays, the approach taken in this study brings these two sources of guidance together. The methodology adopted is to compare the Residual Value generated by the viability appraisals, with the Existing Use Value (EUV) or an Alternative Use Value (AUV) plus an appropriate uplift to incentivise a landowner to sell. The amount of the uplift over and above the existing use value is central to the assessment of viability. It must be set at a level to provide ‘competitive returns’17 to the landowner.

2.53 This approach is in line with that recommended in the Harman Guidance (as endorsed by LGA, PAS) – and also broadly in line with the main thrust of the RICS Guidance of having reference to market value. It is relevant to note that the Harman methodology was endorsed by the Planning Inspector who approved the London Mayoral CIL Charging Schedule in

17 As required by 173 of the NPPF

20 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

January 201218. In his report, the Inspector dismissed the theory that using historical market value (i.e. as proposed by the RICS) to assess the value of land was a more appropriate methodology than using EUV plus a margin.

18 Paragraphs 7 to 9 of REPORT ON THE EXAMINATION OF THE DRAFT MAYORAL COMMUNITY INFRASTRUCTURE LEVY CHARGING SCHEDULE by Keith Holland BA (Hons) DipTP MR TPI ARICS an Examiner appointed by the Mayor Date: 27th January 2012

21 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

22 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

3. Methodology

Viability Testing – Outline Methodology

3.1 There is no statutory technical guidance on how to go about viability testing. As in the earlier work carried out for SLDC the Harman Guidance has been used. The availability and cost of land are matters at the core of viability for any property development. The format of the typical valuation is:

Gross Development Value (The combined value of the complete development)

LESS

Cost of creating the asset, including a profit margin (Construction + fees + finance charges)

=

RESIDUAL VALUE

3.2 The result of the calculation indicates a land value, the Residual Value. The Residual Value is the top limit of what a developer could offer for a site and still make a satisfactory profit margin.

3.3 In the following graphic, the bar illustrates all the income from a scheme. This is set by the market (rather than by the developer or local authority) so is, to a large extent, fixed. The developer has relatively little control over the costs of development (construction and fees) and whilst there is scope to build to different standards and with different levels of efficiency the costs are largely out of the developer’s direct control – they are what they are depending on the development.

23 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

3.4 It is well recognised in viability testing that the developer should be rewarded for taking the risks of development. The NPPF terms this the ‘competitive return’. The essential balance in viability testing is around the land value and whether or not land will come forward for development. The more policy requirements and developer contributions the planning authority asks for the less the developer can afford to pay for the land. The purpose of this study is to quantify the costs of the Council’s various policies on development and to assess the effect of these and of CIL and then make a judgement as to whether or not land prices are squeezed to such an extent that, in the NPPF context, the Development Plan is put at ‘serious risk’ or in the context of the CIL Guidance, whether development is ‘threatened’ to such an extent that the Plan is not delivered.

3.5 The ‘likely land value’ is a difficult topic since a landowner is unlikely to be entirely frank about the price that would be acceptable, always seeking a higher one. This is one of the areas where an informed assumption has to be made about the ‘uplift’: the margin above the ‘existing use value’ which would make the landowner sell. Both the RICS Guidance and the PPG make it clear that when considering land value, this must be done in the context of current and emerging policies:

3.6 It is important to note that this study is not trying to exactly mirror any particular developer’s business model – rather it is making a broad assessment of viability in the context of plan- making and the requirements of the NPPF and CIL Regulations.

Limitations of viability testing in the context of the NPPF

3.7 The high level and broad brush viability testing that is appropriate to be used to assess the effect of CIL does have limitations. The assessment of viability is a largely quantitative process based on financial appraisals – there are however types of development where viability is not at the forefront of the developer’s mind and they will proceed even if a ‘loss’ is shown in a conventional appraisal. By way of example, an individual may want to fulfil a dream of building a house and may spend more than the finished home is actually worth, a community may extend a village hall even though the value of the facility in financial terms is not significantly enhanced or the end user of an industrial or logistics building may build a new factory or depot that will improve its operational efficiency even if, as a property development, the resulting building may not seem to be viable.

3.8 This sets the Council a challenge when considering its proposals. It is clear that some development comes forward for operational reasons, rather than property development purposes.

The meaning of ‘competitive return’

3.9 The meaning of ‘competitive return’ is at the core of a viability assessment. The RICS Guidance includes the following definition:

Competitive returns - A term used in paragraph 173 of the NPPF and applied to ‘a willing land owner and willing developer to enable development to be deliverable’. A ‘Competitive Return’ in the context of land and/or premises equates to the Site Value as defined by this guidance, i.e. the Market Value

24 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

subject to the following assumption: that the value has regard to development plan policies and all other material planning considerations and disregards that which is contrary to the development plan. A ‘Competitive Return’ in the context of a developer bringing forward development should be in accordance with a ‘market risk adjusted return’ to the developer, as defined in this guidance, in viably delivering a project.

3.10 Whilst this is useful it does not provide guidance as to the size of that return. To date there has been much discussion within the industry as to what may and may not be a competitive return, as yet the term has not been given a firm definition through the appeal, planning examination or legal processes.

3.11 Competitive return was considered at the Shinfield Appeal (January 2013)19. This is discussed this further in Chapter 5 below. Clarification has been added in the Oxenholme Road Appeal (October 2013)20 where the inspector confirmed that the methodology set out in Shinfield is very site specific and should only be given limited weight.

3.12 It should be noted that this study is about the economics of development. Viability brings in a wider range than just financial factors. The PPG says:

Understanding Local Plan viability is critical to the overall assessment of deliverability. Local Plans should present visions for an area in the context of an understanding of local economic conditions and market realities. This should not undermine ambition for high quality design and wider social and environmental benefit but such ambition should be tested against the realistic likelihood of delivery.

3.13 The following graphic is taken from the Harman Guidance and illustrates some of the non- financial as well as financial factors that contribute to the assessment process. Viability is an important factor in the plan making process but it is one of many factors.

19 APP/X0360/A/12/2179141 (Land at The Manor, Shinfield, Reading RG2 9BX) 20 APP/M0933/ A/13/ 2193338 (Land to the west of Oxenholme Road, Kendal, Cumbria)

25 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

3.14 The above methodology and in particular the differences between the Harman Guidance and the RICS Guidance were presented and discussed through the consultation process. There was a consensus that it was an appropriate approach.

Existing Available Evidence

3.15 The NPPF, the PPG, the CIL Regulations and CIL Guidance are clear that the viability assessment, wherever possible be based on existing available evidence rather than new evidence. The existing available evidence falls into three broad types:

3.16 The first is that which has been prepared by the Council to inform the emerging Plan and previous plans:

a) SLDC Land Allocations DPD Viability Study – HDH, April 2013 b) South Lakeland CIL Viability Study, FINAL REPORT – HDH, January 2014 c) South Lakeland District Council CIL Viability Study, Update – HDH, July 2014. d) Lancaster City Council, Community Infrastructure Levy –Economic Viability Assessment, GVA, September 2012.

3.17 Secondly is that which the Councils hold, in the form of development appraisals that have been submitted by developers in connection with specific developments – most often to support negotiations around the provision of affordable housing or s106 contributions. This has been drawn on.

3.18 Thirdly, the Councils also hold evidence of what is being collected from developers under the s106 regime. This is being collected outside this study but will be drawn on when considering the deliverability of development.

26 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

3.19 It is important to note that the SLDC evidence was subject to examination through the Land Allocation examination process and then through the CIL examination process. Whilst some time has passed it is clear that it makes an appropriate starting point for this study.

Viability Process

3.20 The assessment of viability as required under the NPPF and the CIL Regulations is not done using a set formula or calculation. It is a quantitative and qualitative process. The NPPF requires that ‘the sites and the scale of development identified in the plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened21’ and whether ‘the cumulative impact of these standards and policies should not put implementation of the plan at serious risk22’. The CIL Regulations require that ‘councils must strike an appropriate balance between (a) the desirability of funding from CIL (in whole or in part) the actual and expected estimated total cost of infrastructure required to support the development of its area, taking into account other actual and expected sources of funding; and (b) the potential effects (taken as a whole) of the imposition of CIL on the economic viability23’.

3.21 The basic viability methodology is summarised in the figure below. It involves preparing financial development appraisals for each of the sites in the Plan, and using these to assess whether development, generally, is viable. The sites were modelled based on discussions with Council officers, the existing available evidence supplied to us by the Councils, and on our own experience of development. Details of the site modelling are set out in Chapter 9. This process ensures that the appraisals are representative of typical development within the AONB over the plan-period.

21 NPPF Paragraph 173 22 NPPF Paragraph 174 23 CIL Regulation 14 (with deletions as per the February 2014 amendments).

27 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Figure 3.1 Viability Methodology

LOCAL MARKET SHORT LIST ASSUMPTIONS FOR SURVEY & DATA SURVEY LOCAL SITES AFFORDABLE & S106 DEVELOPMENT PATTERNS

SELECT ACTUAL SITES BUILT FORM FOR EACH SITE

LAND VALUES MARKET AFFORDABLE PRICES PRICES & BUILD OTHER VALUES COSTS FOR TECHNICAL EACH SITE ASSUMPTION S

ALTERNATIVE PREPARE MODELLED USE VALUES APPRAISALS FOR EACH SITE

ITERATE FOR OTHER AFFORDABLE OPTIONS

IS THE SCHEME VIABLE?

Source: HDH 2016

3.22 The local housing market has been surveyed, in order to obtain a picture of sales values. Land values have also been considered to calibrate the appraisals and to assess existing and alternative use values. Local development patterns have been considered, in order to arrive at appropriate built form assumptions for those sites where information from a current planning permission or application was not available. These in turn informed the appropriate build cost figures. A number of other technical assumptions were required before appraisals could be produced. The appraisal results were in the form of £/ha ‘residual’ land values, showing the maximum value a developer could pay for the site and still return a target profit level. The Residual Value was compared to the Existing Use Value (EUV) for each site. Only if the Residual Value exceeded the EUV, and by a satisfactory margin, could the scheme be judged to be viable

3.23 The appraisals are based on the policies set out in the emerging Plan (a full ‘policy on’ scenario). For appropriate sensitivity testing a range of scenarios have been tested, including different levels of affordable housing provision and different levels of developer contributions.

3.24 It is important to note that should the Councils develop further policies over and above those tested in this study, that it may be necessary to revisit viability and consider the impact of those further requirements.

28 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

3.25 A bespoke viability testing model designed and developed by HDH specifically for area wide viability testing as required by the NPPF and CIL Regulations 24 has been used. The purpose of the viability model and testing is not to exactly mirror any particular business model used by those companies, organisations or people involved in property development. The purpose is to capture the generality and to provide high level advice to assist the Councils in assessing the deliverability of the AONB DPD.

Development Types

3.26 The modelling in this study was based on the types of development most likely to come forward on the sites within the Plan. The modelling is set out in Chapter 8. The work in this study is proportionate to allowing a judgement be made as to whether the cumulative impact of the policies put the Plan at serious risk.

24 This Viability Model is used as the basis for the Planning Advisory Service (PAS) Viability Workshops. It is made available to Local Authorities, free of charge, by PAS and has been widely used by Councils across England (and, to a lesser extent, Wales).

29 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

30 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4. Residential Market

4.1 This chapter sets out an assessment of the housing market, providing the basis for the assumptions on house prices to be used in the financial appraisals for the sites tested in the study.

4.2 Although development schemes do have similarities, every scheme is unique, even schemes on neighbouring sites. Market conditions will broadly reflect a combination of national economic circumstances, and local supply and demand factors, however, even within a town there will be particular localities, and ultimately site specific factors, that generate different values and costs.

Residential Market

4.3 The AONB covers 75 km2 and has a population of around 7,800 and is shown in the following map:

Figure 4.1 Map of the AONB

Source: LCC and SLDC

31 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4.4 The main settlements are Arnside (population 2,334), Warton (1,805), Silverdale (1,326) and Storth/Sandside (978). Around 2,800 people work within the AONB.

4.5 The largest single employer is the Billerud Paper Mill in Beetham. Other important sectors are land management, education, health, accommodation, food and drink, tourism and construction.

4.6 Arnside and Silverdale are the main service centres within the AONB. The area has close links to Carnforth, Lancaster, Kendal and Milnthorpe for employment and for services such as supermarkets and secondary education. Many people living in the AONB work and use services further afield.

4.7 There is no doubt that the AONB is a highly attractive area that has high house prices when compared with other areas in the northwest.

National Trends and the relationship with the wider area

4.8 This update is being completed in the immediate aftermath of the United Kingdom referendum to leave or to remain in the European Union. The result was a vote to leave the EU. It is not yet possible to predict the impact of leaving the EU, beyond the fact that the UK and the UK economy is in a period of significant uncertainty. Negotiations around the details of the exit have not started so the future of trade with the EU and wider world are not yet known.

4.9 A range of views as to the impact on house prices have been expressed that cover nearly the whole spectrum of possibilities. Bearing in mind the area’s housing market’s long term stability as illustrated in the graph below (the 2007 crash was less in SLDC and LCC than much of the rest of the UK and recovery has been less pronounced) it is relatively unlikely that any extreme market reactions that may be seen in the southeast of England would be seen in South Lakeland and the Lancaster areas.

4.10 The following table taken from The Sunday Times (Page 12, Property Section, 3rd July 2016) summarises a range of current views:

32 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Are we in for a small slowdown, or a rapid collapse of the THE EXPERTS SAY… property market? Leading estate agents, analysts and investment firms give their outlook on how house prices may be affected by Britain's decision to leave the EU SOURCE PRE-BREXIT POST-BREXIT PREDICTION VIEW FOR 2016 HOME T RA C K Up 7% in main Similar shocks have cut sales by 20%."Im mediate impact is Property data cities likely to be a fall in turnover and rapid decelerati on in price consultancy growth,'' says Richard Donnell, Insight director. SAVILLS High-end Up 5% According to Lucian Cook, head of research: "The short-term estate agency market will be limited to needs-bas ed buyers and opportunis tic investors. We'd expect a low transaction market." HENRY PRYOR Up 2% Prices down 10% by Christmas. "With prices up 10% annually we Housing market can afford a modest fall. But a sales slowdown could be extremely analyst painful." JLL Property Up 5% "We expect an immediate slowdown in transactions, of the order of consulta ncy 10%-15%, resulting in downward pressure on prices for at least a couple of years. Current activity levels will return, but this is unlikely before late in 2018," says Adam Challis, head of residential research. NATIO N A L N/A Small price falls. UK homes would cost on average £278,500 by ASSOCIATION OF late 2016 if we had stayed in, but will now be £1,000 less. Next ESTATE AGENTS year they would have been £290,800, but after the leave vote will now be £288,900 COUNTRYWIDE Up 4.5% Chief economist Fionnual a Earley says: "There are risks but Britain's biggest people will still move. The Bank of England is unlikely to raise estate-agency group rates rapidly even if there's a rise in inflation." STRUTT & PARKER Up 5%(Prime There will be a huge amount of disruption to the markets while High-end estate London static) everybody takes stock,'' warns Andy Martin, senior partner agency ZOOP L A Online Up 5% The portal says the current average price of £297,000 could property portal fall some £53,000 - with Brexlt wiping £1.5 trillion off the total UK housing stock. ASSE T Z Property Up 5% "The centre of London may see sharp reversals," warns chief investment firm executive Stuart Law - the rest of the UK will see price rises of 4% in 2016 KPMG Business N/A Prices down 5% UK-wide, more in London. consultancy BANK OF AME RIC A N/A London to see 10% price correction in the next 12 months. MERRILL LYNCH KNIG HT FRANK Up 4.2% Look out for mortgage lenders increasing rates - to curb High-end estate lending - even if the base rate is cut. " The Brexit vote will agency generate a period of renewed uncertainty in prime London," warns Liam Bailey, global head of research Source: Sunday Times, 3rd July 2016

4.11 It is not the purpose of this report to attempt to predict the direction of the housing market so it is our firm recommendation that the Councils continue to monitor the market and be prepared to review policies if there is a significant change in viability (up or down).

4.12 Having said this, the current direction and state of the housing market has improved markedly since the earlier viability reports were prepared. The housing market peaked late in 2007 (see the following graph) and then fell considerably in the 2007/2008 recession during what became known as the ‘Credit Crunch’.

33 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4.13 Average house prices across England and Wales have recovered to their pre-recession peak, however this is strongly influenced by London. Prices in London are now well in excess of the 2007/2008 peak but, as can be seen in the figure below, the recovery has been less strong in the two Council areas within which the Arnside & Silverdale AONB falls.

Figure 4.2 Average House Prices (£)

£500,000 £450,000 £400,000 £350,000 £300,000 £250,000 £200,000 £150,000 £100,000 £50,000

£0

2006-01 2006-05 2008-01 2008-05 2008-09 2009-01 2010-09 2011-01 2011-05 2013-05 2013-09 2014-01 2016-01 2016-05 2006-09 2007-01 2007-05 2007-09 2009-05 2009-09 2010-01 2010-05 2011-09 2012-01 2012-05 2012-09 2013-01 2014-05 2014-09 2015-01 2015-05 2015-09

England and Wales South Lakeland Lancaster District London

Source: Land Registry (April 2016)

4.14 Up to the pre-recession peak of the market, the long term rise in house prices had, at least in part, been enabled by the ready availability of credit to home buyers. Prior to the increase in prices, mortgages were largely funded by the banks and building societies through deposits taken from savers. During a process that became common in the 1990s, but took off in the early part of the 21st Century, many financial institutions changed their business model whereby, rather than lending money to mortgagees that they had collected through deposits, they entered into complex financial instruments and engineering through which, amongst other things, they borrowed money in the international markets, to then lend on at a margin or profit. They also ‘sold’ portfolios of mortgages that they had granted. These portfolios also became the basis of complex financial instruments (mortgage backed securities and derivatives etc.).

4.15 During 2007 and 2008, it became clear that some financial institutions were unsustainable, as the flow of money for them to borrow was not certain. As a result, several failed and had to be rescued. This was an international problem that affected countries across the world – but most particularly in North America and Europe. In the UK the high profile institutions that were rescued included Royal Bank of Scotland, HBoS, Northern Rock and Bradford and Bingley. The ramifications of the recession were an immediate and significant fall in house prices, and a complete reassessment of mortgage lending with financial organisations becoming averse to taking risks, lending only to borrowers who had the least risk of default and those with large deposits.

4.16 It is important to note that at the time of this report (Autumn 2016) the housing market is actively supported by the current Government with about one third of mortgages being

34 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

provided through a state backed entity or scheme (a publicly controlled financial institution or assisted purchase scheme such as shared ownership).

4.17 There are various commentators talking about a recovery in house prices.

4.18 There has been considerable coverage in the national press.

The February 2016 RICS Residential Market Survey results show a continued pick up (albeit gradual) in the number of properties coming onto the market, alongside a further increase in sales activity. Nonetheless, with market conditions still tight, house price growth retains a considerable amount of momentum for the time being. Indeed, the national RICS price gauge inched up during February, with a net balance of +50% more surveyors reporting a rise in prices (rather than a fall). The headline price balance has now remained in the narrow range of +48% to +50% in each of the past five months. This indicator is therefore still consistent with house price inflation gathering pace (on the ONS measure) over the coming months. That said, the new enquiries less new instructions indicator, which has a longer lead over hard data, suggests price momentum may then begin to fade towards the latter stages of 2016…. Looking ahead, prices are expected to continue rising across the UK as a whole, even if the strength of projections has just started to moderate at both the three and twelve month horizons. In London, near term price expectations turned negative for the first time in twelve months although, again, much of this decline is concentrated in central parts of the capital. Notwithstanding this, contributors are still pencilling in average annual growth in overall London house prices of close to 4.5% over the next five years. This is broadly in line with the national average. After gathering pace immediately following the announcement of an additional 3% stamp duty surcharge on buy-to-let properties and second homes (coming into effect April), buyer demand continued to rise at the headline level. This marks the eleventh consecutive month in which new buyer enquiries have increased. What’s more, demand growth has now outstripped that of supply in thirteen successive reports (in net balance terms). Nevertheless, new instructions to sell have begun to rise modestly with the headline series indicating fresh listings have increased in each of the past three months. On the back of the improving supply and demand flow, newly agreed sales rose firmly on a UK -wide basis. Moreover, the rate of growth equalled the strongest reported since April 2014. Within this, the South West continues to see the sharpest growth in transaction volumes, in keeping with the findings of the last three surveys. Going forward, sales are anticipated to rise to a greater or lesser degree across the vast majority of the UK over the next twelve months. London is an exception to this, where sales are projected to hold broadly stable. Anecdotal evidence suggests tax changes, concerns over Brexit and global economic uncertainty are all taking their toll on buyer sentiment in the capital. Across the UK as a whole, 59% of respondents perceive current market prices to be around fair value currently. This represents a slight fall relative to the 64% who took this view s ix months ago. London and the South East continue to demonstrate the highest proportion of contributors sensing their local market to be overpriced to some extent. In total, 67% of London respondents now believe valuations are stretched relative to fundamentals, a steady increase from the 54% who were of this opinion six months ago. In the South East, 56% of the survey sample feel residential property is expensive to some extent, only a marginal pick up from 54% back in August 2015. In the lettings market, demand from tenants rose robustly once again, the fourteenth straight month in which demand has increased. Meanwhile, new landlord instructions picked up modestly, the first time a positive reading for this series has been posted since back in October. Unsurprisingly, rent expectations point to significant rental growth persisting in the near term and over the year ahead. Further out, respondents expect rents to rise by approximately 4.5%, per annum, over the next five years.

