Local Development Framework: Strategic Sites - Viability ... · 2 Viability in this sense means the financial health of schemes – whether or not they would be likely to proceed

Wiltshire Council

Local Development Framework: Strategic Sites - Viability Overview Assessment

2009

Preliminary Final Report

Report for the consideration of Wiltshire Council:

This document does not constitute Council Policy

Prepared by

55 West Street Chichester

West Sussex PO19 1RU

01243 771304 www.adamsintegra.co.uk

http://www.adamsintegra.co.uk/

CONTENTS

Executive Summary 2 1. Introduction 4 2. Methodology and Assumptions 6 3. Results – Property Market & Trends 24

Background 24 Property Market 24 Results Trends 25

4. Results Summaries by Site 26 5. Overall Summary and Conclusions 46 General notes 50 Appendices Appendix I Indicative dwelling mixes and summary planning obligations

assumptions – all sites Appendix II Summary of approximate RLVs and purely indicative value

comparisons Appendix III Summary of updated property prices research and Market

Commentary Extracts

Adams Integra – December 2009 (Ref: 09802) 1

Wiltshire Council – Strategic Sites - Viability Overview Assessment

EXECUTIVE SUMMARY - Quick overview of study and outcomes For detailed information on the study methodology, results and conclusions it will be necessary to refer to the full text and appendices which follow this summary.

1 Highly indicative Residual Valuation based appraisals have been carried out to begin considering the likely viability of the residential elements within the South Wiltshire proposed Core Strategy Strategic Growth Sites.

2 Viability in this sense means the financial health of schemes – whether or not

they would be likely to proceed.

3 A particular aim was to assume 40% affordable housing within all appraisals, the Council’s proposed target being a key priority for the Council given local need levels. So viability would be measured with that as a given. In January 2009, Adams Integra completed a previous study on development viability in relation to affordable housing – for former Salisbury District Council. This work takes some cues from that earlier study – in terms of general methodology, and some key assumptions such as the basis for the range of market property values considered.

4 The residual land values (RLVs) which resulted are highly indicative because

they are driven by a wider range of assumptions – some with more detailed basis than others. That is the nature of this stage of work, but it does enable initial views to start forming – which should be kept under review as the delivery of these sites draws nearer and more becomes known about them.

5 The RLV outcomes vary a great deal, and will be subject to further variation,

possibly significantly.

6 Property values vary locally. Lower values, relatively (i.e. in the former Salisbury DC area context), are seen. Those produce less favourable results, which also need to be considered in the context of recent and potential future market conditions. Affordable housing requirements are not the single cause of the less favourable results – the influence of recent market conditions is arguably a bigger factor at the current time. This most obviously shows itself through some relatively low property values assumptions, which means less scope for the appraisals to bear development cost while retaining sufficient levels of developer’s profit and producing land values likely to be adequate to encourage owners to sell.

7 Taking a strategic overview, whilst the outcomes do vary and will vary further,

we consider (as we stated previously) that little would be gained from adjusting affordable housing targets on a short term/responsive and possibly variable basis according to site specifics given a single set of market circumstances. That would not provide clarity as these schemes move



forward. The normal negotiated processes, informed by the use of a similar appraisal tool, should be able to deal with variations in response to any particular demonstrated viability and funding issues. This will be a dynamic process – possibly reviewed at various stages in the run up to and during the development periods.

8 Compromises will most likely be needed, particularly on some of these sites,

but in our view the 40% target should be maintained as a backdrop for those discussions, given the balance that has to be sought between needs and viability.

9 The viability outcomes are most sensitive to:

• Market housing values (flowing from market conditions – a key risk

factor – but noting also that it will be vital to create quality development which optimises the values potential and thus the scope to maintain site viability).

• The level of revenue assumed for the affordable housing, especially when it comprises such a significant part of a scheme. This may well link to the availability of social housing grant.

• Variation in key costs areas – for example build costs (including as influenced by environmental specification).

10 A range of other factors also come in to play – but tend to impact collectively

rather than cause a critical level of adjustment to viability by themselves (individually), for example:

• Planning obligations – collectively (and their timing within the

development period). • Abnormal costs – utilities, ground works, flood risk, potentially

extensive surveys, remediation and a range of other factors. • Developer’s profit variations, within normal parameters.

11 There will also be other factors that affect specific sites – such as varying

degrees of influence of existing/alternative use values, potential requirements for business relocation packages, exposure also to commercial property and investment markets (for mixed use schemes and former commercial land), and particular previous site uses.

12 From this early stages review, we consider that the best viability prospects,

including relating to the affordable housing target of 40%, are likely to be the strategic sites at Netherhampton Road followed by the residential elements of the Central Salisbury sites which we expect to attract relatively good housing values. Our informal hierarchy then covers the other greenfield locations (Hampton Park, Fugglestone Red and Longhedge), followed by Wilton (UKLF), Amesbury (Kings Gate) and likely to be least viable (particularly if



pursued on its own) is the Engine Shed component of the Churchfields comprehensive scheme. The report warns that this could all move around, depending on how the more detailed picture builds up in due course, including how the above factors impact.



1 INTRODUCTION 1.1 Background 1.1.1 At the point of our engagement and through the majority of our involvement,

Wiltshire Council was in the process of preparing its Core Strategy Development Plan Document (DPD) for South Wiltshire. The consultation period on the pre-submission version Core Strategy DPD ended on 30th September 2009. The Core Strategy requires the master planning of a range of Strategic Sites that will deliver new housing.

1.1.2 Prior to the 2009 Local Government reorganisation in Wiltshire, these sites

were formerly under review by Salisbury District Council. They are primarily located in and around Salisbury, and are all within the former Salisbury District. Most are residential development based schemes, though some relate to mixed use proposals. All envisage a range of infrastructure works and / or contributions being provided. At the time of building our assumptions, the sites were described and the proposed approach to each was outlined in the Council’s Appendix A to the pre-submission Core Strategy version – ‘Development Templates for strategic growth sites’. That document set out the Council’s approach under the following heading areas for each strategic site that will provide housing:

• Site description • Development objectives • Site constraints • Land uses and quanta of development • Essential infrastructure requirements • Place shaping requirements • Strategic linkages • Delivery mechanism • Key delivery milestones, monitoring and review

1.1.3 The proposed Core Policies need to be read in conjunction with those

Templates, which have subsequently been updated. Where possible, Adams Integra’s approach has been adjusted to take account of changes to those templates. However, with any study such as this, it must be appreciated that many assumptions have to be fixed at a particular point in time, usually quite early during the study process.

1.1.4 The Development Templates should be referred to – this concise study

document does not intend to repeat the background and information relating to each of the sites. The sites are as follows:

• Hampton Park (phase II) • Fugglestone Red



• Central Car Park/Maltings, Salisbury • Churchfields (including former Engine Shed site) • UK Land Forces (‘UKLF’) HQ, Wilton • South of Netherhampton Road, Netherhampton/Harnham • Longhedge, Old Sarum (formerly known as ‘Beehive’) • Kings Gate, Stockport, Amesbury

1.1.5 The purpose of this review is to consider the likely financial viability of

residential development (and therefore of strategic housing growth) in these locations. Given the relatively early stage in terms of detailed site knowledge and the shape of particular proposals, this is necessarily a high level review which fits the strategic role and stage of the Core Strategy DPD. Its inputs and outcomes are at this stage indicative and must be regarded as so. They are based on reasonable assumptions as far as can be made at present. This said, it enables us to consider viability and the key variables and risks likely to be associated with how the viability picture may look, and vary, as more becomes known and the sites come forward.

1.1.6 A key assumption applied has been to include 40% affordable housing within

our thinking – as per the current stage Core Strategy policy headline. In January 2009 Adams Integra completed a strategic viability overview study (‘Affordable Housing Economic Viability Study’). That previous study looked at how affordable housing impacts viability and recommended that, as a target, 40% affordable housing be sought on sites of 15 or more dwellings in respect of the (former) Salisbury District. A key aspect of this initial look at the strategic sites is to consider that target, alongside the developing picture on other costs and infrastructure requirements that are likely to be required in the context of these developments.

1.1.7 The methodology and assumptions used are outlined in Chapter 2, the results are discussed in Chapters 3 and 4; the conclusions are set out in Chapter 5. Prints of the spreadsheets Adams Integra used to put together indicative the dwelling mixes and other assumptions areas are included as Appendix I to the rear of this document. We envisage that the Council will keep that type of information under review, and could use a similar tool to do so.



2 METHODOLOGY AND ASSUMPTIONS

2.1 Approach to study 2.1.1 This review was carried out using similar processes, in general, to those

applied for Adams Integra’s previous viability overview which focussed on smaller (non strategic) site types. Therefore the detailed points on the residual land valuation principles together with the background to the basic methodology and many of the assumptions are not repeated here.

2.1.2 The focus here is to consider the South Wiltshire proposed Core Strategy

strategic sites which will deliver housing (or an element of housing) and specifically their likely viability bearing in mind affordable housing requirements alongside other planning obligations relating to anticipated infrastructure deficiencies.

2.1.3 Again it applies the technique of Residual Land Valuation. As with our

previous viability overview study for (former) Salisbury District affordable housing policy development, it does this so that views can be developed on the likely scope for the completed scheme value to support the range of development costs. The scope of development costs is wide again. In the context of considering viability, they include site and construction related costs, finance, purchase and sale costs; together with the impact of affordable housing and a wider range of planning obligations as well as developer’s profit. The essence is to see whether sufficient sums of money are likely to remain for land purchase, once all development costs are met (including the provision of affordable housing).