4.19 The most recent RICS report suggests the following impact of Brexit:

35 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Our monthly Residential Market Surveys indicate a chronic shortage of housing across the UK. The long-standing, disparity between supply and demand is a major factor in increased house prices and rents in key locations (such as London and the south east). Like other sectors we have considered, residential investment transactions in the residential sector have slowed. It has also limited house buying transactions across the house price spectrum, but this is outcome is not unexpected. Before any national poll there is usually a slowing of residential transactions; potential home buyers generally delay their decisions to purchase a home and investors stall on completing financial commitments. After an election vote we typically see the residential sector recover and ‘bounce back’ as stability and confidence returns. However, the outcome of Brexit could provide an alternate effect. The ‘no’ result of the Scottish referendum saw a housing transactions recover in the immediacy, as highlighted by Knight Frank, and we would expect the UK to follow suit should the electorate vote to remain an EU member. Should the UK opt for a Brexit, we could assume that uncertainty could linger whilst the UK Government negotiates new trade deals and relationships with the EU and third countries. The lower to middle priced property market is, in the main, directed by domestic participants so the uncertainty has had less impact on demand and house prices at this end of the market when compared to the higher end. A significant number of higher end properties – particularly those in London and the south east – are purchased by EU and non-EU individuals. Brexit could see less demand for higher end properties as highly paid executives could follow their headquarters to mainland Europe; relieving pressure in demand for higher-end residential areas. We can, therefore, suggest house prices could decrease in the immediate to short term. RICS EU Referendum, Impacts for land, property and construction

4.20 When ranked across England, the average house price for SLDC is 114th (out of 347) at £234,75925 and LCC is rather lower at 257th at £154,278. To set this in context, the Council at the middle of the rank (174), Lichfield has an average price of just over £202,300. It is relevant to note that the median price is a little lower than the mean in SLDC at £195,00026and at £133,000 in LCC.

4.21 The figures above show that prices have seen a recovery since the bottom of the market in early 2009. It is notable that since the LCC CIL Economic Viability Assessment, the Land Registry reports an increase in average house prices of about 4%27 in the Lancaster District (17.5% increase since the bottom of the market) and since the SLDC CIL Viability Update by about 5% (17% increase since the bottom of the market).

25 CLG Live Table 581 (Last Update April 2014) 26 CLG Live Table 582 (Last updated April 2014) 27 http://landregistry.data.gov.uk/app/hpi shows average house price have increased by £14,703 from £164,524 in March 2013 to £180,227 in February 2016 (the most recent data).

36 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 4.1 Price Change

LCC Detached Semi- Terraced Flat All detached Market Bottom (Feb 09) £201,301 £126,534 £107,308 £89,821 £124,403 CIL Viability Study (Q3 12) £230,416 £145,169 £122,719 £92,493 £140,342 May-16 £241,672 £153,129 £126,950 £94,436 £146,286

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0 Detached Semi-detached Terraced Flat All

Market Bottom (Feb 09) CIL Viability Study (Q3 12) May-16

SLDC Detached Semi- Terraced Flat All detached Market Bottom (Feb 09) £269,576 £183,403 £155,735 £130,510 £185,280 DPD Viability (Jan 13) £288,329 £193,801 £165,279 £126,501 £194,150 CIL Update (May 14) £305,159 £205,403 £175,003 £133,180 £205,418 May-16 £323,534 £217,480 £183,187 £138,477 £216,208

£350,000

£300,000

£250,000

£200,000

£150,000

£100,000

£50,000

£0 Detached Semi-detached Terraced Flat All

Market Bottom (Feb 09) DPD Viability (Jan 13) CIL Upate (May 14) May-16

Source: Land Registry

37 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4.22 The rate of sales (i.e. sales per month) in the two areas is in line with the wider market and is now somewhat above the 2006 peak.

Figure 4.3 Sales per quarter – Indexed to 2006 Q1

300

250

200

150

100

50

0

2006-01 2006-05 2010-05 2010-09 2011-01 2011-05 2011-09 2012-01 2012-05 2012-09 2006-09 2007-01 2007-05 2007-09 2008-01 2008-05 2008-09 2009-01 2009-05 2009-09 2010-01 2013-01 2013-05 2013-09 2014-01 2014-05 2014-09 2015-01 2015-05 2015-09 2016-01

England and Wales South Lakeland Lancaster District London

Source: Land Registry (April 2016)

4.23 There is clearly uncertainty in the market, and it is not for this study to try to predict how the market may change in the coming years, and whether or not there will be a further increase in house prices. Having said this, it notable that before the EU Referendum, property agents Savills are predicting a 4% increase in 2015 and 2016 and an 18.2% increase over the next 5 years in the prime midlands /north residential markets and 13.7% in the next 5 years in the mainstream north west residential markets28.

4.24 To assist the Councils, further sets of appraisals have been run to show the effect of a 5% and a 10% increase, and a 5% and a 10% decrease in house prices.

The Local Market

4.25 A survey of asking prices was undertaken across the AONB in July 2016. There is very little data available due to the small geographical area and relatively low population. Reference has therefore been made to Land Registry Data.

4.26 Since the start of 2014 there is just one sale of a newbuild home recorded on the Land Registry. In LCC area of the AONB, 162 existing homes have been sold, and in the SLDC

28 Residential Property Focus. Savills. Issue 1 2016 - http://pdf.euro.savills.co.uk/uk/residential-property-focus- uk/residential-property-focus-feb

38 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

part of the AONB 200 existing homes have been sold in this period. These are set out in full in Appendix 1.

4.27 The Land Registry publishes data of all homes sold. We have reviewed recent newbuild sales prices from the Land Registry from the start of 201429. These transactions are summarised, by the main settlements, as follows:

29 The Land Registry makes all transactions available as and when they are registered via the ‘beta’ format tool at https://www.gov.uk/government/statistical-data-sets/price-paid-data-downloads. It does take some time for transactions to be registered – we estimate this to be about 4 to 6 months.

39 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 4.2 All Residential Sales – 1/1/14 to June 2016

Semi- Detached detached Terrace Flat All

AONB AREA Count 175 91 53 38 357 Max £1,150,000 £525,000 £475,000 £530,000 £1,150,000 Min £140,000 £80,000 £85,000 £105,000 £80,000 Mean £334,726 £233,729 £210,497 £223,958 £278,748 Median £300,000 £215,000 £186,500 £188,125 £250,000 ARNSIDE Count 60 30 15 31 136 Max £1,100,000 £525,000 £475,000 £530,000 £1,100,000 Min £150,000 £80,000 £124,050 £105,000 £80,000 Mean £314,533 £236,183 £234,737 £230,577 £269,312 Median £268,750 £204,250 £195,000 £202,000 £245,500 BEETHAM Count 2 1 4 1 8 Max £425,000 £240,000 £297,500 £145,000 £425,000 Min £315,000 £240,000 £126,750 £145,000 £126,750 Mean £370,000 £240,000 £244,188 £145,000 £262,719 Median £370,000 £240,000 £276,250 £145,000 £276,250 SANDSIDE Count 9 2 0 2 13 Max £480,000 £442,500 £245,000 £480,000

Min £220,000 £195,000 £132,500 £132,500

Mean £335,111 £360,000 £188,750 £310,077

Median £360,000 £318,750 £188,750 £349,000

40 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

SILVERDALE Count 48 16 12 4 80 Max £720,000 £425,000 £275,000 £415,000 £720,000 Min £170,000 £120,000 £100,000 £115,000 £100,000 Mean £350,845 £276,583 £182,333 £210,000 £303,673 Median £310,250 £265,500 £175,500 £155,000 £277,500 SLACKHEAD Count 12 2 0 0 14 Max £538,000 £425,000 £538,000

Min £245,000 £100,000 £100,000

Mean £356,000 £262,500 £342,643

Median £339,250 £262,500 £339,250

STORTH Count 10 9 1 0 20 Max £510,000 £370,000 £139,000 £510,000

Min £185,000 £160,000 £139,000 £139,000

Mean £300,200 £228,333 £139,000 £259,800

Median £273,500 £215,000 £139,000 £225,000

WARTON Count 22 23 15 0 60 Max £545,000 £260,000 £325,000 £545,000

Min £140,000 £100,000 £85,000 £85,000

Mean £295,159 £191,326 £169,923 £224,047

Median £270,000 £185,000 £154,000 £202,500

YEALAND CONYERS Count 6 1 1 0 8 Max £1,150,000 £280,000 £263,675 £1,150,000

Min £265,000 £280,000 £263,675 £263,675

Mean £570,000 £280,000 £263,675 £495,459

Median £398,750 £280,000 £263,675 £350,000

41 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

YEALAND REDMAYNE Count 1 4 4 0 9 Max £295,000 £312,500 £420,000 £420,000

Min £295,000 £165,000 £164,000 £164,000

Mean £295,000 £253,875 £306,000 £281,611

Median £295,000 £269,000 £320,000 £293,000

OTHER Count 5 3 1 0 9 Max £450,000 £235,000 £295,000 £450,000

Min £250,000 £185,000 £295,000 £185,000

Mean £325,200 £201,667 £295,000 £280,667

Median £310,000 £185,000 £295,000 £250,000

Source: Land Registry Price Paid Data 1/1/2014 to June 2016

4.28 Each house sold requires an Energy Performance Certificate. This is a public document that can be viewed on the EPC Register. The EPC contains the floor area (the Gross Internal Area – GIA) as well as a wide range of other information about the construction and energy performance of the building. This GIA information is also included in Appendix 1.

4.29 We have married the price paid data from the Land Registry with the homes’ floor area from the EPC Register:

42 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 4.3 All Residential Sales – 1/1/14 to June 2016 £/m2

Semi- Detached detached Terrace Flat All

AONB AREA Mean £2,586 £2,214 £2,132 £2,695 £2,437 Median £2,500 £2,142 £2,051 £2,693 £2,357 ARNSIDE Mean £2,545 £2,195 £1,965 £2,767 £2,447 Median £2,444 £2,143 £1,948 £2,770 £2,375 BEETHAM Mean £3,329 £2,892 £2,368 £2,636 £2,756 Median £3,329 £2,892 £2,763 £2,636 £2,763 SANDSIDE Mean £2,610 £2,383 £2,119 £2,572

Median £2,610 £2,383 £2,119 £2,400

SILVERDALE Mean £2,874 £2,229 £2,218 £2,491 £2,635 Median £2,859 £2,063 £2,218 £2,257 £2,609 SLACKHEAD Mean £2,504 £2,607 £2,513

Median £2,360 £2,607 £2,367

STORTH Mean £2,656 £2,367 £1,986 £2,492

Median £2,555 £2,347 £1,986 £2,462

WARTON Mean £2,134 £2,053 £2,079 £2,090

Median £2,129 £2,010 £2,058 £2,057

YEALAND CONYERS Mean £2,320 £2,784 £2,454

Median £2,402 £2,784 £2,519

YEALAND REDMAYNE Mean £1,545 £1,871 £2,552 £2,362

Median £1,545 £1,871 £2,634 £2,171

OTHER Mean £2,634 £2,011 £2,138 £2,371

Median £2,652 £1,927 £2,138 £2,217

Source: Land Registry Price Paid Data 1/1/2014 to June 2016 and EPC Register

4.30 At the time of this study there are no new homes being advertised for sale in the AONB area.

43 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4.31 We have compared these values to those used in LCC CIL Economic Viability Assessment (GVA 2012). This study assumed differences between the north and south of the AONB area applying the following values.

Table 4.4 LCC Value Assumptions 2012

Flat Terrace/mews Semi- Detached detached 1 bed 2 bed 2 bed 3 bed 4 bed £/ unit High Value Area - Silverdale £105,000 £120,000 £160,000 £230,000 £375,000 Medium Value Area - Warton £85,000 £105,000 £130,000 £160,000 £230,000 Unit Size (m2) 50 67 75 85 100 £/m2 High Value Area - Silverdale £2,100 £1,791 £2,133 £2,706 £3,750 Medium Value Area - Warton £1,700 £1,567 £1,733 £1,882 £2,300 Source: Table 13 LCC CIL Economic Viability Assessment (GVA 2012)

4.32 In the SLDC Land Allocations DPD Viability Study (April 2013) a value of £2,000/m2 was used in Arnside and £2,300/m2 in Storth.

Price Assumptions for Financial Appraisals

4.33 It is necessary to form a view about the appropriate prices for the schemes to be appraised in the study. The preceding analysis does not reveal simple clear patterns with sharp boundaries. It is necessary to relate this to the pattern development in expected to come forward in the future.

4.34 It would appear that the principal drivers of price are the situation rather than the location. Whilst there are some marked differences in prices, a good quality modern house in a reasonable location and situation is likely to have similar value in most parts of the AONB. There is one notable exception, being Warton which does have lower values as shown in the following figure that summarises the Land Registry PPD and the EPC data presented above:

44 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Figure 4.4 Summary of Prices Paid since 1/1/14 by Settlement

£3,000

£2,500

£2,000

£1,500

£1,000

£500

£0

Source: Land Registry Price Paid Data 1/1/2014 to June 2016 and EPC Register

4.35 Based on the above we set the prices in the appraisals at the following levels. It is important to note at this stage that this is a broad brush, high level study to test the Councils’ policies as required by the NPPF and to inform the setting of CIL as required by CIL Regulation 14. The values between new developments and within new developments will vary considerably.

Table 4.5 Price Assumptions £/m2

Warton Village £2,050 Yealand Conyers and Yealand Redmayne £2,350 All other areas £2,600 Source: HDH July 2016

4.36 On sites of 5 units or fewer we have assumed a small site premium of 10% to reflect the higher demand for such sites.

4.37 It is necessary to consider whether the presence of affordable housing would have a discernible impact on sales prices. Affordable housing will be present on many of the sites whose selling prices have informed our analysis. Our view is that any impact can and should be minimised through an appropriate quality design solution.

Affordable Housing

4.38 We have assumed that affordable housing is constructed by the site developer and then sold to a Registered Provider (RP). This is a simplification of reality as there are many ways in which affordable housing is delivered, including the transfer of free land to RPs for them to build on or the retention of the units by a scheme’s overall developer.

45 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4.39 There are three main types of affordable housing: Social Rent, Affordable Rent and Intermediate Housing Products for Sale. Prior to the 2015 Summer Budget, rents of affordable housing (both Affordable Rents and Social Rents) were generally increased by inflation (CPI) plus up to 1% each year. These provisions were to prevail until 2023. The result was that Housing Associations knew their rents would go up and those people and organisations who invest in such properties (directly or indirectly) knew that the rents were going up year on year. This made them a particularly attractive and secure form of investment or security for a loan.

4.40 In the Budget it was announced that social and affordable rents would be reduced by 1% per year for 4 years30.

4.41 It is too early to be certain of the impact and effect on the delivery of new housing, but the knock on effect of reducing rents is inevitably going to have an effect on values. There are a number of views as to what impact this change may have. Savills said in their paper Impact On the Housing Sector of the July Budget (July 2015):

VALUATIONS Valuations for Accounts – Existing Use Value Social Housing The effect of the proposed rent reductions on valuations for accounts is significant. The scale of the effect is broadly similar across different Provider types and we estimate will result in a reduction in current values of around 25%-30%. The impact will increase in future years. Relative to what they would have been, we estimate valuations will be some 30%-40% lower in ten years time. The RPs at the higher end of the reduction scale tend to be those with smaller surpluses. Valuations for Loan Security – Existing Use Value for Social Housing Valuations for loan security on an EUV-SH basis are undertaken against the background of the rent freedoms granted to mortgagees in possession (and the landlord they sell the stock to) under the insolvency provisions originally in the Rent Influencing Guidance and now in the Rent Standard. Similar exemptions for mortgagees are contained in the Welfare Reform and Work Bill now before Parliament. Our interpretation of these provisions is that Mortgagees and their successors would be able to charge a rent that they consider ‘affordable’ to those in low paid employment, and would be able to increase that rent in line with earnings in order to maintain a level affordability ratio (rent over household income). In our view valuations for loan security can therefore be based on rents and rent growth that sit outside the new rent regime. As a result – on the assumption that the insolvency provisions in the Bill remain as they are - it is our view that the proposal to reduced rents by 1% per annum for the next four years should not significantly affect current loan security valuations. Our valuations would assume the current rent could quickly converge to our opinion of an appropriate ‘affordable’ rent and continue to grow in line with earnings – which we generally assume over the longer term is broadly equivalent to CPI+1% - and keep in step with growth in the sector over the long term. However valuations in future years valuations will not grow as previously expected (eg circa 5% relative reduction by year 10) as the starting rent for future valuations will be lower than it otherwise would have been.

30 We understand that the objective is to reduce the overall costs of Housing Benefit / Local Housing Allowance / Universal Credit to the Exchequer.

46 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Of course the Budget provisions may impact on bad debts, voids and discount rates which may adversely feed through into EUV-SH valuations.

4.42 It is clearly necessary to consider the value of affordable housing in this context. Whilst this is a rapidly changing area it is possible to make some assumptions. From a valuation perspective, we reconsidered the value of affordable housing from first principles and adjusted the yield by up to 50 basis points (BPS) (i.e. 0.5%)31.

Social Rent

4.43 The value of a rented property is strongly influenced by the passing rent – although factors such as the condition and demand for the units also have a strong impact. Social Rents are set at a local level through a national formula that smooths the differences between individual properties and ensures properties of a similar type pay a similar rent:

Table 4.6 Social Rent (£) Fiscal Calendar 2015

LCC 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms Per week £71 £84 £95 £106 Per Month £306 £362 £412 £461 Per Year £3,667 £4,349 £4,950 £5,536 SLDC 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms Per week £80 £90 £98 £105 Per Month £345 £392 £424 £454 Per Year £4,145 £4,700 £5,088 £5,450 Source: HCA Statistical Return (2015)

4.44 This study concerns only the value of newly built homes. In spite of the differences in rents there seems to be relatively little difference in the amounts paid by RPs for such units across the study area – and there is very little such housing being developed. In this study we have assessed the value of social rents assuming 10% management costs, 4% voids and bad debts and 6% repairs. We have capitalised the income at 5.5%, reflecting the changes due to the Summer Budget (prior to which an assumption of 5% would have been used).

31 An increase in yields leads to a reduction in prices.

47 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 4.7 Capitalisation of Social Rents

LCC 1 Bedroom 2 Bedroom 3 Bedroom Gross Rent £3,667 £4,349 £4,950 Net rent £2,933.76 £3,478.97 £3,959.93 Value £53,341.14 £63,253.96 £71,998.75 m2 50 70 84 £/m2 £1,066.82 £904 £857 SLDC 1 Bedroom 2 Bedroom 3 Bedroom Gross Rent £4,145 £4,700 £5,088 Net rent £3,315.86 £3,759.99 £4,070.32 Value £60,288.41 £68,363.40 £74,005.81 m2 50 70 84 £/m2 £1,205.77 £977 £881 Source: HDH January 2016

4.45 Bearing in mind the similarities across the area, we have assumed Social Rent has a value of £950/m2 across the study area.

4.46 We have compared these values to those used in LCC CIL Economic Viability Assessment (GVA 2012) in which the assumption was that Social Rented flats had a value of a little under £677/m2 and that Social Rented houses had a value of about £600/m 2 – although these were simply carried forward from the 2010 Affordable Housing Viability Study. These values are area wide figures so include the lowest value parts of Lancaster, Morecambe and Heysham so should be given little weight here.

4.47 In the SLDC Land Allocations DPD Viability Study (April 2013), Social Rented housing was assumed to have a value of 50% of market value. The appraisals in this study are based on Affordable Rent rather than Social Rent.

Affordable Rent

4.48 The Government introduced Affordable Rent as a ‘new’ type of affordable housing. It is important to note that the modelling in this study is based on Affordable Rent, in line with the Councils’ normal request.

4.49 Under Affordable Rent a rent of no more than 80% of the open market rent for that unit can be charged. One of the aims of the Government’s policy on affordable housing is to make the HCA budget go further. The Affordable Rent that is over and above the Social Rent is used by

48 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Registered Providers (RPs) to raise capital through borrowing or securitisation32. This supports the building of the affordable units – the extra borrowing replacing grant.

4.50 The objective of affordable rent is that by charging higher rents for the affordable housing, less grant and subsidy is required and thus the development of affordable housing would be self- funded as, on market housing led schemes, grant is only now available in exceptional circumstances, for example on high priority sites where there is still a funding gap after the higher affordable rent has been allowed for. As the amount is uncertain we have assumed no grant will be available in the future.

4.51 As with social rent, the value of affordable rented property is strongly influenced by the passing rent – although factors such as the condition and demand for the units also have a strong impact. Social Rents are set at a local level through a national formula that smooths the differences between individual properties and ensures properties of a similar type pay a similar rent:

Table 4.8 Affordable Rent (£) Fiscal Calendar 2015

LCC 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms Per week £85 £99 £111 £114 Per Month £367 £430 £482 £495 Per Year £4,406 £5,160 £5,784 £5,936 SLDC 1 Bedroom 2 Bedrooms 3 Bedrooms 4 Bedrooms Per week £87 £110 £119 £123 Per Month £376 £477 £518 £535 Per Year £4,513 £5,723 £6,213 £6,414 Source: HCA Statistical Return (2015)

4.52 This study concerns only the value of newly built homes. In spite of the differences in rents there seems to be relatively little difference in the amounts paid by RPs for such units across the study area – and there is very little such housing being developed. In this study we have assessed the value of social rents assuming 10% management costs, 4% voids and bad debts and 6% repairs. We have capitalised the income at 6%, reflecting the changes due to the Summer Budget (prior to which an assumption of 5.5% would have been used.

32 The creation and issuance of tradable securities, such as bonds, that are backed by the income generated by an asset, a loan, a public works project or other revenue source. (Source FT Lexicon)

49 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 4.5 Capitalisation of Social Rents

LCC 1 Bedroom 2 Bedroom 3 Bedroom Gross Rent £4,406 £5,160 £5,784 Net rent £3,525 £4,128 £4,628 Value £58,750 £68,802 £77,126 m2 50 70 84 £/m2 £1,175 £983 £918 SLDC 1 Bedroom 2 Bedroom 3 Bedroom Gross Rent £4,513 £5,723 £6,213 Net rent £3,610 £4,578 £4,970 Value £60,167 £76,301 £82,838 m2 50 70 84 £/m2 £1,203 £1,090 £986 Source: HDH January 2016

4.53 Bearing in mind the similarities across the area, we have assumed Social Rent has a value of £1,050/m2 across the study area.

4.54 We have compared these values to those used in LCC CIL Economic Viability Assessment (GVA 2012) in which the assumption was that Affordable Rented housing had the same value as Social Rented housing.

4.55 In the SLDC Land Allocations DPD Viability Study (April 2013), Affordable Rented housing was assumed to have a value of £1,050/m2 of market value.

Intermediate Products for Sale

4.56 Intermediate products for sale include discounted for sale, shared ownership and shared equity products. The market for these is slow at present and we have found little evidence of the availability of such products in the study area. We have assumed a value of 65% of open market value for these units. Some units may come forward at both higher and lower values, however this is considered to be appropriate for this high level assessment.

4.57 These values were based on purchasers buying an initial 50% share of a property and a 2.75%33 per annum rent payable on the equity retained. The rental income is capitalised at 5.5% having made a 10% management allowance.

33 A rent of up to 3% may be charged – although we understand this is not charged in the area.

50 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

4.58 We have compared these values to those used in LCC CIL Economic Viability Assessment (GVA 2012) in which the assumption was that Intermediate housing had the same value as Social Rented housing.

4.59 In the SLDC Land Allocations DPD Viability Study (April 2013), Intermediate housing was assumed to have a value of 70% of market value.

Grant Funding

4.60 For many years, the HCA and Local Planning Authorities (LPAs) have aspired to ensure that affordable housing is delivered without grant. When LPAs have negotiated with developers during the planning process, about the number and type of affordable housing to be provided through s106 agreements and planning conditions, the initial basis of those discussions has usually been that the affordable units would be made available without any grant.

4.61 In this study we have assumed that grant is not available. It is important to note that this is a distinctly difference to the approach taken in some of the earlier viability work where grant was allowed for.

51 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

52 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

5. Land Price Assumptions

5.1 Chapters 2 and 3 set out the methodology used in this study to assess viability. An important element of the assessment, under both sets of guidance, is the value of the land. Under the method recommended in the Harman Guidance, the worth of the land before consideration of any increase in value, from a use that may be permitted though a planning consent, is the Existing Use Value (EUV) or Alternative Use Value (AUV). This is used as the starting point for the assessment as this is one of the key variables in the financial development appraisals.

5.2 In this chapter the values of different types of land are considered. The value of land relates closely to the use to which it can be put and will range considerably from site to site; however, as this is a high level study, the three main uses, being agricultural, residential and industrial have been assessed. Consideration is then given to the amount of uplift that may be required to ensure that land will come forward and be released for development.

Current and Alternative Use Values

5.3 In order to assess development viability, it is necessary to analyse Existing and Alternative Use Values. EUV refers to the value of the land in its current use before planning consent is granted, for example, as agricultural land. AUV refers to any other potential use for the site. For example, a brownfield site may have an alternative use as industrial land.

5.4 The PPG includes a definition of land value as follows:

Land Value

Central to the consideration of viability is the assessment of land or site value. The most appropriate way to assess land or site value will vary but there are common principles which should be reflected. In all cases, estimated land or site value should:  reflect emerging policy requirements and planning obligations and, where applicable, any Community Infrastructure Levy charge;  provide a competitive return to willing developers and land owners (including equity resulting from those building their own homes); and  be informed by comparable, market-based evidence wherever possible. Where transacted bids are significantly above the market norm, they should not be used as part of this exercise. PPG ID: 10-014-20140306

A competitive return for the land owner is the price at which a reasonable land owner would be willing to sell their land for the development. The price will need to provide an incentive for the land owner to sell in comparison with the other options available. Those options may include the current use value of the land or its value for a realistic alternative use that complies with planning policy. PPG ID: 10-015-20140306

5.5 It is important to fully appreciate that land value should reflect emerging policy requirements and planning obligations. When considering comparable sites, the value will need to be adjusted to reflect this requirement.

53 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

5.6 To assess viability, the value of the land for the particular scheme needs to be compared with the AUV, to determine if there is another use which would derive more revenue for the landowner. If the Residual Value does not exceed the AUV, then the development is not viable; if there is a surplus (i.e. profit) over and above the ‘normal’ developer’s profit having paid for the land, then there is scope to pay CIL.

5.7 For the purpose of the present study, it is necessary to take a comparatively simplistic approach to determining the alternative use value. In practice, a wide range of considerations could influence the precise value that should apply in each case, and at the end of extensive analysis the outcome might still be contentious.

5.8 The ‘model’ approach is outlined below:

i. For sites previously in agricultural use, then agricultural land represents the existing use value. It is assumed that the sites of 0.5ha or more fall into this category. ii. For paddock and garden land on the edge of or in a smaller settlement we have adopted a ‘paddock’ value. It is assumed the sites of less than 0.5ha fall in this category. iii. Where the development is on brownfield land are assumed to have industrial value.

5.9 In the LCC CIL Economic Viability Assessment (GVA 2012), the following assumptions were made (paragraph 6.10):

Residential Benchmark 6.10 The CIL economic assessment adopts a District wide benchmark of £530,000 per hectare. This is based on the last (July 2009) Property Market Report, published by the Valuation Office, which included data on bulk residential land in Lancaster. This placed the average value for bulk residential land at £1.55m per hectare. However, this had fallen from £2.4m per hectare in the July 2008 VOA P MR, representing an annual decline of around 30%. If this trend is projected forwards from 2009 to 2012, the average residential land value for Lancaster in 2012 was estimated to be circa £0.53m per hectare. Commercial (Industrial and Offices) 6.11 As a benchmark, we have had to rely on information provided by the Valuation Office despite the fact Lancaster was removed as a geographical data point in 2009. 6.12 The VOA recorded ‘typical values’ for industrial land in July 2007 at £550,000 per ha. Two years later (July 2009) amidst the height of the recession the typical value for industrial land had fallen to £450,000 per ha, a fall of 18%. The CIL economic assessment uses the typical values for 2009 (£450,000) as the benchmark for all employment uses (offices and industrial). 6.13 As a sense check, we have referred to the VOA’s Property Market Report (2011) and industrial land values for Liverpool (the nearest assessed location). Based on a cleared site of 0.5-1.0 hectares, values are estimated at £450,000 per ha, which is consistent with our assumptions. Commercial (Retail) 6.14 Generally, in our experience, supermarket operators offer between £1,000,000 and £1,500,000m per acre (£2,471,000 and £3,700,000 per hectare). The CIL assessment includes a benchmark of £1,000,000 per acre (£2,471,000 per ha) for convenience retail. 6.15 For other forms of retail (comparison and retail warehouse) the CIL assessment includes a benchmark of £500,000 per acre (£1,235,550 per ha).

5.10 In the SLDC Land Allocations DPD Viability Study (April 2013), the following assumptions were used:

54 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

6.35. To move the study forward, in the second iteration of this report (i.e. that for the second consultation event on 22nd February) we used alternative land prices of: Agricultural Land £25,000/ha Paddock Land £50,000/ha Industrial Land West £300,000/ha Remainder £400,000/ha 6.36. To calculate the Viability Threshold (the amount the Residual Value must exceed for a site to be viable) we initially assumed a percentage uplift of 20% on all sites. In addition to this we have assumed a further uplift of £400,000/ha on greenfield sites (being those in agricultural and paddock uses).

5.11 This was an area of some controversy and debate – however both the SLDC Land Allocations DPD and the CIL were found sound based on this approach. The LCC Viability evidence has not been independently reviewed.

5.12 The assumptions from the SLDC Land Allocations DPD Viability Study (April 2013) have been carried forward into this study. There is no doubt that a threshold at these levels provides a very substantial return relative to the existing use value of the land.

55 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

56 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

6. Development Costs

6.1 This chapter considers the costs and other assumptions required to produce financial appraisals for the development sites and typologies.

Development Costs

Construction costs: baseline costs

6.2 The cost assumptions are based on the Building Cost Information Service (BCIS)34 data. There has been an increase in construction costs since the earlier viability work and this is an important area of change. The cost figure for ‘Estate Housing – Generally’ is £892/m2 in Lancaster District, and £941/m2 in South Lakeland District at the time of this study35.

6.3 In August 2015 a report was published that considered the construction costs on smaller sites. Housing development: the economics of small sites – the effect of project size on the cost of housing construction (August 2015) was carried out by BCIS, having been commissioned by the Federation of Small Businesses. This study concluded that the construction price for schemes of 1 to 5 units was about 13% higher than the for schemes of over 10 units and that the construction price for schemes of 1 to 10 units was about 6% higher than for schemes of over 10 units. These adjustments have been made to the small schemes modelled in this report.

6.4 The base assumption in this report is that homes are built to the basic Building Regulation Part L 2010 Standards but not to higher environmental standards. This is in line with the Government announcement made at the time of the Summer Budget in the Fixing the foundations productivity report36 its intention not to proceed with the zero carbon buildings policy.

… repeat its successful target from the previous Parliament to reduce net regulation on housebuilders. The government does not intend to proceed with the zero carbon Allowable Solutions carbon offsetting scheme, or the proposed 2016 increase in on-site energy efficiency standards, but will keep energy efficiency standards under review, recognising that existing measures to increase energy efficiency of new buildings should be allowed time to become established

6.5 As a result, there will be no uplift to Part L of the Building Regulations during 2016, and both the 2016 zero carbon homes target and the 2019 target for non-domestic zero carbon buildings will be dropped, including the Allowable Solutions programme.

34 BCIS is the Building Cost Information Service of the Royal Institution of Chartered Surveyors. 35 BCIS Rebased to Lancaster and South Lakeland £/m 2 studies, Rate per m 2 gross internal floor area for the building cost including prelims. Last updated: 23rd July 2016. 36 https://www.gov.uk/government/publications/fixing-the-foundations-creating-a-more-prosperous-nation

57 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

6.6 The Department for Communities and Local Government (DCLG) publishes occasional reviews of the costs of building to the Code for Sustainable Homes (CfSH). Whilst the CfSH is not being pursued as a result of the Standards Review, these provide useful guidance as to the costs of the implementation of the various environmental standards. Bearing in mind the move towards higher standards with the amendments to Building Regulations, we have referred to Cost of building to the Code for Sustainable Homes, Updated cost review. (DCLG, Aug 2011). The national policies in relation to climate change and overall national minimum building standards have been clarified and not all the requirements of CfSH Level 437 will become mandatory (and are not a requirement of the emerging DPD). Having said this, environmental standards are increasing.

6.7 Based on the best currently available information, the costs of building to the now clarified, enhanced building standards is estimated to be between 1% and 2% of the BCIS costs. In this viability assessment, the median BCIS costs are used. The BCIS is based on average costs of completed projects so do not fully reflect the costs of increased standards. For residential property this has been increased by 1.5% to reflect the increases in environmental standards contained in the Building Regulations.

Construction costs: affordable dwellings

6.8 The procurement route for affordable housing is assumed to be through construction by the developer and then disposal to a housing association on completion. In the past, when considering the build cost of affordable housing provided through this route, we took the view that it should be possible to make a saving on the market housing cost figure, on the basis that one might expect the affordable housing to be built to a slightly different specification than market housing. However, the pressures of increasingly demanding standards for housing association properties have meant that, for conventional schemes of houses at least, it is no longer appropriate to use a reduced build cost; the assumption is of parity.

Other normal development costs

6.9 In addition to the BCIS £/m2 build cost figures described above, allowance needs to be made for a range of site costs (roads, drainage and services within the site, parking, footpaths, landscaping and other external costs). Many of these items will depend on individual site circumstances and can only properly be estimated following a detailed assessment of each site. This is not practical within this broad brush study and the approach taken is in line with the PPG and the Harman Guidance.

6.10 Nevertheless, it is possible to generalise. Drawing on experience and the comments of stakeholders it is possible to determine an allowance related to total build costs. This is normally lower for higher density than for lower density schemes since there is a smaller area

37 The Code for Sustainable Homes is no longer becoming mandatory – although some of the requirements have been assimilated into Building Regulations.

58 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

of external works, and services can be used more efficiently. Large greenfield sites would also be more likely to require substantial expenditure on bringing mains services to the site.

6.11 In the light of these considerations a scale of allowances for the residential sites has been used, ranging from 10% of build costs for the smaller sites, to 20% for the larger greenfield (multi-phase) schemes.

Abnormal development costs and brownfield sites

6.12 The NPPF says (with emphasis) at Paragraph 174:

… To ensure viability, 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…

6.13 To a large extent, abnormal costs will be reflected in land value. Those sites that are less expensive to develop will command a premium price over and above those that have exceptional or abnormal costs. It is not the purpose of a study of this type to standardise land prices across an area.

6.14 The treatment of abnormals was considered at Gedling Council’s Examination in Public. There is an argument, as set out in Gedling38, that it may not be appropriate for abnormals to be built into appraisals in a high level study of this type. Councils should not plan for the worst case scenario – rather for the norm. For example, if two similar sites were offered to the market and one was previously in industrial use with significant contamination, and one was ‘clean’ then the landowner of the contaminated site would have to take a lower land receipt for the same form of development due to the condition of the land. The Inspector said:

… demolition, abnormal costs and off site works are excluded from the VA, as the threshold land values assume sites are ready to develop, with no significant off site secondary infrastructure required. While there may be some sites where there are significant abnormal construction costs, these are unlikely to be typical and this would, in any case, be reflected in a lower threshold land value for a specific site. In addition such costs could, at least to some degree, be covered by the sum allowed for contingencies.

6.15 In some cases, where the site involves redevelopment of land which was previously developed, there is the potential for abnormal costs to be incurred. Abnormal development costs might include demolition of substantial existing structures; flood prevention measures at waterside locations; remediation of any land contamination; remodelling of land levels; and so on. An allowance for abnormal costs associated with brownfield sites has been made of 5% of the BCIS costs.

38 REPORT TO GEDLING BOROUGH COUNCIL, THE PLANNING INSPECTORATE REF PINS/N3020/429/4, MAY 2015

59 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

6.16 When considering this assumption, it is important to note that brownfield sites in the AONB are unlikely to have previously been in heavy manufacturing or other highly contamination uses. Where HDH have undertaken similar work in the Northeast or Thames Estuary where previous uses require very high levels of remediation we have used higher assumptions. This is not the case in this area.

6.17 Abnormal costs will be reflected in land value. Those sites that are less expensive to develop will command a premium price over and above those that have exceptional or abnormal costs. It is not the purpose of a study of this type to standardise land prices across an area.

Fees

6.18 For residential development on reasonably sized sites professional fees are assumed to amount to 10% of build costs. This is made up as follows and includes the various assessments and appraisals that the Councils require under the various Plan policies:

Architects 6% Quantity Surveyors 0.5% Planning Consultants 1% Others 2.5%

Contingencies

6.19 For previously undeveloped and otherwise straightforward sites, a contingency of 2.5% is made, with a higher figure of 5% on more risky types of development, previously developed land and on central locations. So the 5% figure was used on the brownfield sites and the 2.5% figure on the remainder.

S106 Contributions and the costs of infrastructure

6.20 SLDC has adopted CIL with effect from 1st June 2015. In the AONB the appropriate rate for Residential Development is £50/m2. In addition, an allowance of £2,500/unit was made to reflect site specific s106 contributions. These costs are reflected in the appraisals.

6.21 At this stage LCC have not adopted CIL. CIL has not been applied to the sites in the LCC area,

Financial and Other Appraisal Assumptions

VAT

6.22 For simplicity it has been assumed throughout, that either VAT does not arise, or that it can be recovered in full.

Interest rate

6.23 The appraisals assume 6% pa for total debit balances, we have made no allowance for any equity provided by the developer. This does not reflect the current working of the market nor the actual business models used by developers. In most cases the smaller (non-plc)

60 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

developers are required to provide between 30% and 40% of the funds themselves, from their own resources, so as to reduce the risk to which the lender is exposed. The larger plc developers tend to be funded through longer term rolling arrangements across multiple sites.

6.24 The 6% assumption may seem high given the very low base rate figure (0.25% August 2016). Developers that have a strong balance sheet, and good track record, can undoubtedly borrow less expensively than this, but this reflects banks’ view of risk for housing developers in the present situation. In the residential appraisals we have prepared a simple cashflow to calculate interest.

6.25 The relatively high assumption of the 6% interest rate, and the assumption that interest is chargeable on all the funds employed, has the effect of overstating the total cost of interest as most developers are required to put some equity into most projects. In this study a cautious approach is being taken, so we believe this is a sound assumption.

6.26 An arrangement fee of 1% of the peak borrowing requirement is included.

Developers’ profit

6.27 An allowance needs to be made for developers’ profit / return and to reflect the risk of development. Neither the NPPF, nor the CIL Regulations, nor the CIL Guidance provide useful guidance in this regard so, in reaching this decision, the RICS’s ‘Financial Viability in Planning’ (August 2012), the Harman Guidance Viability Testing Local Plans, Advice for planning practitioners (June 2012), have been considered and referred to the HCA’s Economic Appraisal Tool. None of these documents are prescriptive, but they do set out some different approaches.

6.28 RICS’s ‘Financial Viability in Planning’ (August 2012) says:

3.3.2 The benchmark return, which is reflected in a developer’s profit allowance, should be at a level reflective of the market at the time of the assessment being undertaken. It will include the risks attached to the specific scheme. This will include both property-specific risk, i.e. the direct development risks within the scheme being considered, and also broader market risk issues, such as the strength of the economy and occupational demand, the level of rents and capital values, the level of interest rates and availability of finance. The level of profit required will vary from scheme to scheme, given different risk profiles as well as the stage in the economic cycle. For example, a small scheme constructed over a shorter timeframe may be considered relatively less risky and therefore attract a lower profit margin, given the exit position is more certain, than a large redevelopment spanning a number of years where the outturn is considerably more uncertain. ……..

6.29 The Harman Guidance says:

Return on development and overhead The viability assessment will require assumptions to be made about the average level of developer overhead and profit (before interest and tax). The level of overhead will differ according to the size of developer and the nature and scale of the development. A ‘normal’ level of developer’s profit margin, adjusted for development risk, can be determined from market evidence and having regard to the profit requirements of the providers of development finance. The return on capital employed (ROCE) is a measure of the level of profit relative to level of capital required to deliver a project, including build costs, land purchase, infrastructure, etc.

61 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

As with other elements of the assessment, the figures used for developer return s hould also be considered in light of the type of sites likely to come forward within the plan period. This is because the required developer return varies with the risk associated with a given development and the level of capital employed. Smaller scale, urban infill sites will generally be regarded as lower risk investments when compared with complex urban regeneration schemes or large scale urban extensions. Appraisal methodologies frequently apply a standard assumed developer margin based upon either a percentage of Gross Development Value (GDV) or a percentage of development cost. The great majority of housing developers base their business models on a return expressed as a percentage of anticipated gross development value, together with an assessment of anticipated return on capital employed. Schemes with high upfront capital costs generally require a higher gross margin in order to improve the return on capital employed. Conversely, small scale schemes with low infrastructure and servicing costs provide a better return on capital employed and are generally lower risk investments. Accordingly, lower gross margins may be acceptable. This sort of modelling – with residential developer margin expressed as a percentage of GDV – should be the default methodology, with alternative modelling techniques used as the exception. Such an exception might be, for example, a complex mixed use development with only small scale specialist housing such as affordable rent, sheltered housing or student accommodation.

6.30 The HCA’s Economic Appraisal Tool – the accompanying guidance for the tool kit says:

Developer's Return for Risk and Profit (including developer’s overheads) Open Market Housing The developer 'profit' (before taxation) on the open market housing as a percentage of the value of the open market housing. A typical figure currently may be in the region of 17.5-20% and overheads being deducted, but this is only a guide as it will depend on the state of the market and the size and complexity of the scheme. Flatted schemes may carry a higher risk due to the high capital employed before income is received. Affordable Housing The developer 'profit' (before taxation) on the affordable housing as a percentage of the value of the affordable housing (excluding SHG). A typical figure may be in the region of 6% (the profit is less than that for the open market element of the scheme, as risks are reduced), but this is only a guide.

6.31 It is unfortunate that the above are not consistent, but it is clear that the purpose of including a developers’ profit figure is not to mirror a particular business model, but to reflect the risk a developer is taking in buying a piece of land, and then expending the costs of construction before selling the property. The use of developers’ profit in the context of area wide viability testing of the type required by the NPPF and CIL Regulation 14, is to reflect that level of risk.

6.32 At the Shinfield appeal39 (January 2013) the inspector considered this specifically saying:

Developer’s profit 43. The parties were agreed that costs40 should be assessed at 25% of costs or 20% of gross development value (GDV). The parties disagreed in respect of the profit required in respect of the affordable housing element of the development with the Council suggesting that the figure for this

39 APP/X0360/A/12/2179141 (Land at The Manor, Shinfield, Reading RG2 9BX) 40 i.e. the developers profit / competitive return.

62 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

should be reduced to 6%. This does not greatly affect the appellants’ costs, as the affordable housing element is 2%, but it does impact rather more upon the Council’s calculations. 44. The appellants supported their calculations by providing letters and emails from six national housebuilders who set out their net profit margin targets for residential developments. The figures ranged from a minimum of 17% to 28%, with the usual target being in the range 20-25%. Those that differentiated between market and affordable housing in their correspondence did not set different profit margins. Due to the level and nature of the supporting evidence, I give great weight [to] it. I conclude that the national housebuilders’ figures are to be preferred and that a figure of 20% of GDV, which is at the lower end of the range, is reasonable.