2.1.4 This time we have used the Homes and Communities Agency’s (HCA’s)

Economic Appraisal Tool to run these high level overviews of potential viability. This tool is widely recognised and readily available. We used it principally because it better fits the need to look at development periods which span over several years than our usual residual valuation tool (as was applied to smaller sites for our previous overview study - those are usually brought forward and built out over relatively short periods in comparison).

2.1.5 The HCA tool is not the only one suitable for such purposes. There are a

number of them that also use residual valuation principles. Others could be used in a similar way. The developers or consortia bringing forward sites may have preferences as regards appraisal tools, which the Council could consider working with. They might do so alongside testing with the HCA tool, which local authorities and the HCA increasingly use in considering the allocation of social housing grant to schemes.

2.1.6 Most tools of this type have some limitations or shortcomings. In using them

we invariably find that information has to be manipulated in to their particular



input areas, which vary from one to another. We are aware that the HCA tool can produce quirks on finance costs when RLVs fall in to negative territory (i.e. when a deficit rather than a positive land value is indicated).

2.1.7 Since it is designed for the consideration of the affordable housing content of

schemes, and the impact that has on them, the HCA tool is suitable for this purpose. We consider that at this stage there would be limited merit in using a more sophisticated tool, since more extensive assumptions and specific timings, etc, would be input. The result would be an assessment that might appear more detailed and accurate, but in fact would still be (or be even more) highly assumption based and prone to variation. At this level, essentially we are comparing the degree to which a scheme might create value (including land value), relative to the indicative costs of developing it. In any event, the HCA tool provides a suitable basis for such a high level review, and has a potential involvement in revisiting and updating this type of information as more becomes understood about the sites and the shape of proposals for them.

2.1.8 The appraisals again produced indicative residual land values, and we saw

how those varied as assumptions were changed. 2.1.9 On this occasion the key variable considered was the residential property

values and how those could impact on viability if / as they vary through time with changing market conditions. Given the LDF time span and extended delivery / potential phasing of such sites, a range of market conditions and values levels could well come in to play.

2.1.10 Other variables were considered by way of trial appraisal versions so that we

could start to consider the likely sensitivity of outcomes to key inputs varying. As the land value results can move around very significantly for these types of appraisals with changed timings and other assumptions, it was decided to focus the review on keeping a range of constants, allowing a level of comparison to be made between the outcomes across various sites. Timing of sales receipts and costs out were therefore kept constant for much of this review, but were considered in their own right through a small number of trial appraisals carried out as a part of trying to understand trends and general viability impacts (that could affect all sites). Highways contributions were generally assumed to be payable at an early point in the development; other planning infrastructure payments were assumed at a mid point.

2.1.11 Unknown or (at this stage) unquantified physical provision of community

facilities and other infrastructure, utilities upgrades and other costs usually regarded as abnormals have not been allowed for unless stated in the Appendix I worksheet prints.



2.1.12 In respect of each site, appraisals were generally completed as follows (and varied from this only where specifically stated):

• V (version) 1 – assuming base values for each site (which vary

from site to site and are stated), and no allowance for planning infrastructure requirements. Developer’s profit at 15% GDV of the market housing (6% affordable); affordable rented revenue at 30% omv; intermediate affordable tenure revenue at 60% omv.

• V2 – early stages estimated planning infrastructure costs added in to v1.

• V3 – higher values levels assumed, with variations between sites again – otherwise as v2.

• V4 – indicative developer’s profit measure increased from 15% GDV at v3 to 17.5%.

• V5 – indicative developer’s profit measure increased from 15% GDV at v3 to 20%.

• V6 – trial with varied build costs – from £1250/sq m base; down to £1150 / sq m in most cases, but up to £1350 in some (see report detail for each site).

• V7 – trial with increased affordable rented revenue to 60% omv, to match the intermediate.

2.1.13 The purpose of the above process was to help us to start considering the

range of outcomes that might be seen, and to what degree those are sensitive to potential variations in key assumptions. The outcomes (indicative RLVs) of this range of appraisals is summarised at Appendix II, which is also used to make some comparisons with a range of potential indicators on existing / alternative use values (the RLV levels which might need to be reached for the owners to be sufficiently incentivised to release their land). In practice there are no precise cut-offs – site specifics and owners’ particular positions will ultimately determine outcomes.

2.1.14 In practice, this early stages look will need to be kept under review, because

actual inputs and details will most likely move from such early stages assumptions - vary significantly in some cases.

2.1.15 However, a tone and pattern of indicative outcomes can be seen. The Council

should be able to use the range of outcomes to continue with its process of considering, staying aware of and managing, as far as it can, influencing factors and risks to viability. It should be possible to consider various assumptions combinations which give broadly comparable RLV outcomes, for example. It should help with awareness of the degree of impact that can come from different factors.



2.1.16 As in our previous work, again this review considers the key elements of profit (which is assumed by way of a fixed allowance, as a starting point rather than definitive position, within each appraisal) and of needing to produce sufficient land value so as to provide an appropriate level of incentive to the landowners. The largely greenfield nature of the majority of these strategic sites is a key factor. This is because their existing or alternative use values are generally comparatively low – when viewed against previously developed (brownfield) land which often has a significant existing or alternative use value. We also comment that where a particular existing alternative or existing use value exists, there may well need to be some level of enhancement to that price level – an “overbid” or additional level of incentive to the land owner. A similar principle applies in that there will be scenarios where a land owner has a particular land price expectation, depending on their circumstances. However, there may be no market for a particular continued or alternative use. These are all subtleties which the current level of consideration cannot pick up or effectively apply any set rules to reach more definitive positions. The comparisons we make are guides. Nevertheless the scale of comparisons enables a feel to be developed as to the likelihood of land coming forward based on the RLV outcomes from a range of scenarios.

2.1.17 Churchfields is a brownfield site, largely comprised of an intensively used

trading estate. The Central Car Park site also has significantly different characteristics to most of the others, but the residential element proposed there at present is relatively small in the strategic sense – it is proposed as part of a retail lead mixed use scheme. Besides these, and depending on their ultimate extent and boundary positions as well as ownership details, the sites may have pockets of existing mixed uses presenting varying values relationships on a more localised basis. This study is not able to consider such detail at the present time.

2.2 Assumptions - outline 2.2.1 Specific development costs, including any abnormal issues and / or potential

costs related to those have been taken account of where the Council has been able to provide information to inform estimates within our assumptions. In the main, however, development costs can only be properly reflected with detailed site-specific knowledge. This review was carried out an early stage in terms of the development of such knowledge – this area will need to be kept under review as more becomes known about the sites through close working with developers, landowners and other involved stakeholders. If such varying costs were to be considered within this study, in any event it would affect our ability to accurately compare like with like, when assessing the impacts of affordable housing requirements alongside other infrastructure burdens.

2.2.2 Since it is such a significant factor, the affordable housing principles applied

again are reiterated in outline below. Assumptions are stated here only where



they departed from those applied in our previous study (the approach to review assumptions was necessary given the nature of these site proposals).

2.2.3 The study approach and assumptions aimed to reflect as closely as possible

the thrust and strategic site sections of the Council’s pre-submission version Core Strategy. However, it is acknowledged that Adams Integra were carrying out this review during a time when the Council’s approach was building and under review prior to publishing that document. Assumptions had to be fixed early on. Where possible they were then updated as points changed, but it was not realistic to do so on a continual basis to reflect all changes by re-running appraisals on multiple occasions.

2.3 Assumptions – Residential property values range considered (and

market conditions) 2.3.1 We carried out updated desktop research on local property prices, using

much the same processes as those described in the overview study completed in January 2009. This time we focussed that review on the general locations of the strategic sites. A summary of the updated desktop research – looking at the overall (resales dominated) market and at new builds as far as were available at the time – is included at Appendix II of this study document.

2.3.2 By their very nature it was not possible to obtain or even estimate with a great

deal of confidence the values levels appropriate to many of the locations – especially the greenfield locations, but also bearing in mind that sites such as Churchfields envisage residential development in an area that currently is dominated by the trading estate. The strategic locations will need to develop their own sense of place, and it may well be that, to a large extent, they create their own value levels. Combined with the uncertain economy and property market that we are viewing this in, these factors make the current stage assessment of property and therefore land values highly indicative and subject to variation.

2.3.3 It is relevant to consider a range of values as might be seen with time, in

varying market conditions – rather than look only to estimated current or some other single level of values.

2.3.4 On review, we considered that Value Points 1, 2, 3 and 4 from our previous

study work reasonably represented the range of value levels likely to be seen at least in the early stages of delivery of these strategic sites. Owing to the growing number of appraisals and economic cost of the review, we considered each strategic site at 2 value levels – effectively higher and lower. In each case, 2 of the previous Values Points were used, the lowest one being described as the ‘Base’ value level relevant to that site; and the higher one as ‘Higher’. The 2 values levels selected varied from site to site. The worksheet prints (dwelling mixes and other assumptions) at Appendix I



include the 2 values levels for each site. These were pitched according to our estimates of how values might vary between sites, based on what we know now about various geographies. It can be seen that we estimate Salisbury City (re Central car park and Churchfields) and Netherhampton values could be higher than those for other peripheral areas around the City (including Wilton), which in turn could be higher than those applicable at Amesbury (Kings Gate).

2.3.5 However, it is simply not possible to predict future values, or to say how all

the various assumptions might change or interact with time. Value levels are a key factor, though, and we can look at the sensitivity of likely site viability to those. Values could go beyond the range considered, but these appraisal variations are informative in terms of the influence of property values. Future reviews of values and costs in market conditions relevant to the point of marketing and delivery are likely to be needed in due course. For now, the re-use of the previous Value Points (VPs) gave us a range of values for use in this review, as follows:

• Former VP 1 - £2,250/sq m (approx £209/sq ft) – relevant to Kings

Gate Amesbury (Base assumption). • Former VP 2 - £2,600/sq m (approx £241/sq ft) - relevant to Kings

Gate (Higher assumption); and to Hampton Park, Fugglestone Red, Longhedge and UKLF Wilton (base assumption).