6.33 Generally, we do not agree that linking the developer’s profit to GDV is reflective of risk, as the risk relates to the cost of a scheme – the cost being the money put at risk as the scheme is developed. As an example (albeit an extreme one to illustrate the point) we can take two schemes, A and B, each with a GDV £1,000,000, but scheme A has a development cost of £750,000 and scheme B a lesser cost of £500,000. All other things being equal, in A the developer stands to lose £750,000 (and make a profit of £250,000), but in B ‘only’ £500,000 (and make a profit of £500,000). Scheme A is therefore more risky, and it therefore follows that the developer will wish (and need) a higher return. By calculating profit on costs, the developer’s return in scheme A would be £150,000 and in scheme B would be £100,000 and so reflect the risk – whereas if calculated on GDV the profits would be £200,000 in both.

6.34 Broadly there are four different approaches that could be taken:

a. To set a different rate of return on each site to reflect the risk associated with the development of that site. This would result in a lower rate on the smaller and simpler sites – such as the greenfield sites, and a higher rate on the brownfield sites. b. To set a rate for the different types of unit produced – say 20% for market housing and 6% for affordable housing, as suggested by the HCA. c. To set the rate relative to costs – and thus reflect the risks of development. d. To set the rate relative to the gross development value.

6.35 In deciding which option to adopt, it is important to note that we are not trying to re-create any particular developer’s business model. Different developers will always adopt different models and have different approaches to risk.

6.36 The argument is sometimes made that financial institutions require a 20% return on development value and if that is not shown they will not provide development funding. In the pre-Credit Crunch era there were some lenders who did take a relatively simplistic view to risk analysis but that is no longer the case. Most financial institutions now base their decisions behind providing development finance on sophisticated financial modelling that it is not possible to replicate in a study of this type. They require the developer to demonstrate a sufficient margin, to protect them in the case of changes in prices or development costs, but they will also consider a wide range of other factors, including the amount of equity the developer is contributing – both on a loan to value and loan to cost basis, the nature of development and the development risks that may arise due to demolition works or similar, the warranties offered by the professional team, whether or not the directors will provide personal guarantees, and the number of pre-sold units.

63 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

6.37 In the LCC CIL Economic Viability Assessment (GVA 2012) an assumption of 20% of development costs was used. In the SLDC Land Allocations DPD Viability Study (April 2013) an assumption of 20% of GDV was used. In this study 20% of GDV has been used.

6.38 It is useful to consider the assumptions used in other studies in other parts of England. We have reviewed developer return assumptions used by other councils in England in development plans approved during the first half of 2014. These are set out in the table below.

Table 6.1 Developer’s Return Assumptions Used Elsewhere

Local Authority Developer’s Profit Babergh 17% Cannock Chase 20% on GDV Christchurch & East Dorset 20% on GDC East Hampshire 20% market/ 6% Affordable Erewash 17% Fenland 15-20% GNDP 20% market/17.5% large sites/ 6% Affordable Reigate & Banstead 17.5% market/ 6% Affordable Stafford 20% (comprising 5% for internal overheads). Staffordshire Moorlands 17.5% market/ 6% Affordable Warrington 17.5% Source: Planning Advisory Service (collated by URS)

6.39 The assumptions with regard to developers’ return / profit are at the upper end of the range. Together these assumptions illustrate the generally cautious approach taken through the viability work and the comments made by the development industry through the consultation process.

Voids

6.40 On a scheme comprising mainly individual houses, one would normally assume only a nominal void period as the housing would not be progressed if there was no demand. In the case of apartments in blocks this flexibility is reduced. Whilst these may provide scope for early marketing, the ability to tailor construction pace to market demand is more limited.

6.41 For the purpose of the present study, a three month void period is assumed for residential developments. A nine month void period is assumed for non-residential developments.

Phasing and timetable

6.42 A pre-construction period of six months is assumed for all of the sites. Each dwelling is assumed to be built over a nine month period. The phasing programme for an individual site will reflect market take-up and would, in practice, be carefully estimated taking into account the site characteristics and, in particular, the size and the expected level of market demand.

64 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

A consultee suggested that these rates were optimistic. In practice the appraisals are based on a quarterly cash flow, a cautious set of assumptions are used, and the modelling is based on the receipt of the sales proceeds in the 7th quarter (ie during months 19 to 21) after the purchase of the site. No adjustment has been made.

6.43 The rate of delivery will be an important factor when the Councils are considering the release of sites so as to manage the delivery of housing and infrastructure. Two aspects have been considered, the first is the number of outlets that a development site may have, and secondly the number of units that an outlet may deliver.

6.44 It is assumed a maximum per outlet delivery rate of 50 units per year. On a site with 35% affordable housing this equates to 32 or so market units per year. On the smaller sites much slower rates are assumed to reflect the nature of the developer that is likely to be bringing smaller sites forward.

6.45 These assumptions are conservative and do, properly, reflect current practice. This is the appropriate assumption to make to be in line with the PPG and Harman Guidance.

Site Acquisition and Disposal Costs

Site holding costs and receipts

6.46 Each site is assumed to proceed immediately (following a 6 month mobilisation period) and so, other than interest on the site cost during construction, there is no allowance for holding costs, or indeed income, arising from ownership of the site.

Acquisition costs

6.47 A simplistic approach is taken and an allowance 1.5% assumed for acquisition agents’ and legal fees. Stamp duty is calculated at the prevailing rates.

Disposal costs

6.48 For the market and the affordable housing, sales and promotion and legal fees are assumed to amount to some 3.5% of receipts. For disposals of affordable housing, these figures can be reduced significantly depending on the category, so in fact the marketing and disposal of the affordable element is probably less expensive than this.

65 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

66 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

7. Policy Requirements

7.1 Future development in the Arnside & Silverdale AONB will be subject to the policies set out in the two Local Authority’s Development Plans and the additional policies set out in the Arnside & Silverdale AONB DPD. Following discussion with the Councils it was agreed that the analysis would be based on the Policies set out in the following Policy Documents:

a. A Local Plan for Lancaster District, 2011-2031 Development Management DPD – Adopted December 2014.

Lancaster City Council is currently preparing a Land Allocations DPD for the whole area, excepting the Arnside & Silverdale AONB. It is being prepared on the same timetable as the AONB DPD. When complete, the Land Allocations DPD will replace all other allocations in LCC for the area outside the AONB.

b. South Lakeland is currently preparing a Development Management Policies document. Existing policies set out in the old 2006 Local Plan will be superseded by the new Development Management Policies document. The new policies will complement the existing Core Strategy policies. Policies within the document will apply to development the AONB except where the policies in the AONB DPD set out an AONB-specific approach.

This study is based on the South Lakeland Local Plan Development Management Policies Development Plan Document, Preferred Options & Draft Policies – unpublished pre-consultation draft dated September 2016

It is important to note that this is not an adopted document and the existing policies are set out in the following:

(i) South Lakeland Saved Local Plan adopted in 1997 and amended in 2006. This is a stand-alone document. An extract from the Local Plan has been produced which sets out exactly which policies have or will be replaced by the Core Strategy, Land Allocations or AONB DPD.

(ii) South Lakeland Core Strategy DPD (2010).

(iii) South Lakeland Land Allocations DPD (2013)

c. Arnside & Silverdale AONB DPD – unpublished pre-consultation draft dated September 2016

7.2 Neither LCC nor SLDC are expecting to meet their Objectively Assessed Need for Housing (OAN) from sites within the AONB. Likewise, neither Council is counting sites within the AONB towards their five year land supply calculations.

67 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

7.3 The current policy requirements and how they have been reflected in this study are summarised below. Only those planning policies that are likely to relate to the development identified in the DPD is listed. Where possible, policies have been grouped to reflect the solutions required to fulfil them:

68 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 7.1 Summary of Planning Policy Requirements LCC South Lakeland District AONB DPD Modelling

DM1– Ge neral Requirements for all AS03 – General requirements development

This is a broad policy that sets out the In addition to General Requirements for range general requirements that apply to all development set out in the district- all new development. These can be wide Local Plans for Lancaster and divided into broad types. Those South Lakeland, the General connected by design deal with the wider Requirements will apply to all area. development within the Arnside & Silverdale AONB:

Policy DM20: Enhancing Accessibility DM1– General Requirements for all AS11 –Infrastructure for New and Transport Linkages development Development This is a broad policy that sets out the Infrastructure requirements to be met. New development will contribute towards This is dealt with under the CIL / s106 range general requirements that apply to new infrastructure or improve the assumptions as set out in Chapter 5. new development. capacity of existing infrastructure, as appropriate

Policy DM48: Community Infrastructure

Development proposals and This is dealt with under the CIL / s106 infrastructure provision will be co- assumptions as set out in Chapter 5. ordinated to ensure that growth within the district is supported, where necessary, by the provision of infrastructure, services and facilities that are required to maintain and enhance the quality of life and responds to the needs of local people, the local environment and the local economy. Development will be expected to provide, or contribute towards, the provision of measures to directly mitigate its impact, either geographically or functionally.

Policy DM21: Walking and Cycling Policy DM2 Achieving High quality Design

Support bicycling Support active travel. The draft design The site allowance has been increased policy includes need to include sufficient by 1% on all sites to allow for the

69 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

space for cycle storage – this could inclusion of sheds for the storage of mean space external to a building. bicycles to cover this and other costs.

There is a requirement for development The Management Plan sets out the to be in line with the AONB Management objectives of the AONB and talks about Plan how they may be delivered. It does not contain development management type policies.

Policy DM23: Transport Efficiency and Travel Plans

The policy requires that development This is assumed to be within the normal proposals may need a ‘Transport costs of development. Assessment’ or ‘Transport Statement’ dependent on the size, nature, scale, location and potential impact.

DM13 – Housing Development in This policy provides some further detail Small Villages and Hamlets but not other requirements.

DM11– Accessible and Adaptable Homes

New homes must be designed and This policy does not go as far as the constructed in a way that enables them requirement for all houses to be to be adapted to meet the changing adaptable so has not been modelled. needs of their occupants over time.

The Council will require all new homes These requirements are covered by the on sites of 10 or more units to meet the costing set out above in relation to optional Building Regulations lifetime homes standards. Requirement M4: Category 2 – The SLDC policy goes beyond national Accessible and Adaptable Dwellings. standards requiring all homes to be Policy currently states ‘delivering an accessible and adaptable. These inclusive design and layout; that meets requirements are similar to the existing needs and is accessible for all requirements of the Lifetime Homes as well as sustainable’ Standard. The additional costs of This wording remains under developing to the Lifetime Homes 2 consideration and it is likely that it will be Standards is about an additional £11/m . amended to deliver inclusive design and This additional cost has been applied to layouts in the general requirements the base appraisals. These requirements policy are similar to the requirements of the Lifetime Homes Standard. The additional costs of developing to the Lifetime Homes Standards is about an additional

70 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

£11/m 2. This additional cost has been applied to the base appraisals.

Policy DM41: New Residential DMxx – Affordable Housing Site AS04 –Housing Provision Development Thresholds. This policy has not been taken forward into the AONB DPD. THE MODELLING IS BASED ON THE ADDOTED POLICY IN THE CORE STRATEGY The policy requires the following Proposals for residential development The Policy requires that 50% of housing This policy is assumed to apply across affordable housing: will be expected to provide affordable on new developments is affordable all sites. On sites below the national Units Location Affordable housing in accordance with the following unless demonstrably unviable. The threshold for on site provision (those of 6 Housing criteria: remaining 50%, or any non-affordable to 10 units) the modelling assumes on housing where 50% is demonstrably site provision as any commuted sum 15 plus Urban 30%* unviable, is required to directly reflect would be a broadly equivalent cost. In 10 plus Rural 30%* identified local needs (types, tenures, line with national policy no affordable 5 to 14 Urban Up to 20% sizes etc) based on current housing housing is modelled on sites below the needs evidence at the time national threshold. 5 to 9 Rural Up to 20% 1 to 4 Urban & Up to 10% rural

On all schemes of nine or more dwellings An option is modelled where the first in the Principal/Key Service Centres, and 20% of affordable housing is provided as three or more dwellings outside of these starter homes. areas, no less than 35% of the total number of dwellings proposed are affordable. (None of the settlements within the AONB are Principal/Key Service Centres).

Policy DM35: Key Design Principles DM11– Accessible and Adaptable Homes

Policy DM28: Development and DM2 – Achieving High Quality Design AS02 – Landscape Landscape Impact The Landscape and Development Strategy policies have been split into two separate policies – the Development Strategy policy is about location of development and approach to major development)

71 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Development proposals should, through This is a broad policy that covers the full This is a broad policy that requires It is accepted that the requirements of their siting, scale, massing, materials and range of design requirements building on 'development to be in keeping with the this policy do add to the costs of design seek to contribute positively to the the policies above. character of the landscape, reflecting development but to over and above the conservation and enhancement of the local distinctiveness, vernacular style, costs of reflected in the BCIS costs used protected landscape. scale, features and building materials'. in this report. Requires LVIA to accompany all The professional fees have been development proposals increased from 10% to 11% to reflect the additional costs.

Development proposals which are This policy is about considering a list of considered, due to their scale or location, issues have been met. This goes to have potential adverse impacts on the beyond the normal requirements when local landscape and local character will submitting a planning application. The expected to be accompanied by a professional fees have been increased Landscape and Visual Impact from 10% to 11% Assessment (LVIA). The LVIA should systematically assess the effects of change on the landscape, both landscape and visual effects, as a consequence of a development proposal.

Policy DM35: Key Design Principles AS09 – Design

New development should make a This is a broad policy that covers the full It is accepted that the requirements of positive contribution to the surrounding range of design requirements building on this policy do add to the costs of landscape or townscape. The council will the policies above. development but to over and above the expect development (new build, costs of reflected in the BCIS costs used conversions, alterations or extensions) to in this report. address a broad range of requirements. Lancaster Heritage policies? DM3 Historic Environment AS08 Historic Environment It is accepted that the requirements of Adds to Core Strategy policy but Some specifics that are not included in this policy do add to the costs of essentially just interprets existing DM3 (see left) but remain an development but to over and above the requirements of the NPPF interpretation of NPPF requirements as costs of reflected in the BCIS costs used appropriate to AONB in this report.

Policy DM38: Development and Flood DM6 – Water disposal, watercourses, Risk & Policy DM39: Surface Water flood defences and consideration of Run-Off and Sustainable Drainage wider land drainage interests

The policy requires SUDS where The policy requires SUDS where SUDS and the like can add to the costs needed. needed. of a scheme – although in larger projects these can be incorporated into public open space. SUDS are assumed to be

72 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

included in the additional 5% costs of construction on brownfield sites, however on the larger greenfield sites it is assumed that SUDS will be incorporated into the green spaces and be delivered through soft landscaping within the wider site costs.

AS13 –Water quality, sewerage and sustainable drainage

The policy now states: This is an additional cost of For development that requires new development. The site allowance has septic tank infrastructure or the been increased by 1% on all sites to replacement or upgrade of a septic tank, cover this and other costs. a higher than average standard of sewage treatment is required to mitigate against impacts on the vulnerable groundwater in the area. In these circumstances, the following treatment is necessary and enforceable by the Environment Agency: (I) Full biological treatment in a proprietary unit; (II) Discharge to an associated soakaway or drainage field constructed to the requirements of section H2 of the Building Regulations.

Policy DM36: Sustainable Design

The Policy does not go beyond the This is not an additional cost to requirements of national standards. development.

Policy DM25: Green Infrastructure & DM4– Green Infrastructure, Open AS05 – Natural Environment Policy DM26: Open Space, Sports and Space, Trees and Landscaping AS06 Public Open Space and Recreational Facilities Recreation

The majority of the requirements of this The majority of the requirements of this The majority of the requirements of this policy are normal and do not add to the policy are normal and do not add to the policy are normal and do not add to the costs of development. costs of development. costs of development.

Development proposals should The Policy requires minimum amounts of The modelling in this study is based on incorporate new and / or enhanced open space. the site areas and numbers on units

73 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

green spaces of an appropriate type, provided by the Councils and are standard, size and reflects the needs for assumed to be consistent with these the area as set out within the council’s requirements. ‘PPG17 Open Space Assessment’ or successor documents. Where on-site provision has been demonstrated not to be possible, or the council is satisfied that on-site provision is not beneficial or appropriate, financial contributions will be sought towards the creation of new facilities off-site or to enhance and improve existing provision to meet the needs of the community.

In addition, the SLDC policy requires a £200/bedspace financial contribution towards open space. This assumed to be within the CIL and s106 contributions modelled as set out in Chapter 5.

DM8 – High Speed Broadband for New Developments

The policy requires applicants to include This is an additional costs and is covered a connectivity statement. in the increase in professional fees set out above. Source: LCC and SLDC planning documents

74 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

7.4 It is notable that the policies within the AONB do not actually go much further than the LCC and SLDC district wide policies.

7.5 The Arnside & Silverdale Area of Outstanding Natural Beauty Statutory Management Plan 2014 – 2019 is, as the name suggests, a statutory document that sets out the objectives of the AONB and talks about how they may be delivered. It does not contain development management type policies.

75 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

76 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

8. Modelling

8.1 The previous chapters set out the general assumptions to be inputted into the development appraisals. This chapter sets out the modelling. It is timely to stress that this is a high level study that is seeking to capture the generality rather than the specific. The purpose is to establish the cumulative impact of the Councils’ policies on development viability. This information will be used with the other information gathered by the Councils to assess whether or not the sites are actually deliverable.

8.2 In this context it is important to note that the PPG is very clear saying it is not necessary to test every site in the Plan:

Should every site be tested? Assessing the viability of plans does not require individual testing of every site or assurance that individual sites are viable; site typologies may be used to determine viability at policy level. Assessment of samples of sites may be helpful to support evidence and more detailed assessment may be necessary for particular areas or key sites on which the delivery of the plan relies’ PPG ID: 10-006-20140306

8.3 The approach is to model a set of residential development sites that are broadly representative of the type of development that is likely to come forward in AONB DPD. There are 9 residential allocations within the Plan as summarised below.

Table 8.1 Summary of AONB DPD Allocations

Units Area Ha 0 Gross Net 1 Land Behind Queen's Drive Arnside 8 0.11 0.10 2 Hollins Lane Arnside 8 0.12 0.11 3 Briery Bank - Persimmon Site Arnside 14 0.29 0.26 4 Sandside Road Sandside 40 1.50 1.20 5 Land on Church Street Beetham 6 0.20 0.18 6 Land West of Beetham C Of E Primary Sch Beetham 4 0.10 0.08 7 South of Whinney Fold Silverdale 6 0.30 0.27 8 North West of Sand Lane 1 Warton 12 0.40 0.32 9 North of 17 Market Street Warton 16 0.53 0.53 Source: LCC & SLDC

8.4 About half the sites are greenfield and the rest are greenfield or of mixed use.

8.5 It is acknowledged that modelling is never totally representative, however the aim of this work is to broadly test development viability of sites likely to come forward over the plan-period. This will assist with developing the Plan and the policies within it. The work is high level, so there are likely to be sites that will not be able to deliver the affordable housing target and

77 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

indeed as set out at the start of this report, there are some sites that will be unviable even without any policy requirements (for example brownfield sites with high remediation costs).

8.6 The modelling is summarised as follows. It is important to note that some sites are very much larger than the element that is appropriate for development. The modelling in the study is based on the anticipated numbers of units and the site areas as assessed by the Councils. The mix of housing is also based on advice from the Councils – informed by the physical nature of each site:

78 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 8.2 Summary of modelled sites – areas and densities

2,596

3,538

1,911

4,650

2,789

2,924

4,271

6,630

5,566

m2/ha

Density

Net

30.19

37.50

22.22

50.00

33.33

33.33

53.85

74.07

80.81

30.19

30.00

20.00

40.00

30.00

26.67

48.28

66.67

72.73

Gross

Density Units/ha

Net

0.53

0.32

0.27

0.08

0.18

1.20

0.26

0.11

0.10

Area Ha Area

0.53

0.40

0.30

0.10

0.20

1.50

0.29

0.12

0.11

Gross

6

4

6

8

8

16

12

40

14

Units

Agricultural

Agricultural

Agricultural

Agricultural

Agricultural

Pub / Ind/Pub

Vacant

Agricultural

Garages

Current Use Current

Green

Green

Green

Green

Green

Brown

Green

Green

Mixed

Warton

Warton

Silverdale

Beetham

Beetham

Sandside

Arnside

Arnside

Arnside

North of 17 Market Street of17Market North

North West of Sand Lane 1 Lane ofSand West North

South of Whinney Fold ofWhinney South

Land West of Beetham C Of E Primary Sch Primary OfE C ofBeetham West Land

Land on Church Street Church on Land

Sandside Road Sandside

Briery Bank - Persimmon Site Site Persimmon - Bank Briery

Hollins Lane Hollins

Land Behind Queen's Drive Queen's Behind Land

9

8

7

6

5

4

3

2 1

Source: HDH 2016

79 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

80 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

9. Residential Appraisals

9.1 At the start of this chapter it is important to stress that the results of the appraisals do not, in themselves, determine policy. The results of this study are one of a number of factors that the Councils will consider, including the need for infrastructure, other available evidence, such as the Councils’ track record in delivering affordable housing and collecting payments under s106, and, importantly, the results of the consultation process with developers. The purpose of the appraisals is to provide an indication of the viability in different areas under different scenarios. In due course, the SLDC will also have to take a view as to whether or not to revise CIL rates, and LCC will need to decide whether to proceed with setting a CIL.

9.2 The appraisals use the residual valuation approach – that is, they are designed to assess the value of the site after taking into account the costs of development, the likely income from sales and/or rents and an appropriate amount of developers’ profit. The Residual Value would represent the maximum bid for the site where the payment is made in a single tranche on the acquisition of a site. In order for the proposed development to be described as viable, it is necessary for this value to exceed the Existing Use Value by a satisfactory margin. This is discussed in Chapter 5 above.

9.3 In order to assist the Councils, several sets of appraisals have been run. The appraisals’ main output is the Residual Value. The Residual Value is calculated using the formula set out in Chapter 2 above.

9.4 Development appraisals are sensitive to changes in price so appraisals have been run with various changes in the cost of construction and an increase and decrease in prices.

9.5 As set out above, for each development type the Residual Value has been calculated. In the tables in this chapter the results are colour coded using a simple traffic light system:

a. Green Viable – where the Residual Value per hectare exceeds the indicative Viability Threshold Value per hectare (being the Existing Use Value plus the appropriate uplift to provide a competitive return for the landowner). b. Amber Marginal – where the Residual Value per hectare exceeds the Existing Use Value or Alternative Use Value, but not Viability Threshold Value per hectare. These sites should not be considered as viable when measured against the test set out – however, depending on the nature of the site and the owner, they may come forward. c. Red Non-viable – where the Residual Value does not exceed the Existing Use Value or Alternative Use Value.

9.6 The results are set out and presented for each site and per gross hectare to allow comparison between sites.

9.7 It is important to note that a report of this type applies relatively simple assumptions that are broadly reflective of an area to make an assessment of viability. The fact that a site is shown

81 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

as viable, does not necessarily mean that it will come forward and vice versa. An important part of any final consideration of viability will be relating the results of this study to what is actually happening on the ground in terms of development and what planning applications are being determined – and on what basis.

9.8 The detailed appraisal base results are included in Appendix 3.

Base Appraisals – full draft policy requirements

9.9 The financial appraisals for each of the sites are based on the policy assumptions summarised as follows:

a) Affordable Housing On sites of 6 units and larger – 30% in LCC and on sites of 3 and larger - 35% in SLDC. b) Environmental Standards Enhanced Building Regulations (Part L) (BCIS +2%). Accessible and adaptable £11/m2. c) CIL and s106 £2,500 per unit (market and affordable) and CIL at £50/m2 in SLDC area and zero in the LCC area.

82 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 9.1 Residential Development – Residual Values

Site

65,108

73,006

29,541

83,940

152,537

458,797

243,952

134,497

-152,803

Net Net ha

122,845

228,144

564,952

369,268

466,336

382,331

938,276

1,245,342

-1,543,466

Residual Value (£) Value Residual

122,845

182,515

508,457

295,414

419,702

305,865

841,213

Gross ha

1,120,807

-1,389,119

6

4

6

8

8

16

12

40

14

Units

1.2

Net

0.53

0.32

0.27

0.08

0.18

0.26

0.108

0.099

Area (ha) Area

0.4

0.3

0.1

0.2

1.5

0.53

0.29

0.12

0.11

Gross

Agricultural

Agricultural

Agricultural

Agricultural

Agricultural

Pub Pub / Ind

Vacant

Agricultural

Garages

Green

Green

Green

Green

Green

Brown

Green

Green

Mixed

Warton

Warton

Silverdale

Beetham

Beetham

Sandside

Arnside

Arnside

Arnside

North of 17 Market 17 Street of North

North West1 North Lane Sand of

South of Whinney South Fold of

Land West E Land Of Beetham C Primary Schof

Land on Church Street Church on Land

Sandside Road Sandside

Briery Briery Bank Persimmon - Site

Hollins Hollins Lane

Land Behind Queen's Drive Queen's Behind Land

Site 9

Site 8

Site 7

Site 6

Site 5

Site 4

Site 3 Site 2 Site 1 Source: AONB DPD Viability Study, September 2016

83 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

9.10 The results vary across the modelled sites, although this is largely due to the different assumptions around the nature of the site. The additional costs associated with brownfield sites also result in significantly lower Residual Values. The Residual Value is not a good indication of viability by itself, being simply the maximum price a developer may bid for a parcel of land and still make an adequate return (competitive return). In the following tables we have compared the Residual Value with the Viability Threshold. The Viability Threshold being an amount over and above the Existing Use Value that is sufficient to provide the willing landowner with a competitive return and induce them to sell the land for development as set out in Chapter 5 above.

Table 9.2 Residual Value compared to Viability Threshold

Alternative Viability Residual

Use Value Threshold Value Site 1 Land Behind Queen's Drive Arnside 400,000 480,000 -1,389,119 Site 2 Hollins Lane Arnside 50,000 460,000 1,120,807 Site 3 Briery Bank - Persimmon Site Arnside 50,000 460,000 841,213 Site 4 Sandside Road Sandside 400,000 480,000 305,865 Site 5 Land on Church Street Beetham 50,000 460,000 419,702 Site 6 Land West of Beetham C Of E Beetham 50,000 460,000 295,414 Primary Sch Site 7 South of Whinney Fold Silverdale 50,000 460,000 508,457 Site 8 North West of Sand Lane 1 Warton 50,000 460,000 182,515 Site 9 North of 17 Market Street Warton 25,000 430,000 122,845 Source: AONB DPD Viability Study, September 2016

9.11 All the sites other than the small scheme on the Land Behind Queen’s Drive generate a positive residual value, but not one that is always in excess of the viability threshold.

9.12 The results for Land Behind Queen’s Drive are negative. This is in line with the earlier SLDC work where brownfield sites were generally found to be unviable. This is due to the additional costs of developing previously developed land and the fact that this site is modelled as flats which are more expensive to develop than housing (although it is important to note that the site may not come forward as flats).

9.13 The remaining sites all generate positive residual values. It is notable that most have a greater capacity. A way of improving viability would be to increase the numbers of units (and the site size).

9.14 The above analysis is based on the 35% and 30% affordable housing targets that currently apply in the SDLC and LCC areas respectively.

9.15 It is relevant to note that the small 4 unit site to the west of Beetham Primary School has been modelled in line with the SLDC Core Strategy affordable housing policy threshold of three units

84 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

rather than the national threshold of 6 units. Were it to be modelled without affordable housing (i.e. in line with the national threshold) the residual value would be £1.420,684ha.

9.16 The proposed policy wording is for 50% affordable housing. In the following tables the results of the appraisals run at 0% to 50% affordable are set out. These are followed by similar analysis where Starter Homes are incorporated into the sites.

Varied Affordable Housing Requirements

9.17 The following table repeats the analysis set out above but for a range of affordable housing targets:

85 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 9.3 Residual Value compared to Viability Threshold – Varied Affordable

Housing

50.0%

35.0%

15.0%

23,425

96,708

26,437

370,049

366,704

-348,061

-316,271

-186,844

-1,979,538

45.0%

31.5%

13.5%

-26,092

100,844

204,373

121,872

529,000

618,072

-270,272

-233,432

-1,782,732

40.0%

28.0%

12.0%

178,264

134,661

312,038

214,499

685,107

869,440

-192,548

-152,484

-1,585,926

35.0%

24.5%

10.5%

-72,140

255,683

295,414

419,702

305,865

841,213

-117,068

1,120,807

-1,389,119

9.0%

8,205

30.0%

21.0%

-41,588

333,102

456,167

527,367

397,230

993,510

1,369,814

-1,194,933

7.5%

25.0%

17.5%

33,892

88,550

410,522

616,920

635,032

488,595

1,145,219

1,616,325

-1,001,228

6.0%

20.0%

14.0%

109,372

168,895

487,941

777,672

742,697

579,961

-807,524

1,296,928

1,862,835

4.5%

15.0%

10.5%

184,852

249,240

564,097

938,425

848,422

671,326

-613,820

1,448,638

2,108,613

7.0%

3.0%

10.0%

260,333

329,585

640,021

954,006

762,692

-425,109

1,099,178

1,600,347

2,348,179

5.0%

3.5%

1.5%

334,792

409,255

715,944

854,057

-237,227

1,259,931

1,059,591

1,752,056

2,587,746

0.0%

0.0%

0.0%

Value

-49,345

408,814

488,047

791,867

945,423

Residual Residual

1,420,684

1,165,175

1,903,765

2,827,312

430,000

460,000

460,000

460,000

460,000

480,000

460,000

460,000

480,000

Viability

Threshold

25,000

50,000

50,000

50,000

50,000

50,000

50,000

400,000

400,000

Use Use Value

Alternative Alternative

Warton

Warton

Silverdale

Beetham

Beetham

Sandside

Arnside

Arnside

Arnside

Affordable Rent Affordable

Total Affordable

Intermediate Housing Intermediate

North of 17 Market 17 Street of North

North West 1 North Lane Sand of

South of Whinney South of Fold

Land West Land E Beetham Of C Primary of Sch

Land on Church Street Church on Land

Sandside Road Sandside

Briery Briery Bank - Persimmon Site

Hollins Hollins Lane

Land Behind Queen's Drive Queen's Behind Land

Site 9

Site 8

Site 7

Site 6

Site 5

Site 4

Site 3 Site 2 Site 1 Source: AONB DPD Viability Study, September 2016

86 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

9.18 The analysis shows, as would be expected, that as the amount of affordable housing reduces the Residual Values increases. It is clear that the proposed 50% affordable housing target would not be deliverable.

9.19 This is discussed further in the next chapter.

Impact of Starter Homes

9.20 The following table repeats the analysis set out above but for a range of affordable housing targets, where the first 20% of the housing is provided as Starter Homes:

87 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Table 9.4 Residual Value compared to Viability Threshold – Varied Affordable

Housing, with the provision of Starter Homes

50.0%

30.0%

20.0%

90,623

141,919

273,341

172,789

593,155

759,534

-224,211

-191,643

-1,644,396

45.0%

25.0%

20.0%

229,680

275,591

396,421

276,462

768,485

-141,076

-104,488

1,045,185

-1,418,341

40.0%

20.0%

20.0%

-58,860

-17,333

317,441

460,559

519,501

380,135

941,512

1,329,274

-1,194,518

35.0%

15.0%

20.0%

23,356

69,822

405,201

645,527

642,581

483,807

-971,997

1,111,902

1,609,405

30.0%

10.0%

20.0%

105,572

156,976

492,962

830,495

765,359

587,480

-749,477

1,282,293

1,889,537

5.0%

25.0%

20.0%

187,789

244,131

579,163

886,061

691,153

-528,397

1,015,463

1,452,683

2,167,236

0.0%

20.0%

20.0%

270,005

331,286

665,228

794,825

-312,544

1,200,431

1,006,762

1,623,074

2,439,476

0.0%

15.0%

15.0%

304,896

371,033

696,888

832,475

-246,744

1,255,495

1,046,365

1,693,247

2,536,435

0.0%

10.0%

10.0%

339,535

410,089

728,547

870,124

-180,945

1,310,558

1,085,969

1,763,420

2,633,394

5.0%

0.0%

5.0%

374,175

449,068

760,207

907,773

-115,145

1,365,621

1,125,572

1,833,593

2,730,353

0.0%

0.0%

0.0%

Value

-49,345

408,814

488,047

791,867

945,423

Residual Residual

1,420,684

1,165,175

1,903,765

2,827,312

430,000

460,000

460,000

460,000

460,000

480,000

460,000

460,000

480,000

Viability

Threshold

25,000

50,000

50,000

50,000

50,000

50,000

50,000

400,000

400,000

Use Use Value

Alternative Alternative

Warton

Warton

Silverdale

Beetham

Beetham

Sandside

Arnside

Arnside

Arnside

Starter Starter Homes

Affordable Rent Affordable

Total Affordable

North of 17 Market 17 Street of North

North West 1 North Lane Sand of

South of Whinney South of Fold

Land West Land E Beetham Of C Primary of Sch

Land on Church Street Church on Land

Sandside Road Sandside

Briery Briery Bank - Persimmon Site

Hollins Hollins Lane

Land Behind Queen's Drive Queen's Behind Land

Site 9

Site 8

Site 7

Site 6

Site 5

Site 4

Site 3 Site 2 Site 1 Source: AONB DPD Viability Study, September 2016

88 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

9.21 The results where the mix of housing includes Starter Homes are notably better than when tested under the policy mix of 30% intermediate housing and 70% affordable rent as shown in Table 9.3 compared to Table 9.4. At 35% affordable housing (20% Starter Homes, 15% Affordable Rent) the Residual Value is, on average, £315,000/ha higher on the SLDC sites, this is a little under a 50% increase.

9.22 At 30% affordable Housing (20% Starter Homes, 10% Affordable Rent) the Residual Value is, on average, £150,000/ha higher on the LCC sites, this is about a 40% increase. The AONB DPD is currently proposing a 50% affordable housing target where the affordable housing is 20% Starter Homes and the balance affordable housing for rent. This requirement would only be deliverable on two of the nine allocations.

9.23 This is discussed further in the next chapter.

89 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

90 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

10. Conclusions

10.1 This document sets out the methodology used, the key assumptions adopted, and the results, and has been prepared to assist the Councils with the assessment of the viability of the emerging Local Plan. The NPPF, the PPG, the CIL Guidance and the Harman Viability Guidance all require stakeholder engagement – particularly with members of the development industry.

Cumulative Impact of Policies

10.2 In Chapters 10 and 11, the results of a range of appraisals considering the impact on viability of individual policies and the different levels of developer contributions that residential development can bear, are set out. The purpose of this analysis is to inform the plan-making process. As set out in Chapter 2 above, the NPPF introduced a requirement to assess the viability of the delivery of a Local Plan document and the impact on development of policies contained within it saying:

173. Pursuing sustainable development requires careful attention to viability and costs in plan - making and decision-taking. Plans should be deliverable. Therefore, the sites and the scale of development identified in the plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened. To ensure viability, 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.

10.3 This needs to be considered with the fourth bullet point of paragraph 182 of the NPPF that requires that the Plan is effective.

10.4 The principle cost to development in the draft Arnside & Silverdale Area of Outstanding Natural Beauty Development Plan Document is the affordable housing policy. The other policies are required to protect and enhance the AONB area so there is little (if any) flexibility concerning their implementation.

10.5 The current proposed wording is for a 50% affordable housing target. The analysis set out Table 9.3 indicates that no sites would be viable under this policy (although if the national affordable housing thresholds was applied, the Land West of Beetham Road Primary School would be shown as viable).

10.6 Even at the Councils’ current adopted affordable targets of 35% in SLDC, and 30% in LCC, a number of sites are unviable. The Land behind Queens Drive and the site at the Sandisde Road are both unviable. Both these sites are brownfield sites with higher development costs; further, the Land behind Queens Drive is modelled as development of flats (although it may come forward as houses) which are more expensive (under the BCIS costs) to construct than housing. The findings suggest that there is limited prospect of the Land behind Queens Drive coming forward.

91 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

10.7 On balance however, bearing in mind the flexibility built into the SLDC policy, a 35% affordable housing target is unlikely to put the Development Plan at serious risk. It is notable and relevant that SLDC currently achieve the 35% affordable housing target on almost all sites. This is real evidence that the 35% affordable housing is working.

10.8 In LCC the values are lower than in the SLDC area this is reflected in the results. Even at the lower 30% affordable, none of the three LCC sites are viable. This must raise doubts about their deliverability in the current market.

10.9 When considering these results, the Councils will need to consider the other information that they have on these sites. Some sites, for example may be owned by the Councils or by a Housing Association and have been identified for 100% affordable housing schemes. Likewise, some landowners may have been considering bringing land forward in a context where ‘competitive return’ is approached quite differently.

10.10 The above results give rise to a question about the priorities of the Arnside & Silverdale Area of Outstanding Natural Beauty (AONB) Development Plan Document. Is it a Plan with a primary aim to conserve and enhance the AONB, or is a Plan to deliver housing? It is beyond the scope of this report to address this, however, at least in part, the answer will depend on whether the Councils are relying on the AONB sites to demonstrate their five-year land supplies. If the AONB sites are an element of the five-year land supplies, then it would be necessary to reconsider the policies and allocations and in particular the proposed 50% affordable housing target.

Starter Homes

10.11 Later this year (2016) the Government is expected to publish the Starter Homes Regulations. Until publication, it is not possible to know what proportion of new development will be required to be Starter Homes and the site size thresholds. Table 10.4 shows the results where Starter Homes are provided as the first element of the affordable housing. The results are notably better, particularly in the SLDC area (as this is the area where values are better).

10.12 The Councils should be cautious about building policy based on this analysis prior to the publication of the relevant Regulations.

92 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Appendix 1 – Land Registry PPD & EPC Data

Date Price Paid Type New Street Locality Tow n District m2 £/m2 03/01/2014 £248,500 D N 4 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BX 96 £2,589 GARDENS 15/01/2014 £430,000 D N FAYRESTOWE, 49 CHURCH HILL ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DW 144 £2,986 21/01/2014 £850,000 D N PENHALE NEW BARNS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BD 326 £2,607 ROAD 14/02/2014 £185,000 D N 14 SPRINGFIELD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BT 59 £3,136 20/02/2014 £250,000 D N EDALE HOLLINS LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EQ 28/02/2014 £175,000 D N 8 SPRINGFIELD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BT 105 £1,667 28/02/2014 £180,000 D N 9 BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HH 82 £2,195 ROAD 09/04/2014 £365,000 D N WOODLANDS NEW BARNS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BL 109 £3,349 CLOSE 15/04/2014 £308,000 D N 3 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BX 131 £2,351 GARDENS 17/04/2014 £185,000 D N 10 SPRINGFIELD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BT 103 £1,796 23/04/2014 £210,000 D N 1 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BY 99 £2,121 DRIVE 22/05/2014 £560,000 D N THE SLIPWAY REDHILLS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BW 262 £2,137 ROAD 11/07/2014 £267,500 D N 22 PARKSIDE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BU 110 £2,432 DRIVE 18/07/2014 £191,000 D N 2 BRIERY BANK BRIERY BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EF 96 £1,990 HOUSE, 38 21/07/2014 £250,000 D N GOWAN BRAE ASHLEIGH ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HE 115 £2,174 ROAD 08/08/2014 £257,500 D N 12 LAWRENCE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BJ 119 £2,164 DRIVE 05/09/2014 £270,000 D N ASH MEADOW HOLLINS LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EG 10/09/2014 £150,000 D N 8 BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HH 78 £1,923 ROAD 12/09/2014 £185,000 D N 3 BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HH 79 £2,342 ROAD 12/09/2014 £217,000 D N 14 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HT 63 £3,444 AVENUE 03/10/2014 £245,000 D N SUNNYHILLS BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HZ ROAD 18/11/2014 £187,500 D N 57 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HX 78 £2,404 AVENUE 28/11/2014 £297,500 D N THE OUTLOOK BACK LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BS 143 £2,080

93 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

16/12/2014 £260,000 D N 99 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EH 96 £2,708 ROAD 19/12/2014 £523,000 D N BRIDLEWAY KNOTT ROAD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AZ 224 £2,335 07/01/2015 £277,500 D N KNOTTSIDE, 65 REDHILLS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AY ROAD 07/01/2015 £700,000 D N HILL COTTAGE BRIERY BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0ED 28/01/2015 £285,000 D N 24 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AP 99 £2,879 CLOSE 30/01/2015 £320,000 D N 9 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BX 83 £3,855 GARDENS 27/03/2015 £377,500 D N RIVERMEDE NEW BARNS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BH 113 £3,341 ROAD 02/04/2015 £462,500 D N HOLLYOAK NEW BARNS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BB 186 £2,487 ROAD 24/04/2015 £415,000 D N THE ORCHARD REDHILLS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AN 200 £2,075 ROAD 27/04/2015 £185,000 D N 52 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HX 60 £3,083 AVENUE 30/04/2015 £392,000 D N 34 BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HL 157 £2,497 ROAD 14/05/2015 £272,000 D N 10 LAWRENCE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BJ 86 £3,163 DRIVE 01/06/2015 £275,000 D N 8 PARKSIDE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BU 112 £2,455 DRIVE 05/06/2015 £242,000 D N 27 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HU 123 £1,967 AVENUE 16/06/2015 £345,000 D N FARFIELDS HOLLINS LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EG 158 £2,184 02/07/2015 £246,000 D N 10 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BY DRIVE 28/07/2015 £305,000 D N 91 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EH 160 £1,906 ROAD 21/08/2015 £395,000 D N WESTERLEY NEW BARNS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BL CLOSE 18/09/2015 £330,000 D N THE COTTAGE, 18 BRIERY BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EF 188 £1,755 09/10/2015 £350,000 D N 28 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DT 154 £2,273 ROAD 09/10/2015 £260,000 D N 6 STONYCROFT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EE 95 £2,737 DRIVE 12/10/2015 £345,000 D N HIGH LEIGH ORCHARD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DP 128 £2,695 ROAD 23/10/2015 £275,000 D N BIRCHWOOD FAR CLOSE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BG DRIVE 12/11/2015 £409,500 D N WESTERLEY NEW BARNS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BL 105 £3,900 CLOSE 03/12/2015 £250,000 D N EDALE HOLLINS LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EQ 69 £3,623