• Former VP 3 - £2,950/sq m (approx £274/sq ft) – relevant to Hampton Park, Fugglestone Red, Longhedge and UKLF Wilton (Higher assumption); and to Central Car Park, Churchfields and South of Netherhampton Road (Base assumption).

• Former VP 4 - £3,300/sq m (approx £307/sq ft) – relevant to Central Car Park, Churchfields and South of Netherhampton Road (Higher assumption).

2.3.6 In our previous report we acknowledged and discussed the weak and

uncertain wider and local market conditions which were seen through 2008 and into 2009. We noted the type of market reporting available from various sources.

2.3.7 Despite the small signs of the potential makings of a more positive market picture since the early Spring of 2009 (following completion of the previous study), it would be premature to say that the previously reported tone and symptoms are now a thing of the past. In terms of study methodology, the continuing market uncertainties are very difficult to reflect. As we stated previously, in our view it would be impractical for a local authority to move affordable housing and perhaps other viability related planning obligations policies and targets in response to what could be relatively short-term and highly variable market conditions and adjustments.



2.3.8 One of the principal concerns with the market currently is the volume of sales being achieved (level of market activity) rather than simply the value levels. Sales volume is difficult to reflect in financial viability terms when it could be so variable over the time periods of the LDF during which these sites will be promoted. It may affect developers’ views on risk levels, and it may affect development and sales periods, and thus finance periods. These will in any event be site-specific factors and highly market sensitive. To what extent the very low levels of current market activity will continue and ultimately affect value levels and scheme delivery with time remains to be seen. Again, however, it should also be noted that value levels are still high when long-term trends are reviewed. In the past, schemes have been brought forward and have therefore been viable at similar or lower value levels.

2.3.9 There is quite a bit of market reporting at present (just for example from

sources such as The RICS and a number of major property advising firms) that points to the potential fragility of the recent and current recovery. Typically, this discusses the degree to which property prices have been protected by lack of supply rather than by deep rooted growing confidence. There are mixed signs and messages, but some key commentators are suggesting that 2010 could see values falling away again after this period of tentative recovery. Only time will tell how this develops. It is not the purpose of this report to explore the wider economic climate and property market in depth, but this context should be borne in mind and the Council should track how the picture develops as part of its ongoing monitoring processes. We encourage our local authority clients to monitor local markets and house prices.

2.3.10 In our view the key message for local authorities given this set of

circumstances is the need to monitor the market, housing delivery outcomes and trends locally - and respond to those through consideration of contingency measures and possible policy review longer term. It is also about adopting a practical and flexible approach to secure delivery of all housing types, especially in the short term. This theme will be picked up again later.

2.4 Assumptions – Overall/indicative dwelling mixes and dwelling sizes 2.4.1 The dwelling mixes have all been based on those set out at proposed Core

Policy 6 (Salisbury Community Area) with the exception of those for the UKLF site at Wilton (Wilton Community Area - Core Policy 10) and Kings Gate at Amesbury (Amesbury Community Area – Core Policy 11) where those alternative mixes were assumed.

2.4.2 Appendix I includes Adams Integra’s dwelling mix assumptions, following

these principles. The Council could use working versions of these or similar spreadsheets to help it review and consider the implications of varying



dwelling mixes, for affordable housing content, formulaic based planning obligations levels, etc.

2.4.3 Private market dwelling sizes were assumed as (square metres and square

feet, GIA):

• 1 bed flats – 40 sq m (431 sq ft) • 2 bed flats – 60 sq m (646 sq ft) • 2 bed houses – 75 sq m (807 sq ft) • 3 bed houses – 90 sq m (969 sq ft) • 4 bed houses – 120 sq m (1292 sq ft)

2.4.4 Affordable dwelling sizes were assumed as per the previous study and in

accordance with the HCA’s guideline range, i.e:

• 1 bed flats – 50 sq m (538 sq ft) • 2 bed flats – 67 sq m (721 sq ft) • 2 bed houses – 75 sq m (807 sq ft) • 3 bed houses – 85 sq m (915 sq ft) • 4 bed houses – 100 sq m (1076 sq ft)

2.4.5 In practice for this type of overview specific dwelling sizes are not crucial –

they will vary with developer and with site specifics; and this type and stage of appraisal modelling increases build costs with increasing building area on a uniform basis. The above is however an early stage attempt to reflect likely approximate dwelling types and sizes. Without doubt, a multitude of variations will occur – whether between private and affordable dwellings, between sites dependent on demand and need; or from one developer’s approach to the next.

2.5 Assumptions – Essential infrastructure (wider planning obligations). 2.5.1 These assumptions are set out at Appendix I, site by site again. As at 2.4.2,

the Council could use this type of process to build up and monitor its understanding of the types and levels of obligations. The inclusions to date are by no means definitive or exhaustive – they were based on the latest available information from the Council at the time assumptions were fixed. They have been updated in some instances, and the notes accompanying the Appendix I entries should further guide the reader as to information sources; and / or point out some areas that are or could be under review as more becomes known.

2.6 Assumptions – Indicative build costs 2.6.1 In the early study stages Adams Integra engaged its internal quantity

surveyor advisor as a part of beginning to assess physical site risks and



constraints and looking at any potential differentials in build costs between sites. Again, notes have been added to Appendix I entries where relevant. However, because there was relatively little detailed site specific information to go on at this stage (as would be expected and has also been the case in respect of other similar work we have carried out at this early point, elsewhere) we decided that it would be more true to this overview process if we were not to attempt to reflect what were mostly proving to be very minor differences in build costs, and factors that balanced each other out. Instead, we considered it more appropriate and reflective of the process (given its high level nature and the degree of other assumption making) at this stage to run all base appraisals at a build cost of £1,250 per sq m, excluding fees, contingencies and other elements as outlined below and discussed in more detail in the previous study. This rate was applied across schemes.

2.6.2 Since (despite opposing pressures from transport, energy and materials costs) construction tender prices have fallen over the last year or so, there may be an element of future proofing within the above (when considered now) but we understand that costs are expected to rise again in the short term – which could be relevant to these sites starting to come forward. As with values, actual costs will be time and site specific and again this will be an area to keep under review.

2.6.3 Owing to the level of unknowns about these sites at present, and purely to explore the sensitivity of outcomes to reduced build costs from the base assumption, we also looked at the effect of reducing the build cost by £100 / sq m to £1150 / sq m overall (and left the Code for Sustainable Homes and other uplift factors as additions still). Sensitivity of outcomes to varying build costs on the Salisbury City Centre sites of Central Car Park and Churchfields (including The Engine Shed site) were looked at through potentially increasing costs to £1350 / sq m. This is because we felt the characteristics of those sites were, if anything, more likely to mean costs varying upwards than downwards from our base point. These are assumptions made for the purpose of this study and in practice it is too early to say how costs will actually look site by site.

2.6.4 As with all assumptions and variations of those made at this stage, it is important to note that these were selected purely to allow us to explore the sensitivity of outcomes to some key variables. In practice, once more is known, scheme specifics may look very different.

2.7 Assumptions – Additions to above build costs (made in all cases). 2.7.1 The approach was as per the original study, but we have reiterated this

aspect here as this is an increasing feature in the consideration of residential building projects. Again £50/sq m (on this occasion 4%) was added to the base build cost in all cases as a notional current stage allowance for Code for



Sustainable Homes enhancements. This will need to be kept under review. This addition currently represents Code Level 3 attainment over present building regulations, and has been allowed for on all dwellings – market and affordable. The allowance was based on the CLG - July 20081 report. The Code requirements will be relevant to all sites given their timing; and the degree of the requirements will depend upon the particular timing relevant to the Governments’ legislative timeline for the Code. The current views on likely cost additions may be reviewed as the benchmark of building regulations will gradually rise (so that what is considered to be extra may vary) and technologies and the markets for these may develop.

2.7.2 A further 2% (£25/sq m) was added in recognition of renewable energy

requirements, but was kept to this additional level given that by the time Code level 4 attainment is the norm, that may prove to be a route for meeting further carbon reduction targets through renewable energy measures.

2.7.3 In fact the additional cost allowances at 2.7.1 and 2.7.2 could be relevant to

other areas (specific source of added costs is not necessarily crucial to developers) – overall we felt it appropriate to include them.

2.7.4 Although, again, specifics will vary, we anticipate that the build cost

allowances made overall should also recognise a practical approach to applying lifetime homes standards (or perhaps an element of wheelchair accessible housing) should that be part of the Council’s approach. Lifetime Homes is currently an area under review and debate but increasingly in the Government’s thinking. While it can affect scheme viability in a wider sense - from the point of view of increasing building footprints and therefore, potentially, site capacity - it does not necessarily add significant cost. Early design input minimises its impacts, and costs depend on to what degree standards are applied and what other standards are already to be met. There are overlaps, and even areas where it can compromise or not fit well with other requirements. It is an area that needs to be kept under review in terms of practicalities, costs and impacts – as part of the overall expectations from schemes. Conversations with RSL staff provide varying views, whilst cost information provided by Habinteg Housing Association (www.lifetimehomes.org.uk) suggests that the cost of meeting lifetime homes standards is up to £545 per dwelling depending on size, layout and specification of the property.

2.7.5 In recognition of the anticipated abnormal characteristics of construction at

the Engine Shed site element of Churchfields, together with the Council’s aim of producing an element of carbon neutral homes, appraisals with an increased build cost of £300/ sq m over the general base assumption of £1250/ sq m (representing a 24% cost increase over base assumptions) were

1 DCLG – Cost Analysis of the Code for Sustainable Homes (July 2008)


http://www.lifetimehomes.org.uk/


also carried out. Other scheme elements might develop in ways which also mean added costs.