94 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

04/12/2015 £210,000 D N 34 SWINNATE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HR 77 £2,727 ROAD 15/12/2015 £345,000 D N 10 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BY 132 £2,614 DRIVE 28/01/2016 £365,000 D N 39 BRIERY BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HN 141 £2,589 01/02/2016 £270,000 D N 20 PARKSIDE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BU 142 £1,901 DRIVE 03/02/2016 £215,000 D N 16 LAWRENCE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BJ 73 £2,945 DRIVE 19/02/2016 £250,000 D N 2 LAWRENCE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BJ 111 £2,252 DRIVE 24/03/2016 £258,000 D N 6 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BX 91 £2,835 GARDENS 24/03/2016 £190,000 D N 17 BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HJ 80 £2,375 ROAD 31/03/2016 £1,100,000 D N STONYCROFT STONYCROFT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EE 505 £2,178 DRIVE 15/04/2016 £265,000 D N 22 SWINNATE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HR 110 £2,409 ROAD 29/04/2016 £255,000 D N 36 BLACK DYKE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HL 80 £3,188 ROAD 18/11/2014 £187,500 D N 57 PLANTATION ARNSIDE CARNFORTH LANCASTER LA5 0HX 75 £2,500 AVENUE 31/01/2014 £169,000 F N FLAT 6 HERONS REACH PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AD 54 £3,130 06/02/2014 £249,999 F N 1 SANDHURST, 47 PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AD 78 £3,205 07/02/2014 £202,000 F N FLAT 2 HERONS REACH PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AD 75 £2,693 04/04/2014 £150,000 F N UPPER FLAT BEACH VIEW ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AX 07/04/2014 £365,000 F N APARTMENT THE GRANGE KNOTT LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BP 135 £2,704 15 30/04/2014 £367,500 F N APARTMENT THE GRANGE KNOTT LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BP 101 £3,639 6 02/05/2014 £220,000 F N FLAT 1 HOWGILL, 24 CHURCH HILL ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DJ 77 £2,857 19/06/2014 £139,950 F N FLAT 31 ASHLEIGH COURT STATION ROAD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0JH 58 £2,413 06/08/2014 £445,000 F N APARTMENT THE GRANGE KNOTT LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BP 174 £2,557 20 09/08/2014 £165,000 F N 2 WINDRUSH HIGH KNOTT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AW 82 £2,012 ROAD 12/12/2014 £105,000 F N FLAT 3 HAZEL BANK, 4 CHURCH HILL ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DF 80 £1,313 17/12/2014 £271,700 F N FLAT 4 INGLEWOOD COURT PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AD 128 £2,123 06/01/2015 £180,000 F N FLAT 13 ASHLEIGH COURT STATION ROAD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0JH 61 £2,951 30/01/2015 £195,000 F N FLAT 1 SUMMERLEA, 5 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AG ROAD 30/01/2015 £530,000 F N APARTMENT THE GRANGE KNOTT LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BP 208 £2,548 19 02/02/2015 £111,000 F N 5 BRIERY BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HW 57 £1,947 24/03/2015 £219,000 F N FLAT 2 SHORTACRE, 42 PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AA 67 £3,269

95 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

27/03/2015 £224,000 F N 1 WOOD CLOSE SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AF 49 £4,571 GARDENS ROAD 31/03/2015 £400,000 F N APARTMENT THE GRANGE KNOTT LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BP 145 £2,759 1 23/06/2015 £209,000 F N FLAT 2 ASHLEIGH HOUSE ASHLEIGH ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HE ROAD 08/07/2015 £280,000 F N FLAT 2 BRAESIDE, 51 PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AD 78 £3,590 17/07/2015 £170,000 F N 4 NELSON ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0JE 61 £2,787 COURT 28/07/2015 £205,000 F N FLAT 5 HEATHCLIFFE REDHILLS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AT 66 £3,106 COURT ROAD 04/09/2015 £153,000 F N FLAT 2 BELMONT, 12 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AG 94 £1,628 ROAD 23/09/2015 £420,000 F N APARTMENT THE GRANGE KNOTT LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0BP 151 £2,781 4 01/02/2016 £180,500 F N FLAT 27 ASHLEIGH COURT STATION ROAD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0JH 50 £3,610 17/03/2016 £165,000 F N FLAT 26 ASHLEIGH COURT STATION ROAD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0JH 45 £3,667 22/03/2016 £142,500 F N FLAT 18 ASHLEIGH COURT STATION ROAD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0JH 57 £2,500 29/03/2016 £110,000 F N 8 BRIERY BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HW 59 £1,864 30/03/2016 £181,250 F N FLAT 2 INGLEWOOD COURT PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AD 55 £3,295 31/03/2016 £222,500 F N FLAT 12 HEATHCLIFFE REDHILLS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AT 114 £1,952 COURT ROAD 15/01/2014 £155,000 S N 14 KINGS CLOSE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DU 91 £1,703 21/02/2014 £250,000 S N BOULDERS MOUNT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EW 113 £2,212 PLEASANT 04/04/2014 £80,000 S N 6 STEWART ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0ES 56 £1,429 CLOSE 07/04/2014 £213,500 S N 55 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HX 92 £2,321 AVENUE 10/04/2014 £195,000 S N 3 HOLLINS LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EG 89 £2,191 17/07/2014 £155,000 S N 15 QUEENS DRIVE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EA 98 £1,582 21/07/2014 £339,000 S N HILLBERRY HOLLINS LANE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EQ 141 £2,404 04/08/2014 £240,000 S N GATESGARTH ORCHARD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EU 117 £2,051 CRESCENT 07/10/2014 £230,000 S N 5 ORCHARD ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EU 86 £2,674 CRESCENT 16/12/2014 £160,000 S N 1 PROMENADE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HF 19/12/2014 £160,000 S N FLAT 2 ROCKHURST, 55 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DT 169 £947 ROAD 19/12/2014 £525,000 S N 52 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EH 274 £1,916 ROAD 22/12/2014 £185,000 S N FAIRFIELD ASHLEIGH ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HE 88 £2,102 ROAD 07/01/2015 £345,000 S N 16 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AH 171 £2,018 ROAD 20/01/2015 £180,000 S N 5 KINGS CLOSE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DU 92 £1,957

96 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

20/02/2015 £245,000 S N OLDFIELD, 42 CHURCH HILL ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DW 103 £2,379 11/03/2015 £360,000 S N 60 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EH 171 £2,105 ROAD 27/03/2015 £176,000 S N 32 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HU 89 £1,978 AVENUE 22/07/2015 £193,000 S N 1 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AP 86 £2,244 CLOSE 24/08/2015 £270,000 S N ACHILL, 61 CHURCH HILL ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DW 120 £2,250 01/10/2015 £180,000 S N WOODSLEA LYNSLACK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EL 84 £2,143 TERRACE 02/10/2015 £154,000 S N 44 PLANTATION ARNSIDE CA RNFORTH SOUTH LAKELAND LA5 0HX 81 £1,901 AVENUE 16/10/2015 £142,000 S N 5 LINGMEL THE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HF 74 £1,919 PROMENADE 20/11/2015 £290,000 S N 10 WOOD CLOSE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AF 117 £2,479 GARDENS 15/02/2016 £180,000 S N 5 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HT 56 £3,214 AVENUE 17/03/2016 £380,000 S N THE SHIELINGS HIGH KNOTT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AW 145 £2,621 ROAD 21/03/2016 £250,000 S N 17 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AP 98 £2,551 CLOSE 22/03/2016 £180,000 S N 60 PLANTATION ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0HX 85 £2,118 AVENUE 31/03/2016 £393,000 S N 109 SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EH 109 £3,606 ROAD 31/03/2016 £280,000 S N 7 THE SPINNEY ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EX 106 £2,642 21/03/2014 £159,000 T N 2 STEWART ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0ES 62 £2,565 CLOSE 02/04/2014 £195,000 T N 4 CHURCH VIEW ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DL 99 £1,970 COTTAGES 20/06/2014 £250,000 T N BEACH VIEW ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AX 141 £1,773 27/06/2014 £175,000 T N 1 PARK VIEW ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EB 89 £1,966 18/07/2014 £372,000 T N 3 BEACHMOUNT REDHILLS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AT 198 £1,879 ROAD 30/01/2015 £240,000 T N GARTH END MOUNT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EW 117 £2,051 PLEASANT 20/03/2015 £169,000 T N 1 THE MEADOWS ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EY 76 £2,224 27/03/2015 £169,000 T N 12 MEADOW BANK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DR 88 £1,920 13/05/2015 £475,000 T N HOLLYWOOD ASHMEADOW ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AE ROAD 16/06/2015 £200,000 T N 5 MOUNT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EW 78 £2,564 PLEASANT 13/08/2015 £150,000 T N 3 ROCK ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DE 130 £1,154 TERRACE

97 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

08/09/2015 £248,000 T N WOODCLOSE SILVERDALE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AB 128 £1,938 COTTAGE ROAD 14/03/2016 £425,000 T N BRANTHOLME MOUNT ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0EW 217 £1,959 PLEASANT 22/04/2016 £170,000 T N 2 CHURCH VIEW ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0DL 89 £1,910 COTTAGES 28/04/2016 £124,050 T N 32 INGLEMERE ARNSIDE CARNFORTH SOUTH LAKELAND LA5 0AP 76 £1,632 CLOSE 28/11/2014 £315,000 D N WOODVIEW BARN BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7AL 69 £4,565 21/03/2016 £425,000 D N BELA BANK STANLEY BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7AS 203 £2,094 STREET 18/07/2014 £145,000 F N 5 BEETHAM HOUSE BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7AP 55 £2,636 20/03/2015 £240,000 S N CHURCH VIEW BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7AL 83 £2,892 01/08/2014 £290,000 T N 5 PARSONAGE BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7RJ FOLD 18/05/2015 £262,500 T N 4 PARSONAGE BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7RJ 95 £2,763 FOLD 28/08/2015 £126,750 T N YEW TREE HOUSE BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7AL 89 £1,424 06/10/2015 £297,500 T N 5 PARSONAGE BEETHAM MILNTHORPE SOUTH LAKELAND LA7 7RJ 102 £2,917 FOLD

98 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

Appendix 2 – Base Appraisals

The pages in this appendix are not numbered.

99 Lancaster City Council & South Lakeland District Council Arnside & Silverdale AONB DPD Viability Study – October 2016

100 Base V2 Cover

SLDC/LCC AONB DPD Viability (v2)

15/10/2016 08:53 Modelling for Councils v2 Site make up

Number 1 Units NET Area Density erage Unit Size Developed Density Total Cost Rate Locality een/ BrownAlternative Use Units/ha m2 m2 m2/ha £/m2 Land Behind Queen's Drive 8 0.10 80.81 69 551 5,566 670,347 1,216.60 Arnside Mixed Garages

Beds No m2 Total BCIS COST Area Gross 0.110 Market 0 Net 0.099 Flat 1 0 59.5 0.00 10% 1,106 0 2 6 72.0 432.00 10% 1,106 525,571 Terrace 2 0 72.0 0.00 941 0 3 0 86.5 0.00 941 0 Semi 2 0 79.0 0.00 941 0 3 0 93.0 0.00 941 0 Det 3 0 102.0 0.00 941 0 4 0 115.0 0.00 941 0 5 0 130.0 0.00 941 0 Flat 1 High* 1 0 59.5 0.00 10% 1,422 0 Flat 2 High* 2 0 72.0 0.00 10% 1,422 0 Flat 3 High* 3 0 86.5 0.00 10% 1,422 0 Affordable Flat 1 2 59.5 119.00 10% 1,106 144,775 2 0 72.0 0.00 10% 1,106 0 Terrace 2 0 72.0 0.00 941 0 3 0 86.5 0.00 941 0 Semi 2 0 79.0 0.00 941 0 3 0 93.0 0.00 941 0 Det 3 0 102.0 0.00 941 0 4 0 115.0 0.00 941 0 5 0 130.0 0.00 941 0 Flat 1 High* 1 0 59.5 0.00 10% 1,422 0 Flat 2 High* 2 0 72.0 0.00 10% 1,422 0 Flat 3 High* 3 0 86.5 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 2 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 Hollins Lane 8 0.11 74.07 90 716 6,630 673,756 941.00 Arnside Green Agricultural

Beds No m2 Total BCIS COST Area Gross 0.120 Market 0 Net 0.108 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 0 79.00 0.00 941 0 3 6 93.00 558.00 941 525,078 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 2 79.00 158.00 941 148,678 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 3 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 Briery Bank - Persimmon Site 14 0.26 53.85 79 1,111 4,271 1,094,175 985.30 Arnside Green Vacant

Beds No m2 Total BCIS COST Area Gross 0.290 Market 0 Net 0.260 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 5 79.00 395.00 941 371,695 3 5 93.00 465.00 941 437,565 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 3 59.50 178.50 10% 1,106 217,163 2 0 72.00 0.00 10% 1,106 0 Terrace 2 1 72.00 72.00 941 67,752 3 0 86.50 0.00 941 0 Semi 2 0 79.00 0.00 941 0 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 4 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 Sandside Road 40 1.20 33.33 88 3,509 2,924 3,301,499 941.00 Sandside Brown Pub / Ind

Beds No m2 Total BCIS COST Area Gross 1.500 Market 0 Net 1.200 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 5 72.00 360.00 941 338,760 3 5 86.50 432.50 941 406,983 Semi 2 0 79.00 0.00 941 0 3 10 93.00 930.00 941 875,130 Det 3 0 102.00 0.00 941 0 4 4 115.00 460.00 941 432,860 5 2 130.00 260.00 941 244,660 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 10 72.00 720.00 941 677,520 3 4 86.50 346.00 941 325,586 Semi 2 0 79.00 0.00 941 0 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 5 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 Land on Church Street 6 0.18 33.33 84 502 2,789 472,382 941.00 Beetham Green Agricultural

Beds No m2 Total BCIS COST Area Gross 0.200 Market 0 Net 0.180 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 2 79.00 158.00 941 148,678 3 2 93.00 186.00 941 175,026 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 2 79.00 158.00 941 148,678 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 6 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 Land West of Beetham C Of E Primary 4 0.08 50.00 93 372 4,650 350,052 941.00 Beetham Green Agricultural

Beds No m2 Total BCIS COST Area Gross 0.100 Market 0 Net 0.080 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 0 79.00 0.00 941 0 3 4 93.00 372.00 941 350,052 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 0 79.00 0.00 941 0 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 7 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 South of Whinney Fold 6 0.27 22.22 86 516 1,911 485,556 941.00 Silverdale Green Agricultural

Beds No m2 Total BCIS COST Area Gross 0.300 Market 0 Net 0.270 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 2 79.00 158.00 941 148,678 3 3 93.00 279.00 941 262,539 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 1 79.00 79.00 941 74,339 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 8 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 North West of Sand Lane 1 12 0.32 37.50 94 1,132 3,538 1,065,212 941.00 Warton Green Agricultural

Beds No m2 Total BCIS COST Area Gross 0.400 Market 0 Net 0.320 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 0 79.00 0.00 941 0 3 0 93.00 0.00 941 0 Det 3 8 102.00 816.00 941 767,856 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 4 79.00 316.00 941 297,356 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Modelling for Councils v2 Site make up

Number 9 Units Area Density erage Unit Size Developed Density Total Cost Rate Localityreen/BrownAlternative Use ha Units/ha m2 m2 m2/ha £/m2 North of 17 Market Street 16 0.53 30.19 86 1,376 2,596 1,294,816 941.00 Warton Green Agricultural

Beds No m2 Total BCIS COST Area Gross 0.530 Market 0 Net 0.530 Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 4 79.00 316.00 941 297,356 3 8 93.00 744.00 941 700,104 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 58.00 0.00 10% 1,422 0 Flat 2 High* 2 0 70.00 0.00 10% 1,422 0 Flat 3 High* 3 0 84.00 0.00 10% 1,422 0 Affordable Flat 1 0 59.50 0.00 10% 1,106 0 2 0 72.00 0.00 10% 1,106 0 Terrace 2 0 72.00 0.00 941 0 3 0 86.50 0.00 941 0 Semi 2 4 79.00 316.00 941 297,356 3 0 93.00 0.00 941 0 Det 3 0 102.00 0.00 941 0 4 0 115.00 0.00 941 0 5 0 130.00 0.00 941 0 Flat 1 High* 1 0 59.50 0.00 10% 1,422 0 Flat 2 High* 2 0 72.00 0.00 10% 1,422 0 Flat 3 High* 3 0 86.50 0.00 10% 1,422 0

S:\HDH PLANNING\Clients\SDH Clients\SLDC\2016 Viability\Modelling for Councils v2 15/10/2016 Base V2 For Apps

Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Site 7 Site 8 Site 9 Land Behind Queen's Hollins Lane Briery Bank - Sandside Road Land on Church Land West of South of Whinney North West of Sand North of 17 Market Drive Persimmon Site Street Beetham C Of E Fold Lane 1 Street Green/brown field Mixed Green Green Brown Green Green Green Green Green Use Garages Agricultural Vacant Pub / Ind Agricultural Agricultural Agricultural Agricultural Agricultural Locality Arnside Arnside Arnside Sandside Beetham Beetham Silverdale Warton Warton

Site Area Gross ha 0.11 0.12 0.29 1.50 0.20 0.10 0.30 0.40 0.53 Net ha 0.10 0.11 0.26 1.20 0.18 0.08 0.27 0.32 0.53 Units 8 8 14 40 6 4 6 12 16

Average Unit Size m2 68.88 89.50 79.32 87.71 83.67 93.00 86.00 94.33 86.00

Mix Intermediate to Buy 10.50% 10.50% 10.50% 10.50% 10.50% 10.50% 9.00% 9.00% 9.00% Affordable Rent 24.50% 24.50% 24.50% 24.50% 24.50% 24.50% 11.00% 11.00% 11.00% Social Rent 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Price Market £/m2 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,050 2,050 Intermediate to Buy £/m2 1,690 1,690 1,690 1,690 1,690 1,690 1,690 1,333 1,333 Affordable Rent £/m2 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 1,050 Social Rent £/m2 950 950 950 950 950 950 950 950 950

Grant and Subsidy Intermediate to Buy £/unit Affordable Rent £/unit Social Rent £/unit

Sales per Quarter Unit Build Time 3 3 3 3 3 3 3 3 3

Alternative Use Value £/ha 400,000 50,000 50,000 400,000 50,000 50,000 50,000 50,000 25,000 Up Lift % % 20% 20% 20% 20% 20% 20% 20% 20% 20% Additional Uplift £/ha 400,000 400,000 400,000 400,000 400,000 400,000 400,000

Easements etc £ 0 0 0 0 0 0 0 0 0 Legals / Acquisition % land 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5% 1.5%

Planning Fee <50 £/unit 385 385 385 385 385 385 385 385 385 >50 £/unit 115 115 115 115 115 115 115 115 115

Architects % 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% QS / PM % 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Planning Consultants % 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% 1.00% Other Professional % 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50% 3.50%

Build Cost - BCIS Based £/m2 1,217 941 985 941 941 941 941 941 941 CfSH % 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% 1.50% Energy £/m2 Design £/m2 Lifetime £/m2 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 11.0 Over-extra 3 £/m2 Small Sites % 6% 6% 6% 13% 6% Site Costs % 12.0% 12.0% 12.0% 17.0% 12.0% 12.0% 12.0% 12.0% 12.0% Pre CIL s106 £/Unit 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Post CIL s106 £/Unit 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 £/m2 55 55 55 55 55 55 0 0 0 Contingency % 5.00% 2.50% 2.50% 5.00% 2.50% 2.50% 2.50% 2.50% 2.50% Abnormals % 5.00% 5.00% 5.00% 5.00% 5.00% £/site

FINANCE Fees £ 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 10,000 Interest % 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% Legal and Valuation £

SALES Agents % 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% Legals % 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% 0.50% Misc. £ 0 0 0 0 0 0 0 0

Developers Profit % of costs (before interest) 0% 0% 0% 0% 0% 0% 0% 0% % of GDV 20% 20% 20% 20% 20% 20% 20% 20% 20%

15/10/201608:53 Base V2 Site 1

SITE NAME Site 1

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 8 £/m2 £ m2 Planning app fe dwgs rate BCIS 1,217 LAND /unit or m2 Total No dwgs 8 CfSH 18 1.50% Market Housing 72.0 65% 5 2,600 973,440 374 Land -19,100 -152,803 No dwgs under 8 385 3,080 Energy 0 Stamp Duty 0 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 59.5 11% 1 1,690 84,466 50 Easements etc. 0 Total 3,080 Over-extra 2 11 Legals Acquisition 1.50% -2,292 -2,292 Over-extra 3 0 Affordable Rent 59.5 25% 2 1,050 122,451 117 Small Site 73 6% PLANNING Infrastructure 146 12% Social Rent 59.5 0% 0 950 0 0 Planning Fee 3,080 Stamp duty calc - Residual 1,465 Architects 6.00% 54,739 Land payment -152,803 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 4,562 Affordable Rent 0 0 Planning Consultants 1.00% 9,123 Social Rent 0 0 Other Professional 3.50% 31,931 103,435

SITE AREA - Net 0.10 ha 81 /ha 1,180,357 541 CONSTRUCTION SITE AREA - Gross 0.11 ha 73 /ha Build Cost - BCIS Based 1,465 792,477 Total 0 s106 / CIL 40,592 Contingency 5.00% 39,624 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 39,624 912,316 Land payment 52,800 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value -152,803 -1,543,466 -1,389,119 Interest 6.00% Alternative Use Value 44,000 400,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 8,800 80,000 Closing balance = 0 Total 0 Plus /ha 0 0 0 SALES Viability Threshold 52,800 480,000 Check on phasing dwgs nos Agents 3.0% 35,411 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 5,902 Total 20,000 £/m2 Misc. 0 41,313 911,969 Additional Profit -195,052 -521 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 55 £/m2 % of costs (before interest) 0.00% 0 Total 40,592 % of GDV 20.00% 236,071

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 1 2 2 2 1 Market Housing 0 0 0 121,680 243,360 243,360 243,360 121,680 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 10,558 21,117 21,117 21,117 10,558 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 15,306 30,613 30,613 30,613 15,306 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 147,545 295,089 295,089 295,089 147,545 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 0 Easements etc. 0 Legals Acquisition -2,292

Planning Fee 3,080 Architects 27,369 27,369 QS 2,281 2,281 Planning Consultants 4,562 4,562 Other Professional 15,966 15,966

Build Cost - BCIS Base 0 33,020 99,060 165,099 198,119 165,099 99,060 33,020 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 1,691 5,074 8,457 10,148 8,457 5,074 1,691 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 1,651 4,953 8,255 9,906 8,255 4,953 1,651 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 1,651 4,953 8,255 9,906 8,255 4,953 1,651 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 4,426 8,853 8,853 8,853 4,426 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 738 1,475 1,475 1,475 738 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 60,965 0 88,191 114,040 190,066 228,079 195,230 124,368 48,341 10,328 5,164 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land -152,803 Interest 0 0 0 1,656 4,532 8,021 8,856 6,428 2,824 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 236,071

Cash Flow 91,838 0 -88,191 -114,040 -191,722 -232,611 -55,706 161,865 240,319 281,937 142,381 0 0 0 0 0 0 0 0 0 0 0 0 -236,071 Opening Balanc 0 Closing Balance 91,838 91,838 3,647 -110,392 -302,114 -534,725 -590,431 -428,566 -188,247 93,691 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 147,545 295,089 295,089 295,089 147,545 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 52,800

Stamp Duty 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 792 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 3,080 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 27,369 0 27,369 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 2,281 0 2,281 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 4,562 0 4,562 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 15,966 0 15,966 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 33,020 99,060 165,099 198,119 165,099 99,060 33,020 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL 0 -65,017 -65,017 -65,017 Post CIL s106 2,500 5,000 5,000 5,000 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 1,651 4,953 8,255 9,906 8,255 4,953 1,651 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 1,651 4,953 8,255 9,906 8,255 4,953 1,651 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 4,426 8,853 8,853 8,853 4,426 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 738 1,475 1,475 1,475 738 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 116,849 0 21,482 43,948 119,092 222,931 191,773 124,294 49,150 10,328 5,164 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 1,753 1,779 2,128 2,819 4,648 8,061 8,846 6,417 2,824 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 236,071

Cash Flow -116,849 -1,753 -23,261 -46,076 -121,911 -227,579 -52,290 161,950 239,523 281,937 142,381 0 0 0 0 0 0 0 0 0 0 0 0 -236,071 Opening Balance 0 Closing Balance -116,849 -118,602 -141,863 -187,939 -309,850 -537,429 -589,719 -427,769 -188,247 93,691 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 236,071 0

15/10/201608:53 Base V2 Site 2

SITE NAME Site 2

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 8 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 8 CfSH 14 1.50% Market Housing 93.0 65% 5 2,600 1,257,360 484 Land 16,812 134,497 No dwgs under 8 385 3,080 Energy 0 Stamp Duty 0 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 79.0 11% 1 1,690 112,148 66 Easements etc. 0 Total 3,080 Over-extra 2 11 Legals Acquisition 1.50% 2,017 2,017 Over-extra 3 0 Affordable Rent 79.0 25% 2 1,050 162,582 155 Small Site 56 6% PLANNING Infrastructure 113 12% Social Rent 79.0 0% 0 950 0 0 Planning Fee 3,080 Stamp duty calc - Residual 1,135 Architects 6.00% 52,014 Land payment 134,497 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 4,335 Affordable Rent 0 0 Planning Consultants 1.00% 8,669 Social Rent 0 0 Other Professional 3.50% 30,342 98,439

SITE AREA - Net 0.11 ha 74 /ha 1,532,090 705 CONSTRUCTION SITE AREA - Gross 0.12 ha 67 /ha Build Cost - BCIS Based 1,135 800,297 Total 0 s106 / CIL 46,598 Contingency 2.50% 20,007 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 0 866,902 Land payment 55,200 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 134,497 1,245,342 1,120,807 Interest 6.00% Alternative Use Value 6,000 50,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 1,200 10,000 Closing balance = 0 Total 0 Plus /ha 400,000 48,000 400,000 SALES Viability Threshold 55,200 460,000 Check on phasing dwgs nos Agents 3.0% 45,963 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 7,660 Total 20,000 £/m2 Misc. 0 53,623 1,165,479 Additional Profit 109,647 227 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 55 £/m2 % of costs (before interest) 0.00% 0 Total 46,598 % of GDV 20.00% 306,418

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 2 2 2 2 Market Housing 0 0 0 314,340 314,340 314,340 314,340 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 28,037 28,037 28,037 28,037 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 40,646 40,646 40,646 40,646 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 383,023 383,023 383,023 383,023 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 0 Easements etc. 0 Legals Acquisition 2,017

Planning Fee 3,080 Architects 26,007 26,007 QS 2,167 2,167 Planning Consultants 4,335 4,335 Other Professional 15,171 15,171

Build Cost - BCIS Base 0 66,691 133,383 200,074 200,074 133,383 66,691 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 3,883 7,766 11,650 11,650 7,766 3,883 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 1,667 3,335 5,002 5,002 3,335 1,667 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 11,491 11,491 11,491 11,491 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 1,915 1,915 1,915 1,915 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 62,777 0 119,921 144,484 216,726 216,726 157,890 85,648 13,406 13,406 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 134,497 Interest 2,959 3,003 4,847 7,087 10,445 13,852 10,683 6,382 934 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 306,418

Cash Flow -197,274 -2,959 -122,925 -149,331 -223,813 -227,170 211,281 286,692 363,234 368,683 0 0 0 0 0 0 0 0 0 0 0 0 0 -306,418 Opening Balanc 0 Closing Balance -197,274 -200,233 -323,158 -472,489 -696,302 -923,472 -712,191 -425,499 -62,265 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 383,023 383,023 383,023 383,023 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 55,200

Stamp Duty 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 828 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 3,080 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 26,007 0 26,007 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 2,167 0 2,167 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 4,335 0 4,335 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 15,171 0 15,171 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 66,691 133,383 200,074 200,074 133,383 66,691 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL 0 54,824 54,824 Post CIL s106 5,000 5,000 5,000 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 1,667 3,335 5,002 5,002 3,335 1,667 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 11,491 11,491 11,491 11,491 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 1,915 1,915 1,915 1,915 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 116,788 0 170,862 191,541 210,076 210,076 155,123 86,764 13,406 13,406 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 1,752 1,778 4,368 7,306 10,567 13,877 10,666 6,382 934 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 306,418

Cash Flow -116,788 -1,752 -172,640 -195,909 -217,382 -220,643 214,023 285,592 363,234 368,683 0 0 0 0 0 0 0 0 0 0 0 0 0 -306,418 Opening Balance 0 Closing Balance -116,788 -118,539 -291,179 -487,088 -704,470 -925,114 -711,091 -425,499 -62,265 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 306,418 0

15/10/201608:53 Base V2 Site 3

SITE NAME Site 3

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 14 £/m2 £ m2 Planning app fe dwgs rate BCIS 985 LAND /unit or m2 Total No dwgs 14 CfSH 15 1.50% Market Housing 86.0 65% 9 2,600 2,034,760 783 Land 17,425 243,952 No dwgs under 14 385 5,390 Energy 0 Stamp Duty 1,879 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 62.6 11% 1 1,690 155,579 92 Easements etc. 0 Total 5,390 Over-extra 2 11 Legals Acquisition 1.50% 3,659 5,538 Over-extra 3 0 Affordable Rent 62.6 25% 3 1,050 225,544 215 Small Site 0 0% PLANNING Infrastructure 118 12% Social Rent 62.6 0% 0 950 0 0 Planning Fee 5,390 Stamp duty calc - Residual 1,129 Architects 6.00% 80,349 Land payment 243,952 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 6,696 Affordable Rent 0 0 Planning Consultants 1.00% 13,391 Social Rent 0 0 Other Professional 3.50% 46,870 152,696

SITE AREA - Net 0.26 ha 54 /ha 2,415,883 1,089 CONSTRUCTION SITE AREA - Gross 0.29 ha 48 /ha Build Cost - BCIS Based 1,129 1,230,346 Total 1,879 s106 / CIL 78,043 Contingency 2.50% 30,759 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 0 1,339,148 Land payment 133,400 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 243,952 938,276 841,213 Interest 6.00% Alternative Use Value 14,500 50,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 2,900 10,000 Closing balance = 0 Total 0 Plus /ha 400,000 116,000 400,000 SALES Viability Threshold 133,400 460,000 Check on phasing dwgs nos Agents 3.0% 72,476 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 12,079 Total 35,000 £/m2 Misc. 0 84,556 1,835,890 Additional Profit 161,675 207 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 55 £/m2 % of costs (before interest) 0.00% 0 Total 78,043 % of GDV 20.00% 483,177

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 3 3 3 3 2 Market Housing 0 0 0 436,020 436,020 436,020 436,020 290,680 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 33,338 33,338 33,338 33,338 22,226 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 48,331 48,331 48,331 48,331 32,221 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 517,689 517,689 517,689 517,689 345,126 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 1,879 Easements etc. 0 Legals Acquisition 3,659

Planning Fee 5,390 Architects 40,174 40,174 QS 3,348 3,348 Planning Consultants 6,696 6,696 Other Professional 23,435 23,435

Build Cost - BCIS Base 0 87,882 175,764 263,646 263,646 234,352 146,470 58,588 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 5,575 11,149 16,724 16,724 14,865 9,291 3,716 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 2,197 4,394 6,591 6,591 5,859 3,662 1,465 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 15,531 15,531 15,531 15,531 10,354 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 2,588 2,588 2,588 2,588 1,726 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 94,581 0 169,307 191,307 286,960 286,960 273,195 177,541 81,888 18,119 12,079 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 243,952 Interest 5,078 5,154 7,771 10,757 15,223 19,756 16,385 11,528 5,164 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 483,177

Cash Flow -338,533 -5,078 -174,461 -199,078 -297,718 -302,183 224,739 323,763 424,273 494,406 333,047 0 0 0 0 0 0 0 0 0 0 0 0 -483,177 Opening Balanc 0 Closing Balance -338,533 -343,611 -518,072 -717,150 -1,014,867 -1,317,051 -1,092,312 -768,549 -344,276 150,130 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 517,689 517,689 517,689 517,689 345,126 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 133,400

Stamp Duty 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 2,001 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 5,390 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 40,174 0 40,174 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 3,348 0 3,348 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 6,696 0 6,696 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 23,435 0 23,435 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 87,882 175,764 263,646 263,646 234,352 146,470 58,588 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL 0 53,892 53,892 53,892 Post CIL s106 7,500 7,500 7,500 7,500 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 2,197 4,394 6,591 6,591 5,859 3,662 1,465 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 15,531 15,531 15,531 15,531 10,354 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 2,588 2,588 2,588 2,588 1,726 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 224,444 0 217,624 234,050 331,628 277,737 265,830 175,751 83,172 18,119 12,079 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 3,367 3,417 6,733 10,345 15,474 19,872 16,392 11,509 5,164 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 483,177

Cash Flow -224,444 -3,367 -221,041 -240,782 -341,973 -293,211 231,987 325,546 423,008 494,406 333,047 0 0 0 0 0 0 0 0 0 0 0 0 -483,177 Opening Balance 0 Closing Balance -224,444 -227,811 -448,852 -689,634 -1,031,607 -1,324,818 -1,092,831 -767,284 -344,276 150,130 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 483,177 0

15/10/201608:53 Base V2 Site 4

SITE NAME Site 4

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 40 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 40 CfSH 14 1.50% Market Housing 93.9 65% 26 2,600 6,350,500 2,443 Land 11,470 458,797 No dwgs under 40 385 15,400 Energy 0 Stamp Duty 12,440 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 76.1 11% 4 1,690 540,462 320 Easements etc. 0 Total 15,400 Over-extra 2 11 Legals Acquisition 1.50% 6,882 19,322 Over-extra 3 0 Affordable Rent 76.1 25% 10 1,050 783,510 746 Small Site 0 0% PLANNING Infrastructure 160 17% Social Rent 76.1 0% 0 950 0 0 Planning Fee 15,400 Stamp duty calc - Residual 1,126 Architects 6.00% 274,818 Land payment 458,797 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 22,901 Affordable Rent 0 0 Planning Consultants 1.00% 45,803 Social Rent 0 0 Other Professional 3.50% 160,310 519,232

SITE AREA - Net 1.20 ha 33 /ha 7,674,472 3,509 CONSTRUCTION SITE AREA - Gross 1.50 ha 27 /ha Build Cost - BCIS Based 1,126 3,950,869 Total 12,440 s106 / CIL 234,338 Contingency 5.00% 197,543 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 197,543 4,580,294 Land payment 720,000 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 458,797 382,331 305,865 Interest 6.00% Alternative Use Value 600,000 400,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 120,000 80,000 Closing balance = 0 Total 25,500 Plus /ha 0 0 0 SALES Viability Threshold 720,000 480,000 Check on phasing dwgs nos Agents 3.0% 230,234 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 38,372 Total 100,000 £/m2 Misc. 0 268,607 5,856,251 Additional Profit -165,480 -68 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 55 £/m2 % of costs (before interest) 0.00% 0 Total 234,338 % of GDV 20.00% 1,534,894

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 5 5 5 5 5 5 5 5 Market Housing 0 0 0 793,813 793,813 793,813 793,813 793,813 793,813 793,813 793,813 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 67,558 67,558 67,558 67,558 67,558 67,558 67,558 67,558 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 97,939 97,939 97,939 97,939 97,939 97,939 97,939 97,939 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 959,309 959,309 959,309 959,309 959,309 959,309 959,309 959,309 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 12,440 Easements etc. 0 Legals Acquisition 6,882

Planning Fee 15,400 Architects 137,409 137,409 QS 11,451 11,451 Planning Consultants 22,901 22,901 Other Professional 80,155 80,155

Build Cost - BCIS Base 0 164,620 329,239 493,859 493,859 493,859 493,859 493,859 493,859 329,239 164,620 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 9,764 19,528 29,292 29,292 29,292 29,292 29,292 29,292 19,528 9,764 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 8,231 16,462 24,693 24,693 24,693 24,693 24,693 24,693 16,462 8,231 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 8,231 16,462 24,693 24,693 24,693 24,693 24,693 24,693 16,462 8,231 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 28,779 28,779 28,779 28,779 28,779 28,779 28,779 28,779 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 4,797 4,797 4,797 4,797 4,797 4,797 4,797 4,797 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 296,638 0 442,762 381,691 572,537 572,537 606,113 606,113 606,113 606,113 415,267 224,421 33,576 33,576 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 458,797 Interest 11,332 11,501 18,315 24,316 33,268 42,355 37,693 32,960 28,157 23,281 15,470 4,678 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 1,534,894

Cash Flow -755,435 -11,332 -454,263 -400,007 -596,852 -605,805 310,841 315,504 320,236 325,040 520,761 719,418 921,055 925,733 0 0 0 0 0 0 0 0 0 -1,534,894 Opening Balanc 0 Closing Balance -755,435 -766,766 -1,221,029 -1,621,036 -2,217,888 -2,823,693 -2,512,852 -2,197,349 -1,877,112 -1,552,072 -1,031,312 -311,894 609,161 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 959,309 959,309 959,309 959,309 959,309 959,309 959,309 959,309 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 720,000

Stamp Duty 25,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 10,800 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 15,400 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 137,409 0 137,409 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 11,451 0 11,451 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 22,901 0 22,901 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 80,155 0 80,155 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 164,620 329,239 493,859 493,859 493,859 493,859 493,859 493,859 329,239 164,620 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL 0 -27,580 -27,580 -27,580 -27,580 -27,580 -27,580 Post CIL s106 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 8,231 16,462 24,693 24,693 24,693 24,693 24,693 24,693 16,462 8,231 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 8,231 16,462 24,693 24,693 24,693 24,693 24,693 24,693 16,462 8,231 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 28,779 28,779 28,779 28,779 28,779 28,779 28,779 28,779 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 4,797 4,797 4,797 4,797 4,797 4,797 4,797 4,797 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 1,033,616 0 405,418 334,583 528,165 528,165 561,740 561,740 589,320 589,320 408,239 227,157 33,576 33,576 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 15,504 15,737 22,054 27,404 35,737 44,196 38,895 33,515 28,468 23,345 15,429 4,678 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 1,534,894

Cash Flow -1,033,616 -15,504 -421,154 -356,637 -555,568 -563,902 353,373 358,674 336,474 341,521 527,725 716,722 921,055 925,733 0 0 0 0 0 0 0 0 0 -1,534,894 Opening Balance 0 Closing Balance -1,033,616 -1,049,120 -1,470,275 -1,826,912 -2,382,480 -2,946,382 -2,593,009 -2,234,335 -1,897,862 -1,556,341 -1,028,616 -311,894 609,161 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 1,534,894 0

15/10/201608:53 Base V2 Site 5

SITE NAME Site 5

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 6 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 6 CfSH 14 1.50% Market Housing 86.0 65% 4 2,600 872,040 335 Land 13,990 83,940 No dwgs under 6 385 2,310 Energy 0 Stamp Duty 0 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 79.0 11% 1 1,690 84,111 50 Easements etc. 0 Total 2,310 Over-extra 2 11 Legals Acquisition 1.50% 1,259 1,259 Over-extra 3 0 Affordable Rent 79.0 25% 1 1,050 121,937 116 Small Site 56 6% PLANNING Infrastructure 113 12% Social Rent 79.0 0% 0 950 0 0 Planning Fee 2,310 Stamp duty calc - Residual 1,135 Architects 6.00% 37,014 Land payment 83,940 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 3,085 Affordable Rent 0 0 Planning Consultants 1.00% 6,169 Social Rent 0 0 Other Professional 3.50% 21,592 70,169

SITE AREA - Net 0.18 ha 33 /ha 1,078,088 501 CONSTRUCTION SITE AREA - Gross 0.20 ha 30 /ha Build Cost - BCIS Based 1,135 569,224 Total 0 s106 / CIL 33,447 Contingency 2.50% 14,231 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 0 616,901 Land payment 92,000 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 83,940 466,336 419,702 Interest 6.00% Alternative Use Value 10,000 50,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 2,000 10,000 Closing balance = 0 Total 0 Plus /ha 400,000 80,000 400,000 SALES Viability Threshold 92,000 460,000 Check on phasing dwgs nos Agents 3.0% 32,343 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 5,390 Total 15,000 £/m2 Misc. 0 37,733 820,003 Additional Profit 9,634 29 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 55 £/m2 % of costs (before interest) 0.00% 0 Total 33,447 % of GDV 20.00% 215,618

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 1 2 2 1 Market Housing 0 0 0 145,340 290,680 290,680 145,340 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 14,019 28,037 28,037 14,019 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 20,323 40,646 40,646 20,323 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 179,681 359,363 359,363 179,681 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 0 Easements etc. 0 Legals Acquisition 1,259

Planning Fee 2,310 Architects 18,507 18,507 QS 1,542 1,542 Planning Consultants 3,085 3,085 Other Professional 10,796 10,796

Build Cost - BCIS Base 0 31,624 94,871 158,118 158,118 94,871 31,624 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 1,858 5,575 9,291 9,291 5,575 1,858 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 791 2,372 3,953 3,953 2,372 791 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 5,390 10,781 10,781 5,390 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 898 1,797 1,797 898 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 47,499 0 68,202 102,817 171,361 171,361 109,106 46,850 12,578 6,289 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 83,940 Interest 1,972 2,001 3,054 4,642 7,282 9,962 9,053 4,501 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 215,618

Cash Flow -131,439 -1,972 -70,203 -105,871 -176,004 -178,644 60,614 303,460 342,284 173,392 0 0 0 0 0 0 0 0 0 0 0 0 0 -215,618 Opening Balanc 0 Closing Balance -131,439 -133,411 -203,614 -309,485 -485,489 -664,132 -603,519 -300,059 42,225 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 179,681 359,363 359,363 179,681 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 92,000

Stamp Duty 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 1,380 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 2,310 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 18,507 0 18,507 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 1,542 0 1,542 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 3,085 0 3,085 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 10,796 0 10,796 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 31,624 94,871 158,118 158,118 94,871 31,624 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL 4,817 4,817 Post CIL s106 2,500 5,000 5,000 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 791 2,372 3,953 3,953 2,372 791 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 5,390 10,781 10,781 5,390 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 898 1,797 1,797 898 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 139,620 0 71,161 102,060 164,571 167,071 108,531 47,492 12,578 6,289 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 2,094 2,126 3,225 4,804 7,345 9,961 9,043 4,501 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 215,618

Cash Flow -139,620 -2,094 -73,287 -105,285 -169,375 -174,416 61,189 302,827 342,284 173,392 0 0 0 0 0 0 0 0 0 0 0 0 0 -215,618 Opening Balance 0 Closing Balance -139,620 -141,714 -215,000 -320,285 -489,660 -664,075 -602,886 -300,059 42,225 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 215,618 0

15/10/201608:53 Base V2 Site 6

SITE NAME Site 6

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 4 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 4 CfSH 14 1.50% Market Housing 93.0 65% 3 2,600 628,680 242 Land 7,385 29,541 No dwgs under 4 385 1,540 Energy 0 Stamp Duty 0 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 93.0 11% 0 1,690 66,011 39 Easements etc. 0 Total 1,540 Over-extra 2 11 Legals Acquisition 1.50% 443 443 Over-extra 3 0 Affordable Rent 93.0 25% 1 1,050 95,697 91 Small Site 122 13% PLANNING Infrastructure 113 12% Social Rent 93.0 0% 0 950 0 0 Planning Fee 1,540 Stamp duty calc - Residual 1,201 Architects 6.00% 28,883 Land payment 29,541 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 2,407 Affordable Rent 0 0 Planning Consultants 1.00% 4,814 Social Rent 0 0 Other Professional 3.50% 16,848 54,492