2.8 Assumptions – Fees and Contingencies 2.8.1 Professional fees (at 10% of build costs) and Contingencies (at 5% of build

costs). 2.9 Assumptions – Finance costs applied to all development costs 2.9.1 7.0% interest cost applied to all development costs, with time periods driven

by assumptions as to the length of development periods – including pre-construction and any extended sales periods. A notional finance arrangement or related fee of £1m has also been allowed for each development tranche (each worksheet content as shown in Appendix I) has been included for the purposes of this exercise. At 7%, our assumption may begin to look high in time, but it is not possible to say how this picture might develop, so we decided to leave it at this level. The tone of recent reporting suggests that property finance has neither become significantly more accessible or cheaper as a result of the various Government and other interventions since the credit crunch became established. Scheme funding arrangements will vary greatly, dependent again on the type of developer, their relationships, the scheme, its location and timing, etc. As with much of this exercise, this is an assumption as has to be made for appraisals, and there are varying views as to what future trends will hold. They could move in either direction. Again, over time we would need to see how varied costs balanced with changes in sales values.

2.9.2 During the course of the study, the Bank of England Base Rate has been

maintained at 0.5%. On fixing our assumptions in the early study stages we decided to leave our finance rate assumptions unchanged from previous studies despite the now sustained period at this historically low base rate. In light of the daily “credit crunch” reporting (on the reduced availability and associated likely terms of finance), we considered this approach to be further validated and therefore to remain appropriate. On closing the study, the impacts of the low Base Rate have not been seen in any definite way (although there has been some market reporting suggesting that the low interest rate climate helped prices to stabilise as we moved through 2009). Our understanding is still that house-buying and development finance remains relatively difficult to access – at least on favourable terms, related to the risks perceived by the markets and to the fact that lending between institutions is still not working on terms or to the extent that had underpinned the active market in preceding years. We have had a climate recently whereby rate reductions have tended not to be passed on to large degree; certainly not to the full extent, to borrowers, and where they have other charges (arrangement fees etc) and conditions have often weighed against



any cuts. So far as we can see, similar applies in a commercial sense. In summary, at the time of writing, we have no reason to believe that the commercial lending climate has eased significantly.

2.10 Assumptions - Developer’s profit 2.10.1 On fixing assumptions the HCA tool guide assumption for developer’s profit

was 15% (of the Gross Development Value – GDV - meaning completed scheme value). We applied this within our base appraisals again; and again looked at a higher level of 20% given the dynamics that our previous study recognised. The HCA has since moved up its guide assumption on this element to 17.5%, in response to what is considered a more normal response to the risk reward scenario that has been seen in recent market conditions. Our consideration of 15%, 17.5% and 20% profit levels (based on GDV of the market housing) through a range of appraisal variations allows review of the results in the context of what we consider to be appropriate overall initial appraisal scope, certainly as a starting point for considering scheme viability. In the context of these very large schemes, it would need to be seen whether developers would take a varying view, based also on the scale of the profit scope available but also on how the risk profile might vary with time. As an early stages position, given that assumptions need to be made to inform the review, we think it appropriate to make a fixed allowance. Developers may in practice look at a range of profit / return indicators, and alternatives could be reviewed in comparison to the above.

2.10.2 It should be noted that in accordance with the HCA appraisal tool guide

inputs, we assumed the developer’s profit at 6% of the GDV applicable to the affordable housing. In our experience this dual profit approach is often applied because usually the developer is acting more as a contractor to an RSL on the affordable homes. The affordable housing element is in many ways similar to off-plan sales and although revenues are usually greatly decreased in comparison to market levels, the risk profile associated with that element of schemes should be greatly reduced (especially in a weak private sales market).

2.11 Assumptions – scheme timing/duration 2.11.1 Each of the Appendix I worksheet prints represents a scheme element that

we assume commences now. Initially we were instructed to consider the early (first 5 years only) sites – or elements of sites, but later in the study period we extended the appraisals to also include those scheme elements which are anticipated to come forward after those early years of the LDF timeframe – based on a “front loading” strategy for housing delivery, but also recognising that these large schemes (when viewed overall) would continue beyond that. The Council envisages continuous delivery on each.



2.11.2 Seeking to project even 5 years ahead means an assumption filled process – with assumptions often having to be informed by pure estimates and judgment rather than by comparison or evidence as such. In light of this, in our view there is no point seeking to project beyond 5 years, particularly in such an uncertain economic climate, by making different assumptions that aim to reflect the property market and development / construction climate that far ahead. Instead, we have dealt with those later stages of strategic housing growth by again assuming them to be starting now and taking a further period of time each, dependent on the overall timescale estimated at the point our assumptions were made. This means we look at up to a 5 year delivery programme for the early years of each site (some are anticipated to take less than 5 years), and then at the remaining dwelling numbers by additional appraisals – in one case (Fugglestone Red) by way of 2 further appraisals given the overall anticipated timescale and rate of delivery. We consider it to be more informative and appropriate to review viability in that way – as we see it now – for the current purpose. As above, periodic reviews are then likely to be necessary as the picture develops. The HCA tool has been used appropriately in the circumstances.

2.11.3 The only strategic site elements that we assumed would be delivered in a

shorter period than 5 years on site (in each case) were those producing the smaller dwelling numbers; i.e:

• Churchfields first 200 dwellings of comprehensive scheme –

during early years – assumed 3 years on site. • Churchfields (Engine Shed) – 100 dwellings – during early years of

comprehensive redevelopment scheme - assumed 2 years on site. We understand this site is to come forward as part of neighbouring Churchfields, but have kept our appraisals separate as per the early study stages approach and discussions with the Council, because it has different characteristics.

• Central Car Park – 200 dwellings – during early years – assumed 2 years on site (part of retail lead mixed use scheme; so arguably greater uncertainties over timing).

• Fugglestone Red indicative final stages – 200 dwellings - indicative years 11 to 12 – assumed 2 years on site.

2.11.4 Within each scenario, the first dwelling sales were placed at 12 months from

the commencement of development; and the last at the end of the 5 year (or sooner, in the case of 2.11.3 examples) period.

2.11.5 Affordable housing completions and revenue were similarly spread from 12

months from commencement through to one year prior to the end point in most cases. In the case of smaller sites or elements of sites, the affordable housing completions and revenue were assumed to be spread on a similar basis. For example on the Engine Shed element of Churchfields (2 year



estimated development period), the affordable homes were estimated to complete between months 9 and 18.

2.11.6 Planning obligations were spread at this stage – with highways /

transportation planning obligations costs placed at 12 months (i.e. before likely first occupation of dwellings) and other, community facilities based planning obligations costs generally estimated at mid points during the development periods (usually at 24 or 36 months in). In the case of smaller sites or elements of sites, the planning obligations costs were assumed to fall mid development. For example on the Engine Shed element of Churchfields (2 year estimated development period) again, those were all estimated to be due at the 12 month point.

2.12 Assumptions – Affordable Housing 2.12.1 We include an affordable housing element of 40%, based on the Council’s

target proposal, whereby the developer receives a payment from an RSL (or other affordable homes provider) for those completed affordable homes. As with the first study, this level of receipt is based on predetermined calculation, and it is not at a level comparable with open market values. Again, this is where the key viability impact of affordable housing flows from, since development costs are usually broadly similar to those for the private market homes. For grant funded affordable housing, the sums paid by the RSL will have to be within HCA eligibility levels.

2.12.2 Assuming that a developer will require a minimum fixed profit margin on any

given site to balance risk and obtain funding, beyond a certain point it is, therefore, the land value that will be affected by the introduction of affordable housing or other infrastructure requirements. In this sense (and although there can be significant positive risk profile and cash flow affects similar to those from “off-plan” sales) affordable housing is viewed as a significant cost element to the developer’s appraisals, in much the same way as other planning infrastructure requirements (planning obligations).

2.12.3 On this occasion the affordable housing dwelling mix target requirements

assumed in all cases except for UKLF at Wilton and Kings Gate at Amesbury, have been informed by proposed Core Strategy Policy 6 (‘Meeting Salisbury’s Housing Needs – Salisbury Community Area: Demand for affordable housing by size and type’). Of the 40% total affordable housing proportion in the Salisbury Community Area instances (most sites), 74% is based on affordable rented tenure; 24% intermediate affordable tenure. The indicative subdivisions of that mix by dwelling type, as applied in the appraisals, are set out in each of the spreadsheets at Appendix I.

2.12.4 In the case of UKLF at Wilton, the equivalent starting point tenure mix (from

the 40% affordable housing) was 82% affordable rented tenure; 18%



intermediate. This assumption was informed by Core Policy 10 (‘Meeting Housing Needs in Wilton Community Area’). Again, the detail is at Appendix I.

2.12.5 In the case of Kings Gate at Amesbury, the equivalent starting point tenure

mix (from the 40% affordable housing) was 63% affordable rented tenure; 37% intermediate. This assumption was informed by Core Policy 11 (‘Meeting Housing Needs for the Amesbury Community Area’). Again, the detail is at Appendix I.

2.12.6 We have looked generically at the intermediate tenure content, since what

counts for financial viability is the level of revenue it produces for the developer. This reflects the increased likelihood that it will be seen in varied forms and combinations within schemes from now on. This is purely for the purposes of financial viability and fixing assumptions, where we are looking at increased payments to the developer compared with affordable rented tenure (particularly with no grant). It does not prevent the Council and its range of partners from considering and perhaps trialling a range of tenure models, or from varying the assumptions we have applied. Indeed such an approach is to be encouraged – we expect that there will be a role for a wider menu of tenure options.