SITE AREA - Net 0.08 ha 50 /ha 790,388 372 CONSTRUCTION SITE AREA - Gross 0.10 ha 40 /ha Build Cost - BCIS Based 1,201 446,908 Total 0 s106 / CIL 23,299 Contingency 2.50% 11,173 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 0 481,379 Land payment 46,000 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 29,541 369,268 295,414 Interest 6.00% Alternative Use Value 5,000 50,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 1,000 10,000 Closing balance = 0 Total 0 Plus /ha 400,000 40,000 400,000 SALES Viability Threshold 46,000 460,000 Check on phasing dwgs nos Agents 3.0% 23,712 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 3,952 Total 10,000 £/m2 Misc. 0 27,664 603,519 Additional Profit -4,283 -18 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 55 £/m2 % of costs (before interest) 0.00% 0 Total 23,299 % of GDV 20.00% 158,078

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 1 1 1 1 Market Housing 0 0 0 157,170 157,170 157,170 157,170 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 16,503 16,503 16,503 16,503 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 23,924 23,924 23,924 23,924 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 197,597 197,597 197,597 197,597 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 0 Easements etc. 0 Legals Acquisition 443

Planning Fee 1,540 Architects 14,441 14,441 QS 1,203 1,203 Planning Consultants 2,407 2,407 Other Professional 8,424 8,424

Build Cost - BCIS Base 0 37,242 74,485 111,727 111,727 74,485 37,242 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 1,942 3,883 5,825 5,825 3,883 1,942 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 931 1,862 2,793 2,793 1,862 931 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 5,928 5,928 5,928 5,928 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 988 988 988 988 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 38,459 0 66,591 80,230 120,345 120,345 87,146 47,031 6,916 6,916 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 29,541 Interest 1,020 1,035 2,050 3,284 5,138 7,021 5,469 3,293 482 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 158,078

Cash Flow -68,000 -1,020 -67,626 -82,280 -123,629 -125,483 103,431 145,097 187,389 190,199 0 0 0 0 0 0 0 0 0 0 0 0 0 -158,078 Opening Balanc 0 Closing Balance -68,000 -69,020 -136,647 -218,926 -342,555 -468,038 -364,607 -219,510 -32,122 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 197,597 197,597 197,597 197,597 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 46,000

Stamp Duty 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 690 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 1,540 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 14,441 0 14,441 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 1,203 0 1,203 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 2,407 0 2,407 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 8,424 0 8,424 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 37,242 74,485 111,727 111,727 74,485 37,242 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL -2,142 -2,142 Post CIL s106 2,500 2,500 2,500 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 931 1,862 2,793 2,793 1,862 931 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 5,928 5,928 5,928 5,928 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 988 988 988 988 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 84,706 0 62,508 74,205 117,020 117,020 85,763 47,589 6,916 6,916 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 1,271 1,290 2,247 3,393 5,200 7,033 5,461 3,293 482 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 158,078

Cash Flow -84,706 -1,271 -63,797 -76,452 -120,414 -122,220 104,802 144,547 187,389 190,199 0 0 0 0 0 0 0 0 0 0 0 0 0 -158,078 Opening Balance 0 Closing Balance -84,706 -85,976 -149,774 -226,226 -346,639 -468,859 -364,057 -219,510 -32,122 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 158,078 0

15/10/201608:53 Base V2 Site 7

SITE NAME Site 7

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 6 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 6 CfSH 14 1.50% Market Housing 87.4 80% 5 2,600 1,090,752 420 Land 25,423 152,537 No dwgs under 6 385 2,310 Energy 0 Stamp Duty 51 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 79.0 9% 1 1,690 72,095 43 Easements etc. 0 Total 2,310 Over-extra 2 11 Legals Acquisition 1.50% 2,288 2,339 Over-extra 3 0 Affordable Rent 79.0 11% 1 1,050 54,747 52 Small Site 56 6% PLANNING Infrastructure 113 12% Social Rent 79.0 0% 0 950 0 0 Planning Fee 2,310 Stamp duty calc - Residual 1,135 Architects 6.00% 38,569 Land payment 152,537 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 3,214 Affordable Rent 0 0 Planning Consultants 1.00% 6,428 Social Rent 0 0 Other Professional 3.50% 22,498 73,019

SITE AREA - Net 0.27 ha 22 /ha 1,217,594 514 CONSTRUCTION SITE AREA - Gross 0.30 ha 20 /ha Build Cost - BCIS Based 1,135 584,008 Total 51 s106 / CIL 15,000 Contingency 2.50% 14,600 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 29,200 642,808 Land payment 138,000 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 152,537 564,952 508,457 Interest 6.00% Alternative Use Value 15,000 50,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 3,000 10,000 Closing balance = 0 Total 0 Plus /ha 400,000 120,000 400,000 SALES Viability Threshold 138,000 460,000 Check on phasing dwgs nos Agents 3.0% 36,528 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 6,088 Total 15,000 £/m2 Misc. 0 42,616 923,319 Additional Profit 15,470 37 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 0 £/m2 % of costs (before interest) 0.00% 0 Total 15,000 % of GDV 20.00% 243,519

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 2 2 2 Market Housing 0 0 0 363,584 363,584 363,584 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 24,032 24,032 24,032 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 18,249 18,249 18,249 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 405,865 405,865 405,865 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 51 Easements etc. 0 Legals Acquisition 2,288

Planning Fee 2,310 Architects 19,284 19,284 QS 1,607 1,607 Planning Consultants 3,214 3,214 Other Professional 11,249 11,249

Build Cost - BCIS Base 0 64,890 129,780 194,669 129,780 64,890 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 1,667 3,333 5,000 3,333 1,667 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 1,622 3,244 4,867 3,244 1,622 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 3,244 6,489 9,733 6,489 3,244 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 12,176 12,176 12,176 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 2,029 2,029 2,029 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 50,003 0 106,778 142,846 214,269 142,846 85,628 14,205 14,205 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 152,537 Interest 3,038 3,084 4,732 6,945 10,263 12,560 7,945 2,189 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 243,519

Cash Flow -202,540 -3,038 -109,861 -147,578 -221,215 -153,110 307,676 383,715 389,470 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -243,519 Opening Balanc 0 Closing Balance -202,540 -205,578 -315,440 -463,018 -684,232 -837,342 -529,666 -145,951 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 405,865 405,865 405,865 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 138,000

Stamp Duty 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 2,070 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 2,310 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 19,284 0 19,284 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 1,607 0 1,607 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 3,214 0 3,214 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 11,249 0 11,249 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 64,890 129,780 194,669 129,780 64,890 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL 15,470 Post CIL s106 5,000 5,000 5,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 1,622 3,244 4,867 3,244 1,622 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 3,244 6,489 9,733 6,489 3,244 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 12,176 12,176 12,176 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 2,029 2,029 2,029 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 187,734 0 120,581 139,513 214,269 144,513 88,962 14,205 14,205 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 2,816 2,858 4,710 6,873 10,190 12,511 7,945 2,189 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 243,519

Cash Flow -187,734 -2,816 -123,439 -144,223 -221,143 -154,703 304,392 383,715 389,470 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -243,519 Opening Balance 0 Closing Balance -187,734 -190,550 -313,989 -458,212 -679,355 -834,058 -529,666 -145,951 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 243,519 0

15/10/201608:53 Base V2 Site 8

SITE NAME Site 8

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 12 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 12 CfSH 14 1.50% Market Housing 102.0 80% 10 2,050 2,007,360 979 Land 6,084 73,006 No dwgs under 12 385 4,620 Energy 0 Stamp Duty 0 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 79.0 9% 1 1,333 113,689 85 Easements etc. 0 Total 4,620 Over-extra 2 11 Legals Acquisition 1.50% 1,095 1,095 Over-extra 3 0 Affordable Rent 79.0 11% 1 1,050 109,494 104 Small Site 0 0% PLANNING Infrastructure 113 12% Social Rent 79.0 0% 0 950 0 0 Planning Fee 4,620 Stamp duty calc - Residual 1,079 Architects 6.00% 83,146 Land payment 73,006 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 6,929 Affordable Rent 0 0 Planning Consultants 1.00% 13,858 Social Rent 0 0 Other Professional 3.50% 48,502 157,054

SITE AREA - Net 0.32 ha 38 /ha 2,230,543 1,169 CONSTRUCTION SITE AREA - Gross 0.40 ha 30 /ha Build Cost - BCIS Based 1,079 1,261,176 Total 0 s106 / CIL 30,000 Contingency 2.50% 31,529 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 63,059 1,385,764 Land payment 184,000 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 73,006 228,144 182,515 Interest 6.00% Alternative Use Value 20,000 50,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 4,000 10,000 Closing balance = 0 Total 680 Plus /ha 400,000 160,000 400,000 SALES Viability Threshold 184,000 460,000 Check on phasing dwgs nos Agents 3.0% 66,916 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 11,153 Total 30,000 £/m2 Misc. 0 78,069 1,704,988 Additional Profit -117,201 -120 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 0 £/m2 % of costs (before interest) 0.00% 0 Total 30,000 % of GDV 20.00% 446,109

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 3 3 3 3 Market Housing 0 0 0 501,840 501,840 501,840 501,840 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 28,422 28,422 28,422 28,422 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 27,374 27,374 27,374 27,374 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 557,636 557,636 557,636 557,636 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 0 Easements etc. 0 Legals Acquisition 1,095

Planning Fee 4,620 Architects 41,573 41,573 QS 3,464 3,464 Planning Consultants 6,929 6,929 Other Professional 24,251 24,251

Build Cost - BCIS Base 0 105,098 210,196 315,294 315,294 210,196 105,098 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 2,500 5,000 7,500 7,500 5,000 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 2,627 5,255 7,882 7,882 5,255 2,627 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 5,255 10,510 15,765 15,765 10,510 5,255 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 16,729 16,729 16,729 16,729 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 2,788 2,788 2,788 2,788 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 91,932 0 191,697 230,961 346,441 346,441 250,478 134,998 19,517 19,517 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 73,006 Interest 2,474 2,511 5,424 8,970 14,301 19,712 15,401 9,292 1,360 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 446,109

Cash Flow -164,938 -2,474 -194,209 -236,385 -355,411 -360,742 287,445 407,237 528,826 536,759 0 0 0 0 0 0 0 0 0 0 0 0 0 -446,109 Opening Balanc 0 Closing Balance -164,938 -167,412 -361,621 -598,006 -953,417 -1,314,159 -1,026,714 -619,476 -90,650 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 557,636 557,636 557,636 557,636 0 0 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 184,000

Stamp Duty 680 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 2,760 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 4,620 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 41,573 0 41,573 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 3,464 0 3,464 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 6,929 0 6,929 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 24,251 0 24,251 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 105,098 210,196 315,294 315,294 210,196 105,098 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL -58,601 -58,601 Post CIL s106 7,500 7,500 7,500 7,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 2,627 5,255 7,882 7,882 5,255 2,627 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 5,255 10,510 15,765 15,765 10,510 5,255 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 16,729 16,729 16,729 16,729 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 2,788 2,788 2,788 2,788 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 278,277 0 130,597 167,360 346,441 346,441 252,978 139,998 19,517 19,517 0 0 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 4,174 4,237 6,259 8,864 14,193 19,603 15,327 9,292 1,360 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 446,109

Cash Flow -278,277 -4,174 -134,834 -173,619 -355,305 -360,634 285,055 402,311 528,826 536,759 0 0 0 0 0 0 0 0 0 0 0 0 0 -446,109 Opening Balance 0 Closing Balance -278,277 -282,451 -417,285 -590,904 -946,209 -1,306,843 -1,021,788 -619,476 -90,650 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 446,109 0

15/10/201608:53 Base V2 Site 9

SITE NAME Site 9

INCOME Av Size % Number Price GDV GIA DEVELOPMENT COSTS Planning fee calc Build Cost /m2 m2 16 £/m2 £ m2 Planning app fe dwgs rate BCIS 941 LAND /unit or m2 Total No dwgs 16 CfSH 14 1.50% Market Housing 88.3 80% 13 2,050 2,317,867 1,131 Land 4,069 65,108 No dwgs under 16 385 6,160 Energy 0 Stamp Duty 0 No dwgs over 5 0 115 0 Over-extra 1 0 Shared Ownership 79.0 9% 1 1,333 151,585 114 Easements etc. 0 Total 6,160 Over-extra 2 11 Legals Acquisition 1.50% 977 977 Over-extra 3 0 Affordable Rent 79.0 11% 2 1,050 145,992 139 Small Site 0 0% PLANNING Infrastructure 113 12% Social Rent 79.0 0% 0 950 0 0 Planning Fee 6,160 Stamp duty calc - Residual 1,079 Architects 6.00% 98,686 Land payment 65,108 Grant and Subsidy Shared Ownership 0 0 QS / PM 0.50% 8,224 Affordable Rent 0 0 Planning Consultants 1.00% 16,448 Social Rent 0 0 Other Professional 3.50% 57,567 187,085

SITE AREA - Net 0.53 ha 30 /ha 2,615,444 1,383 CONSTRUCTION SITE AREA - Gross 0.53 ha 30 /ha Build Cost - BCIS Based 1,079 1,492,809 Total 0 s106 / CIL 40,000 Contingency 2.50% 37,320 Stamp duty calc - Add Profit Sales per Quarter 0 Abnormals 74,640 1,644,770 Land payment 227,900 Unit Build Time 3 Quarters RUN Residual MACRO ctrl+r FINANCE Whole Site Per ha NET Per ha GROSS Closing balance = 0 Fees 10,000 Residual Land Value 65,108 122,845 122,845 Interest 6.00% Alternative Use Value 13,250 25,000 RUN CIL MACRO ctrl+l Legal and Valuation 0 10,000 Uplift 20% 2,650 5,000 Closing balance = 0 Total 1,558 Plus /ha 400,000 212,000 400,000 SALES Viability Threshold 227,900 430,000 Check on phasing dwgs nos Agents 3.0% 78,463 Pre CIL s106 2,500 £/ Unit (all) correct Legals 0.5% 13,077 Total 40,000 £/m2 Misc. 0 91,541 1,999,479 Additional Profit -175,116 -155 Post CIL s106 2,500 £/ Unit (all) Developers Profit CIL 0 £/m2 % of costs (before interest) 0.00% 0 Total 40,000 % of GDV 20.00% 523,089

RESIDUAL CASH FLOW FOR INTEREST Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME UNITS Started 1 3 3 3 3 3 Market Housing 0 0 0 144,867 434,600 434,600 434,600 434,600 434,600 0 0 0 0 0 0 0 0 0 0 0 0 Shared Ownership 0 0 0 9,474 28,422 28,422 28,422 28,422 28,422 0 0 0 0 0 0 0 0 0 0 0 0 Affordable Rent 0 0 0 9,125 27,374 27,374 27,374 27,374 27,374 0 0 0 0 0 0 0 0 0 0 0 0 Social Rent 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Grant and Subsidy 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 INCOME 0 0 0 0 0 0 163,465 490,396 490,396 490,396 490,396 490,396 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Stamp Duty 0 Easements etc. 0 Legals Acquisition 977

Planning Fee 6,160 Architects 49,343 49,343 QS 4,112 4,112 Planning Consultants 8,224 8,224 Other Professional 28,783 28,783

Build Cost - BCIS Base 0 31,100 124,401 217,701 279,902 279,902 279,902 186,601 93,301 0 0 0 0 0 0 0 0 0 0 0 0 0 0 s106/CIL 0 833 3,333 5,833 7,500 7,500 7,500 5,000 2,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 778 3,110 5,443 6,998 6,998 6,998 4,665 2,333 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 1,555 6,220 10,885 13,995 13,995 13,995 9,330 4,665 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 Legal and Valuation 0

Agents 0 0 0 0 0 0 4,904 14,712 14,712 14,712 14,712 14,712 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 817 2,452 2,452 2,452 2,452 2,452 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 COSTS BEFORE LAND INT AND PROF 107,599 0 124,728 137,064 239,862 308,394 314,116 325,558 222,760 119,962 17,164 17,164 0 0 0 0 0 0 0 0 0 0 0 0

For Residual Valuation Land 65,108 Interest 2,591 2,629 4,540 6,664 10,362 15,143 17,630 15,422 11,639 6,257 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on Costs 0 Profit on GDV 523,089

Cash Flow -172,707 -2,591 -127,358 -141,604 -246,526 -318,756 -165,793 147,208 252,214 358,795 466,975 473,232 0 0 0 0 0 0 0 0 0 0 0 -523,089 Opening Balanc 0 Closing Balance -172,707 -175,297 -302,655 -444,259 -690,785 -1,009,541 -1,175,335 -1,028,127 -775,913 -417,118 49,857 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 0

CASH FLOW FOR CIL ADDITIONAL PROFIT Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 INCOME As Above INCOME 0 0 0 0 0 0 163,465 490,396 490,396 490,396 490,396 490,396 0 0 0 0 0 0 0 0 0 0 0 0

EXPENDITURE Land 227,900

Stamp Duty 1,558 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Easements etc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legals Acquisition 3,419 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Planning Fee 6,160 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Architects 49,343 0 49,343 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 QS 4,112 0 4,112 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Planning Consultants 8,224 0 8,224 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other Professional 28,783 0 28,783 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Build Cost - BCIS Base 0 0 31,100 124,401 217,701 279,902 279,902 279,902 186,601 93,301 0 0 0 0 0 0 0 0 0 0 0 0 0 0 POTENTIAL CIL -43,779 -43,779 -43,779 -43,779 Post CIL s106 2,500 7,500 7,500 7,500 7,500 7,500 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Contingency 0 0 778 3,110 5,443 6,998 6,998 6,998 4,665 2,333 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Abnormals 0 0 1,555 6,220 10,885 13,995 13,995 13,995 9,330 4,665 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Finance Fees 10,000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Legal and Valuation 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Agents 0 0 0 0 0 0 4,904 14,712 14,712 14,712 14,712 14,712 0 0 0 0 0 0 0 0 0 0 0 0 Legals 0 0 0 0 0 0 817 2,452 2,452 2,452 2,452 2,452 0 0 0 0 0 0 0 0 0 0 0 0 Misc. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 COSTS BEFORE LAND INT AND PROF 339,499 0 80,116 89,952 192,750 264,615 314,116 325,558 225,260 124,962 17,164 17,164 0 0 0 0 0 0 0 0 0 0 0 0

For CIL calculation Interest 5,092 5,169 6,448 7,894 10,904 15,037 17,522 15,312 11,565 6,257 0 0 0 0 0 0 0 0 0 0 0 0 0 Profit on cost 0 Profit on GDV 523,089

Cash Flow -339,499 -5,092 -85,285 -96,400 -200,644 -275,519 -165,687 147,316 249,824 353,869 466,975 473,232 0 0 0 0 0 0 0 0 0 0 0 -523,089 Opening Balance 0 Closing Balance -339,499 -344,591 -429,876 -526,276 -726,920 -1,002,439 -1,168,126 -1,020,811 -770,987 -417,118 49,857 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 523,089 0

15/10/201608:53 Site 1 Site 2 Site 3 Site 4 Site 5 Site 6 Site 7 Site 8 Site 9 Land West of Land Behind Briery Bank - Land on Church South of North West of North of 17 Hollins Lane Sandside Road Beetham C Of E Queen's Drive Persimmon Site Street Whinney Fold Sand Lane 1 Market Street Primary Sch Green/brown field Mixed Green Green Brown Green Green Green Green Green Use Garages Agricultural Vacant Pub / Ind Agricultural Agricultural Agricultural Agricultural Agricultural

Site Area Gross ha 0.11 0.12 0.29 1.5 0.2 0.1 0.3 0.4 0.53 Net ha 0.099 0.108 0.26 1.2 0.18 0.08 0.27 0.32 0.53 Units 8 8 14 40 6 4 6 12 16

Mix Market 65.00% 65.00% 65.00% 65.00% 65.00% 65.00% 80.00% 80.00% 80.00% Intermediate to Buy 10.50% 10.50% 10.50% 10.50% 10.50% 10.50% 9.00% 9.00% 9.00% Affordable Rent 24.50% 24.50% 24.50% 24.50% 24.50% 24.50% 11.00% 11.00% 11.00% Social Rent 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

Alternative Land Value £/ha 400,000 50,000 50,000 400,000 50,000 50,000 50,000 50,000 25,000 £ site 44,000 6,000 14,500 600,000 10,000 5,000 15,000 20,000 13,250

Uplift £/ha 80,000 410,000 410,000 80,000 410,000 410,000 410,000 410,000 405,000 £ site 8,800 49,200 118,900 120,000 82,000 41,000 123,000 164,000 214,650

Viability Threshold £/ha 480,000 460,000 460,000 480,000 460,000 460,000 460,000 460,000 430,000 £ site 52,800 55,200 133,400 720,000 92,000 46,000 138,000 184,000 227,900

Residual VaGross £/ha -1,389,119 1,120,807 841,213 305,865 419,702 295,414 508,457 182,515 122,845 Net £/ha -1,543,466 1,245,342 938,276 382,331 466,336 369,268 564,952 228,144 122,845 £ site -152,803 134,497 243,952 458,797 83,940 29,541 152,537 73,006 65,108

Additional Profit £ site -195,052 109,647 161,675 -165,480 9,634 -4,283 15,470 -117,201 -175,116 £/m2 -521 227 207 -68 29 -18 37 -120 -155

HDH Planning and Development Ltd is a specialist planning consultancy providing evidence to support planning authorities, land owners and developers. The firm is regulated by the RICS.

The main areas of expertise are:

 Community Infrastructure Levy (CIL)  District wide and site specific Viability Analysis  Local and Strategic Housing Market Assessments and Housing Needs Assessments  Future Housing Numbers Analysis (post RSS target setting)

HDH Planning and Development have clients throughout England and Wales.

HDH Planning and Development Ltd Registered in England Company Number 08555548 Clapham Woods Farm, Keasden, Nr Clapham, Lancaster. LA2 8ET [email protected] 015242 51831 / 07989 975 977