2.12.7 The key assumptions for this viability exercise are the revenue levels

provided to the scheme by the affordable housing. In tune with the high level of this study, rather than reflecting detailed site specifics likely to be determined in due course related to much smaller groups of affordable housing, we applied more generic assumptions. Using our experience of a typical range of RSL type (‘ProVal’ financial appraisal) outcomes, as discussed in the previous study, here we made base revenue assumptions (to the developer) for the affordable housing as follows:

• Affordable rent (without grant) – 30% open market value (omv). • Intermediate tenure – 60% omv.

2.12.8 Through appraisals purely to consider sensitivity of outcomes to a range of

factors, we also considered the effect of increasing the affordable rented housing revenue (level of receipt for the developer on sale of completed affordable homes to an RSL, for example). This was on a trial basis, associated with how the appraisals and scheme viability might alter if the revenue produced by the affordable rented homes were boosted to match the intermediate affordable housing revenue of 60% omv. This would most likely mean social housing grant of perhaps £15 -25,000 per person housed in affordable rented tenure across the schemes, dependent on dwelling type (or alternatively a tenure mixed skewed more towards a range of intermediate tenure (or reduced, still affordable rented based provision) on a cascaded basis in the event of viability and grant funding availability combining to mean the affordable content of scheme needs to be reviewed.



2.12.9 A range of outcomes could be possible, and later on in the report we will

touch on how the Council might even need to defer final agreement of the affordable housing content (and perhaps scope of some other obligations) until more is known about the market and other delivery conditions relevant to each site over time.

2.13 Existing/alternative use values of sites 2.13.1 Regarding existing/alternative use values of previously developed

(‘brownfield’) sites or elements of sites, the Council should be aware that the Commercial Property Market has been suffering and seen a greater degree of downturn, even, than the residential market. This again is a consequence of the financial markets crisis and period of recession that we have experienced (or in some views are still experiencing), resulting lack of available finance and very low levels of property occupier and developer activity. It has been exacerbated by company rationalisations and failures and through planned moves and expansions going on hold. Although a generalised statement, demand for commercial property has fallen very dramatically with severe consequences for values. This factor needs to be borne in mind where sites comprise areas having existing commercial uses or alternative use possibilities. The comparisons (with residential development land values) that are relevant are likely to change over time. The relative positions, in viability terms, of alternative proposals or options for sites could alter. Furthermore, we have also mentioned additional variables that can come in to play regarding particular owners’ expectations, and sufficient incentive to sell.

2.13.2 In some cases, dependant on site specifics and owners’ circumstances, it

may be necessary for residential development land value to exceed an existing or alternative land use value by some way. The basic comparison made will vary, as will the degree of “overbid” needed to see that a site is made available. These factors will also be dependent on the nature and size of the marketplace for an established use or alternative proposal.

2.14 Other costs and fees 2.14.1 In completing the HCA tool based appraisals we also included a range of

other assumptions, some of which were increased from our smaller sites focussed overview study in recognition of the scale of these projects, as follows:

• Marketing and sales fees increased to 4% of GDV. • Fees on acquisition 1.75% of site value. • Legal fees on sale £600 per dwelling.

(Noting that these are purely assumptions for this study, and that again specifics will vary).



2.14.2 We expect that there may be some economies of scale relative to some of the

assumptions made. However, there may also be additional cost areas incurred through site option or acquisition and investigation/promotion processes.

2.14.3 Appendix I lists particular costs assumptions that have been made in addition

to the above – for example on certain types of surveys and miscellaneous contributions. These vary, but include current stage estimated costs for such areas as ecology related issues, air quality management, phosphates management (water supply related), archaeology, noise mitigation and the like – where those have been provided by the Council or indicated as relevant through Adams Integra’s consideration of sites.



3 RESULTS - PROPERTY MARKET & TRENDS 3.1 Background 3.1.1 This section provides context for the consideration of results, bearing in mind

that we have to look at a wider possible range of market conditions and values that might be seen through those.

3.1.2 It then goes on to run through the indicative outcomes for each site in Chapter

4. 3.2 Property Market

3.2.1 Sales volumes and mortgage approvals have picked up from the Spring of

2009, with prices now gradually increasing so that at present with each passing month the trend is that previous price falls are being eroded gradually.

3.2.2 However, we noted above that some commentators are terming this a fragile

period of market recovery at present. Appendix III includes some market reporting extracts noted during the study period.

3.2.3 It should be noted that given the recent and ongoing downturn in market

conditions, the property market and its likely next direction is particularly difficult to assess at the moment - both in a wider sense and more locally. By looking at a range of values to drive our large number of appraisals, however, this study process is able to be used in a way which enables the review of viability outcomes in response to value levels as those vary.

3.2.4 A strong feature of the housing market which has developed over the past year or more (and appears to be universal) is the dramatic slow-down in the rate of sales (number of sales being agreed and proceeding). The impact of the vastly reduced level of market activity (volume of house sales) has significantly affected the level of development activity by increasing perceptions of uncertainty and risk. It remains to be seen how this will play out fully in terms of the financial appraisal of schemes and sites.

3.2.5 We feel there is no doubt that current conditions add up to a negative financial viability impact when compared with how schemes are viewed and pursued in a more stable, confident market. Developments in general will be taking longer to sell (with build progress possibly slowed and costs outstanding for longer as a result) and varying packages of incentives are typically being offered. We have to envisage a more stable market and development industry which will provide demand for, and have the capacity to supply, new development. Along with the state of the market, the number of new builds coming forward for sale at any one point will in part determine the



level of values. Depending on how the timing works out in due course, there could be effective competition between sites. The Council and developers will need to consider this through aiming not to over-supply the market at particular times and locations.

3.3 Results Trends 3.3.1 The overall trend of results shows a decrease in residual land value (RLV) for

all site sizes/types in all areas as:

• Market property values decrease. • The proportion of affordable housing increases. • Affordable rented tenure is increased (unless with significant grant). • Availability of grant is reduced/removed. • Developer’s profit is increased. • Planning obligations/infrastructure requirements are increased, and • other costs are added (e.g. increased Code for Sustainable Homes

requirements, renewable energy, etc).

3.3.2 A reduction in RLV would be seen if any of the costs within the appraisals are increased or the affordable housing revenue to the developer reduced whilst maintaining the same private sales values. These are all normal trends encountered in any such study (or indeed site-specific appraisal). They demonstrate the dynamic nature of the development process and the fluid nature of any appraisal modelling that endeavours to understand or demonstrate the process.

3.3.3 The above will all have an impact on development viability because the sums of money remaining to purchase land after all costs are met (i.e. the RLVs) reduce as development costs increase (including increasing affordable housing requirements, in the context of this study). The importance of strong sales values to viability, particularly as development costs (again including affordable housing) increase, can clearly be seen.

3.3.4 A combination that includes all of the factors which decrease RLV (as per the examples listed above) will have the greatest impact on the viability of a scenario.



4 RESULTS SUMMARIES BY SITE 4.1 Results summaries – by site

In the following section we will discuss the indicative RLV results, generated from our range of assumptions. Then, at 4.19, we will consider how these might be related to existing / alternative use values.

4.2 Hampton Park II 4.2.1 At base values £2,600/m2 with 40% AH (affordable housing) appears to

produce a small positive RLV of up to about £2m depending on specific timing assumptions. This is before planning infrastructure obligations, additional surveys and likely other costs. (Appraisal v1)

4.2.2 Including those likely other costs as estimated to date, this RLV falls to about

-£2.5m (negative = deficit), but again depending on the timing requirements of the obligations. At this point £2,748,819 community Infrastructure and £2m transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £105,000. (Appraisal v2).

4.2.3 Leaving all other v2 assumptions unchanged while increasing omvs to

previous VP3, i.e. £2,950/m2 moves the v2 approx deficit significantly – back in to positive territory with an approximate RLV of £4-5m. (Appraisal v3).

4.2.4 To further explore the sensitivity of outcomes to changes in key variables, if

we take the Appraisal v3 outcome (as at 4.2.3) and increase the developer’s profit assumption to 17.5% of GDV on a trial basis, the RLV reduces to around £3.4m (appraisal v4).

4.2.5 Further increasing the developer’s profit assumption on the private housing to

20% of GDV reduces the equivalent outcome to an RLV of approximately £2.1m (appraisal v5).

4.2.6 Again, looking at sensitivity, if we reduce the build cost assumption (before

fees and finance etc) from £1250/sq m overall by £100/ sq m to £1150/sq m overall then the v3 RLV outcome of £4-5m is boosted to say £8.5 – 9m (RLV almost doubled – appraisal v6). This shows just how sensitive these schemes could be to cost levels.

4.2.7 Finally on examples regarding sensitivity, if we increase the affordable

housing revenue (to the developer, in return for completing affordable homes which are sold to an RSL, for example) for the affordable rented homes to the same level as used in base assumption for intermediate tenure (i.e. 60% omv), we see the RLV on this combination of assumptions increase very significantly (to about £12m) – appraisal v7. This scenario envisages



significant public subsidy (usually in the form of HCA social housing grant) – potentially in the range £15 – 25,000 per person housed within affordable rented tenure – dependent on dwelling type.

4.2.8 The above indicative outcomes are before any expenditure required in

connection with the Country Park proposals is taken in to account.

4.3 Hampton Park II Summary 4.3.1 Depending on the combination of assumptions applied at this initial review

level, we see wide ranging potential outcomes – from an RLV indicated at zero (or even a deficit) to an RLV of up to around £12m. Outcomes outside this range are possible too.

4.3.2 At the higher value levels trialled, this may produce close to the level of RLV likely to be required (even with affordable housing at 40% and other costs assumed) – although we cannot be sure what that level would be. This suggests that the scheme could generate up to about £1m/Ha land value (per developable hectare) at the upper end of this range of outcomes, on this basis. Given the range of potential inputs and how those might interact, the RLV actually produced may well be somewhere within this range up to £1m/Ha – and within that range could still be sufficient to see the scheme produce 40% affordable housing.

4.3.3 However, the market is uncertain, with the possibility of values below the higher level trialled. If other less favourable combinations of assumptions with costs, profits and affordable housing revenue are applicable, it appears that there may be insufficient value in the scheme to support as much as 40% affordable housing on the assumptions applied and alongside other obligations; whilst also creating a sufficient level of land value. The point at 4.2.8 about the Country Park may add to this view being a more likely outcome, but the details would need to be reviewed once more is known.

4.3.4 This is not to say that this site would not be capable of providing a significant proportion of affordable housing in any event, measured alongside other costs and obligations – to be reviewed once more details and the relevant delivery conditions (market and otherwise) are known.

4.3.5 Factors which are likely to be key determinants of viability ultimately:

• Market conditions and market value levels as influenced by those.

• Affordable housing revenue levels – e.g. whether grant supported or not.

• Build costs. • Collective burden of other costs and obligations – including in

this case the Country Park proposals.



4.3.6 This scheme appears to give no clear reason for the Council to depart from a

position of targeting 40% affordable housing, but affirming or reviewing that in a practical way in response to further information and greater knowledge of actual delivery criteria.

4.4 Fugglestone Red 4.4.1 At base values £2,600/m2 with 40% AH produces a small positive land value

(RLV) - bearing in mind there is approx 31 Ha residential development scope assumed - of only about £5-6m. This is before planning infrastructure obligations, additional surveys and likely other costs. (Appraisal v1)

4.4.2 Including those likely other costs as estimated to date, this RLV becomes a deficit of up to about - £5m (negative), depending on the timing requirements of the obligations. At this point a total of £6,872,047 community Infrastructure and £5m transportation costs (£4k/dwelling) have been assumed, along with additional site survey costs of £187,500. (Appraisal v2).

4.4.3 Leaving all other v2 assumptions unchanged while increasing omvs to previous VP3, i.e. £2,950/m2 moves the £5m approx deficit to a positive RLV of around £12-13m. (Appraisal v3).

4.4.4 To further explore the sensitivity of outcomes to changes in key variables, if we take the Appraisal v3 outcome (sensitivity testing as at 4.2.4 again) and increase the developer’s profit assumption to 17.5% of GDV on a trial basis, the RLV reduces to around £9.5m (appraisal v4).

4.4.5 Further increasing the developer’s profit assumption on the private housing to 20% of GDV reduces the equivalent outcome to an RLV of around £6.5m (appraisal v5).

4.4.6 Again, looking at sensitivity, if we reduce the build cost assumption (before fees and finance etc) from £1250/sq m overall by £100/ sq m to £1150/sq m overall then the v3 RLV outcome of £12-13m is boosted to say £22.5m (RLV almost doubled – appraisal v6). Again, this shows the potential sensitivity to cost levels.

4.4.7 Finally on examples regarding sensitivity, if we increase the affordable housing revenue (to the developer, in return for completing affordable homes which are sold to an RSL, for example) for the affordable rented homes to the same level as used in base assumption for intermediate tenure (i.e. 60% omv), we see the RLV on this combination of assumptions increase very significantly (to around £30m) – appraisal v7. This scenario envisages significant public subsidy (usually in the form of HCA social housing grant) – potentially in the range £15 – 25,000 per person housed within affordable rented tenure – dependent on dwelling type.



4.4.8 The above indicative outcomes are before any expenditure required in

connection with the Cemetery proposals on / adjacent to this site is taken in to account.

4.4.9 To save repetition, in summary there is a potential range of outcomes similar to those for Hampton Park. At this stage, again there appears no reason to depart from 40% affordable housing as the applicable target as a basis for delivery discussions – with the viability determinants also being similar (in this case with the cemetery requirements potentially adding to cost burdens).

4.5 Central Car Park (“Maltings”) 4.5.1 At base values £2,950/m2 and other base assumptions with 40% AH

produces a positive RLV of up to about £3.5m depending on specific timing assumptions. This is before planning infrastructure obligations, additional surveys and likely other costs. (Appraisal v1)

4.5.2 Including those likely other costs as estimated to date, this RLV falls to about £1.6 - £1.7m (is roughly halved), but again depending on the timing requirements of the various obligations. At this point £1,103,365 Community Infrastructure and £0.8m transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £148,113. (Appraisal v2).

4.5.3 Leaving all other v2 assumptions unchanged while increasing omvs to previous VP4, i.e. £3,300/m2 moves the indicative RLV outcome up to about £4.6m (Appraisal v3).

4.5.4 Increasing the developer’s profit assumption to 17.5% of GDV on a trial basis, reduces the RLV to around £4m (appraisal v4).

4.5.5 Further increasing the developer’s profit assumption on the private housing to 20% of GDV reduces the equivalent outcome to an RLV of approximately £3.4m (appraisal v5).

4.5.6 Again, looking at sensitivity, but on this occasion consider a potential increase in build costs given the location and nature of the site and possible scheme, (before fees and finance etc) from £1250/sq m to £1350/sq m overall then the v3 RLV outcome of about £4.6m reduces to approximately £3m (i.e. approximately 30% reduction) – appraisal v6.

4.5.7 Increasing the affordable rented housing revenue to 60% omv again boosts the potential RLV significantly (to about £8m compared with the v3 outcome) – appraisal v7.



4.6 Central Car Park Summary 4.6.1 Depending on the combination of assumptions applied at this initial review

level, again we see wide ranging potential outcomes.

4.6.2 At this stage it is only possible to start considering the residential element of this scheme. Whilst this would represent a reasonable starting point for considering viability of that element, depending on how the wider scheme is to be funded and delivered it might well have to be considered as a component of that as more becomes known. At the lower end of our range of outcomes it is probable that if this residential development were viable it would be marginally so. Whilst build costs may not be higher here, they could be and it appears likely that good central Salisbury values justified by a high quality scheme will be necessary to drive this part of the scheme’s viability (particularly if 40% affordable housing or a level approaching that is to be achieved). In our view, however, again this need not at this stage mean moving away from a practically applied affordable housing target of 40% in tune with the overall picture.

4.6.3 The main determinant of, and risk to, viability of this retail led mixed use scheme is currently the economic downturn. In reality, whilst the residential element could provide a useful boost to the viability of the wider scheme, the mixed use scheme will not proceed until developers and investors have greater confidence and access to more favourable finance terms. Many schemes like this have currently been delayed owing to the economic and market circumstances. We are not sure whether consideration may be given to promoting a phased development with a view to kick-starting confidence in the scheme’s wider prospects, but even that type of approach might not gain momentum at present. Scheme viability will need to be revisited.

4.6.4 Again, other factors which are likely to be key determinants of viability include:

• Affordable housing revenue levels – e.g. whether grant supported or not.

• Build costs – design, nature and location of site. • Collective burden of other costs and obligations – including site

clearance, service utilities, flood risk, meeting wider planning obligations for this City Centre site, etc.

• We understand that the site is in fragmented ownership – this in itself amounts to a risk to viable delivery and will need to be managed so that individual expectations and timing issues do not unduly frustrate the wider objectives; and to make sure that site assembly costs can be controlled. As previously developed land within the City centre, they may be arguments mounted about the prospects of alternative uses if development values



related to the comprehensive scheme fall away – which could boost individual value expectations.

4.7 Churchfields 4.7.1 The current stage appraisals basically follow the same assumptions, aside

from relatively minor cost element differences regarding estimated infrastructure and survey requirements, as for the 200 dwelling residential element at Central Car Park. This means we see basically the same scale of indicative RLVs and results pattern as for that site (see 4.5 and 4.6 above). This applies through appraisals v1 to v7, since the broadly same exploratory variations for reviewing sensitivity of results are relevant here, at this stage. Clearly that picture could alter as more becomes known about the sites.

4.7.2 The Churchfields comprehensive redevelopment is targeted to deliver up to 1100 dwellings along with leisure and business uses. The 200 or so dwellings proposed for the Core Strategy’s early years form part of that – meaning that the redevelopment is proposed to continue with a further 800 dwellings on the main site, and approximately 100 dwellings on the “Engine Shed” site immediately to the north. We deal with the Engine Shed site separately at present, but only because its characteristics are likely to mean distinctions and particular issues to be borne in mind from a viability viewpoint.

4.7.3 In the case of the v2 appraisal for the first 200 dwellings, allowances at this stage have been made for £1,104,164 community Infrastructure and £0.8m transportation costs (£4k/dwelling), along with additional site survey and miscellaneous costs of £142,000.

4.7.4 As with Central Car Park, albeit possibly to a lesser extent this site will also be affected by the market’s appetite for leisure and business space; as well as for the residential. This site for these new homes is currently part of an active and apparently thriving industrial estate accommodating around 200 businesses. Currently, there are many unknowns involved in bringing this land forward – both in terms of potential increases to costs related to site investigations, physical remediation and other works; but also potentially in connection with relocation arrangements and expenses and possibly even incentive packages for existing businesses.

4.7.5 We are not aware of the land ownership scenario(s) here. This could be relevant in terms of land value expectations. Whilst the commercial property market has been suffering more, even, than the residential market – with very substantial declines in values – it is assumed that there will still be some relatively valuable interests to acquire or relocate (compared for example with a site starting out as agricultural such as others reviewed here). This could be another significant factor in the ultimate viability equation in therefore in determining what the site can deliver overall, on its redevelopment. It is also possible that the economic downturn could have a perverse impact ultimately



helpful to the residential proposals - whereby more space is vacant on the estate and existing / alternative use commercial values have fallen. Only further exploratory work will inform how these dynamics might start to play out here.

4.7.6 Viewed in the way we have to date for this initial viability overview, the continued Churchfields (main site) scheme which is proposed to deliver a further 800 dwellings would basically create value in line with that (pro-rata) indicated to be produced by the early years 200. On the above basis, this could mean a further approximately £6.5m land residual as a likely minimum – but potentially several times that (up to about £30m) depending on how the market, values and cost assumptions interact in due course.

4.7.7 The Council’s Development Template for Churchfields indicates the need for a wildlife buffer zone to the south of the site, alongside the River Avon. No additional appraisal allowance has currently been made in respect of this.

4.8 Churchfields Summary

4.8.1 A bold vision will be needed here. Given the higher level of values that we

believe could be achieved for this central Salisbury riverside location, the early stages RLV outcomes could be sufficient to support up to 40% affordable housing particularly with grant funding. However, this will be highly dependent on the type of housing offer and sense of place that is created here (to support demand and values); along with the extent of abnormal site issues (remediation etc) that are to be overcome and the degree to which the relocation of existing businesses involves the funding of support / relocation measures or packages.

4.8.2 These factors combine to create the main viability influences and risk factors to be monitored here. The economic backdrop could have some interesting side effects in boosting short term interest in pursuing residential here, relative to commercial investment, if unhelpful in economic development terms. Achieving good values for the private residential housing will be a key driver of viability here.

4.8.3 Bearing in mind the range of potential outcomes, the factors discussed need not, in our view, mean a departure from 40% affordable housing point being the target to seek to achieve, and to measure delivery against.

4.9 Engine Shed, Salisbury 4.9.1 It is envisaged that this site would most appropriately be brought forward as

part of the Churchfields comprehensive redevelopment, but we have assessed it separately just for this initial review purpose given its characteristics and the vision for it.



4.9.2 At base values £2,950/m2 (VP3) with 40% AH produces a positive RLV of about £1.2m on the assumptions applied. This is before planning infrastructure obligations, additional surveys and likely other costs. (Appraisal v1).

4.9.3 Including those likely other costs as estimated to date, this RLV indication falls by around £1m leaving an approximate RLV figure of just under £300,000, again with specific outcomes depending on the timing requirements of the obligations. At this point £538,862 Community Infrastructure and £400,000 transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £95,000. (Appraisal v2).

4.9.4 Leaving all other v2 assumptions unchanged while also adding a significant additional build cost allowance (an extra £300/m2 for this purpose, i.e. 24% increase to build cost) to reflect the Carbon Neutral aspiration for this site element, produces an RLV of approximately -£2.1m (negative RLV, i.e. deficit) (Appraisal v3 in this case).

4.9.5 Taking this new v3 base (after extra build cost allowance), then increasing omvs to previous VP4 level, i.e. £3,300/m2, wipes out about £1.5m of the v3 deficit, leaving a deficit (negative RLV) of approximately -£600,000 on basis of the assumptions made (Appraisal v4).

4.9.6 Given that the Council’s information indicated that this site may be promoted for an “affordable” carbon neutral housing scheme, it could be that the scheme revenue assumptions have to be reduced to reflect the fact that all dwellings would produce significantly lower level than market receipts (as opposed to the 40% affordable element being at lower levels). In reality, there could be any number of tenure mix, funding and other affordable housing assumptions which would produce varying results. However, for the purposes of this exercise, and purely indicatively, if we reduced all revenue to our VP3 linked (base value for this site) assumption of £1770/sq m then the appraisal v4 RLV deficit would be increased to approximately - £4.6m. Here it should be noted that to maintain this level of affordable housing revenue, a significant amount of grant or other funding would be needed – it is likely that the funding gap would be greater than the approximate £4.6m deficit indicated here.

4.9.7 The effective costs of these aims or requirements are indicated above. Given the nature of this site and the likelihood that additional abnormal costs would be added to the appraisals undertaken to date once more is known about it, the land value expectation should effectively be that the site is worthless or even a financial liability (depending on abnormal issues ultimately identified). The indications are that this is publicly owned land, so this may not be a barrier to such a development in itself.



4.10 Engine Shed Summary 4.10.1 These viability implications will need to be borne in mind and possibly treated

as negative financial impacts on the wider Churchfields scheme if pursued in that way.

4.10.2 On the public land led basis (if applicable), and with a sense of place being created at Churchfields as an attractive new residential and mixed use location close to the City to support good central Salisbury values, then alternative routes could be considered for this site.

4.10.3 Treated as a unique part of the overall redevelopment it is conceivable that a mixed market and affordable tenure housing scheme could potentially be created if this element needed to stand alone financially. This route would more than likely not produce as much as 40% affordable housing, however, dependent on detailed review of scheme specifics and particularly with little or no social housing grant input. The input of grant could have a significant positive effect on viability.

4.10.4 The site has no current access point, and significant work would need to be undertaken to create one. Further survey and assessment work would need to be done on this, while the site levels / made ground, retaining walls and rail network issues would also need to be reviewed.

4.10.5 A balancing of requirements and obligations could be looked at to try to get the site working for a mixed tenure scheme, market led; and assuming more modest environmental standards were to be met. The bringing forward of a carbon neutral scheme would however mean a significant funding gap being closed. Were this to be a dedicated mixed tenure affordable housing scheme (i.e. affordable, not market, led), then the funding gap would grow very significantly.

4.10.6 Treated as an inclusive part of the wider Churchfields redevelopment (financially), then it might be possible to develop this in accordance with the initial vision for it, as an “Eco Quarter” of the wider scheme (where there was a particular emphasis on environmental credentials), or similar. In this case, it might be possible to dilute the scheme’s financial impact within the bigger picture to an extent, but this will need to be considered further as effectively it would amount to a burden on the wider scheme.

4.11 UKLF HQ, Wilton 4.11.1 At base values £2,600/m2 (VP2) with 40% AH produces a low positive RLV of

about £2.1m, given the scale of the proposals. This is before planning infrastructure obligations, additional surveys and likely other costs (Appraisal v1).



4.11.2 Including those likely other costs as estimated to date, this RLV falls to about -£1.8m (negative RLV = deficit), again with specific outcomes depending on the timing requirements of the obligations. At this point £2,569,785 community Infrastructure and £1.8m transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £297,000 (Appraisal v2).

4.11.3 Leaving all other v2 assumptions unchanged while increasing omvs to previous VP3, i.e. £2,950/m2 almost doubles the v1 approx RLV – produces a result of around £4 - 4.5m; while still not a large RLV for the scale of development a significantly healthier indication than the v2 deficit (Appraisal v3).

4.11.4 Increasing the developer’s profit on a trial basis to 17.5% (v4) and then 20% (v5) based on GDV of the private housing, deteriorates the RLV indications as would be expected – from the appraisal v3 position to indicative RLVs of about £3.1m and £2m respectively (the latter an equivalent result to going back to base values without infrastructure costs (v1 appraisal outcome).

4.11.5 Purely on a trial basis, reducing the base build cost rate (for the housing construction itself) from £1250 / sq m to a trial at £1150/sq m boosts the appraisal v3 RLV indication significantly again - to about £7.5m.

4.11.6 However, with regard to trial appraisal v3, this site is extensively covered in a range of buildings, hard surfacing and apparatus. It is very likely that harmful substances will be found during demolition, that there will be a range contamination issues and significant below ground obstructions to deal with, as well as other issues.

4.11.7 These factors represent significant risks. They are unknowns and will, very likely, influence and impact on viability beyond the assumptions we have made to date. Costs incurred in various surveys could grow significantly. While these types of risks and costs should be reflected in the land price, they could amount to up to several £m and, depending on the circumstances, could mean the above figures all move significantly. The high degree of sensitivity to cost levels, particularly as values assumptions are lower, has been noted. The trend shown with the v6 trial appraisal could be reversed on a site such as this, as abnormal costs come in to play.

4.11.8 Again just to illustrate potential impacts of varying assumptions, a v7 appraisal here (increasing the affordable rented revenue to 60% of omv as per the intermediate affordable tenure) produces an RLV indication in excess of £10m.



4.12 UKLF Summary

4.12.1 The land value should reflect the nature of the site and in particular what we anticipate will be a range of clearance, ground conditions and possibly other issues. However, the values that Wilton appears currently to attract in general (other than for older, character property) suggest that this could well be a lower value location than some others considered. As such, the site may well not support 40% affordable housing by the time a range of other issues is resolved, even with realistic land value expectations from the start. There will be a lot of calls on the value created here. Higher values than those currently estimated would have a significant positive effect, however, as would social housing grant input and economic solutions to anticipated physical site issues.

4.13 Netherhampton Road, Netherhampton/Harnham 4.13.1 At base values £2,950/m2 (VP3) with 40% AH produces a positive RLV of

about £7.5 – 8m. This is before planning infrastructure obligations, additional surveys and likely other costs (Appraisal v1).

4.13.2 Including those likely other costs as estimated to date, this RLV falls to about £4 - 4.5m, again with specific outcomes depending on the timing requirements of the obligations. At this point £2,209,957 Community Infrastructure and £1,600,000 transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £79,000 (Appraisal v2).

4.13.3 Leaving all other v2 assumptions unchanged while increasing omvs to previous VP4, i.e. £3,300/m2 again approximately (or this time more than) doubles the v2 RLV indication – produces a result of around £10m (Appraisal v3).

4.13.4 The v4 trial appraisal on this one, looking at developer’s profit increased to 17.5%, reduces that v3 RLV indication by just over £1m to around £9m.

4.13.5 Thev5 trial appraisal this time, looking at developer’s profit increased to 20%, reduces that v3 RLV indication by approximately a further £1m (from v4) to around £7.8m.

4.13.6 The v6 trial (build costs varied – reduced here to £1150 / sq m) boosts the v3 RLV indication to about £13m.

4.13.7 The v7 trial (increased affordable rented revenue to 60% omv again) increases the v3 result to approximately £16-17m.



4.14 Netherhampton Road Summary

4.14.1 A positive overall tone of outcomes for this site, especially bearing in mind its Greenfield starting point. All scenarios (assumptions combinations) reviewed at this early stage and level would appear to point to a viable scheme, given a suitable market climate, capable of producing target levels of affordable housing. We think at this stage the site is a relatively straightforward one to develop.

4.14.2 There are issues to be resolved and no doubt landscape and ecological matters to address, possibly together with service utilities factors (as with most other sites). However, bearing in mind its existing agricultural use this site should deliver sufficient land value whilst providing 40% affordable housing and a range of other reasonable planning obligations (detailed package to be resolved).

4.15 Longhedge (formerly known as Beehive), Old Sarum 4.15.1 Originally we appraised this site base on the first 500 homes targeted here in

the Core Strategy early years. Discussions with the Council developed following completion of initial base appraisals on the assumption of those numbers, which we will discuss, as follows.

4.15.2 At base values £2,600/m2 with 40% AH produces a positive RLV of up to about £2m – an equivalent result to Hampton Park II base result, as would be expected – basically the same assumptions are driving this appraisal at this stage. This is before planning infrastructure obligations, additional surveys and likely other costs. (Appraisal v1).

4.15.3 Including those likely other costs as estimated to date, this RLV falls to about -£2.6-2.7 m (negative = deficit), but depending on the timing requirements of the obligations. The appraisal produces a marginally bigger deficit (more negative RLV) than the equivalent Hampton Park II appraisal this time, because additional cost allowances have been made (air quality monitoring contribution £10k; noise mitigation £100k). This means at this point £2,758,819 community Infrastructure and £2m transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £260,000. (Appraisal v2).

4.15.4 Leaving all other v2 assumptions unchanged while increasing omvs to previous VP3, i.e. £2,950/m2 moves the deficit to a positive RLV of around £4.5m, noting the additional cost assumptions currently causing a slightly lower result than the equivalent Hampton Park II appraisal again. (Appraisal v3).



4.15.5 As with other trials, developer’s profits were then increased. At 17.5% the v3 result reduces to around £3.2m (v4). At 20% that result reduces further – to around £1.9m (v5).

4.15.6 Then looking at reduced build costs, again for trial only (v6) the v3 outcome is increased to about £8.6m, an almost doubling of the RLV indication.

4.15.7 Once again, we see a very large improvement on the v3 RLV indication if increased revenue from the affordable rented homes is assumed; this time to £11.5-12m (v7).

4.15.8 Given the nature of the current stage assumptions, rather than repeat appraisals for the continuation of Longhedge (which would provide a further 300), it can be seen that further value would be produced in proportion to the above. At this stage, we assume that different phases of large schemes would carry broadly consistent and proportionate burdens of infrastructure cost and obligations. However, If assumptions are to be altered from this high level principle then this could be reviewed in greater detail on this and any other affected sites.

4.16 Longhedge Summary

4.16.1 Looking over the assumptions and how those might combine in the short

term, it is not possible to be so positive about the prospects of securing 40% affordable housing here alongside a range of other obligations, unless values levels are higher than our base assumptions and relatively few abnormal site issues / high land value expectations arise.

4.16.2 From our visits to the area, it appeared that parts of this land area may be in a variety of mixed uses – depending of course on the land area ultimately brought forward for development. We raise this point because such areas could well come with higher and varying land value expectations, as well as potentially a range of issues associated with previously developed land – potential remediation requirements etc. Even small pockets of these types of scenarios could have quite a significant impact on overall viability, bearing in mind the relatively low land values indicated to date.

4.16.3 Nevertheless, with 40% as a suitable reference point and target, this site should be capable of providing a significant proportion of affordable housing. Again, specific results from within the range should not be taken to rule out 40% as a suitable target. Ultimately, the relevant combination of conditions and inputs could result in this being deliverable.

4.17 Kings Gate, Stockport, Amesbury (adjoining Archer’s Gate) 4.17.1 At base values £2,250/m2 (VP1) with 40% AH we see a significant deficit – an

RLV (negative) of -£5.5 - 6m approximately. This is before planning



infrastructure obligations, additional surveys and likely other costs (Appraisal v1).

4.17.2 Including those likely other costs as estimated to date, this RLV falls by around £5.5m to increase the negative RLV (deficit) to approximately -£11m, but again with specific outcomes depending on the timing requirements of the obligations. At this point £3,577,079 Community Infrastructure and £2,600,000 transportation costs (£4k/dwelling) have been assumed, along with additional site survey and miscellaneous costs of £101,742 (Appraisal v2).

4.17.3 Leaving all other v2 assumptions unchanged while increasing omvs to previous VP2 (higher rate in this instance), i.e. £2,600/m2 makes a very significant impact on the deficit indicated by v2; reducing the indicative RLV to a deficit (still negative) of about -£1.5m. (Appraisal v3). So by this point these value and cost assumptions are on their way back towards a potentially viable scenario.

4.17.4 However, increasing developer’s profit to 17.5% (v4) and 20% (v5) reduces the v3 RLV indication again (makes it more negative), by an increasing amount as would be expected; to approximately -£3m and -£4.5m in turn.

4.17.5 On the other hand, reducing build costs as in other trail cases to £1150/sq m turns the RLV positive – to approximately £3.7m (v6).

4.17.6 The trial assuming increased affordable rented tenure revenue (to 60% omv again rather than 30%) as applied to v3 assumptions boosts the indicative RLV from that approximate -£1.5m to about £7m (significant positive RLV).

4.17.7 On the current assumptions and approach, the continuation of King Gate as the Core Strategy timeframe moves ahead (a further 650 dwellings) would produce additional value (or deficit, depending on assumptions combinations, as above) at the same or a similar level to this range of scenarios. Therefore a second set of basically duplicate appraisals have not been run or commented upon at this stage.

4.18 Kings Gate Summary

4.18.1 The appraisals for this site show just what degree of impact value levels can

have on viability. Furthermore, as the market property values fall and viability becomes more marginal or falls away, one of the effects noted is that cost increases then have more impact. Schemes driven by lower values are therefore more susceptible to development cost increases than higher value schemes. Based on the stages assumptions applied to date, Kings Gate seems to exhibit these features.



4.18.2 Whilst as shown by the v3 outcome, the higher values could potentially wipe out or largely wipe out a significant deficit (or in any event significantly increase the RLV), the likely realistic value levels here suggest that this site may be unlikely to support as much as 40% affordable housing even though it is a Greenfield site where again the land value expectation should be relatively low. Factors not allowed for to date would exacerbate the effect seen.

4.18.3 On the other hand, these indications also show what positive effects could come from a more economic view on build costs and / or increased revenue to the scheme through changes to the affordable rented housing revenue assumptions (for example if social housing grant were available). It is potentially a case where the HCA’s additionality requirements for grant input could be clearly demonstrated.

4.18.4 Although the tone of these results questions the viability of this site per se, in practice the overall planning obligations package would be reviewed (including affordable housing) to explore options for it and how best to move it to a workable point. Revised views on one or both of these inputs could have a very positive effect, producing a viable scheme with a significant element of affordable housing – bearing in mind that all of these appraisals assume 40% affordable housing to be provided as a key planning requirement.

4.19 General notes on viability, trends and impacts

Existing/alternative use value

4.19.1 Due to highly variable potential existing and alternative use values of sites, it is simply not possible to provide the Council with definitive “cut-off” points where viability will be compromised to the degree that development may not take place. However, it is possible to provide a feel for the general type of comparisons that might be made and thus outcomes that could be seen at varying levels.

4.19.2 In relation to the subject sites, and purely as indicators of likely viability, rather than anything more firm, we might consider the following layers of comparisons to the above results:

• FILTER 1: Positive RLV – in general where we see a negative RLV we

would not expect a site to proceed. That would only happen where the negative impact were outweighed by other positive scheme elements so that the overall scheme were viable; or where there were other drivers for a scheme e.g. public facilities, grant aided development, etc.

(Filter 1 £0/Ha)



• FILTER 2: RLV exceeds agricultural value. At only about £20,000 / Ha

usually, this is a low threshold that must be beaten under any circumstances to ensure the release of Greenfield land for development. In practice, this is usually a falsely low threshold for comparison, because inevitably an element of hope value builds up once sites become potentials for future development, even if that is long term. Also, the sums of money received by such landowners need to be worthwhile; otherwise, why sell.

(Filter 2 £20,000/Ha) This leads on to:

• FILTER 3: RLV meets or exceeds the likely “hope value” level or

minimum level at which an owner would sell, after allowing for all development costs and obligations. The processes often see the land price adjusted downwards to reflect what the developer will have to do proceed with and complete the scheme. Some form of option or contract might govern the agreements between land owners and developers on such matters. There can be no fixed view on what this hope value or minimum land sale price might be – it depends on individual circumstances. However, for the purpose of this filter layer, we will set that figure at £500,000 per hectare (being the assumed minimum point here at which an owner would sell a Greenfield site for housing development, after all land price adjustments). This is a notional figure.

(Possible Filter 3: £500,000/Ha).

• FILTER 4: RLV exceeds existing /potential alternative use value – e.g.

for retained, redeveloped or new commercial use. The most recent information from the Valuation Office Agency (VOA) - Property Market Report July 2009 - indicates that industrial and warehouse land values in the South West vary from £325,000 to £900,000/Ha, with a typical value of £595,000/Ha. It indicates a range of £250,000 to £2,475,000 / Ha for the South East (typical value of £1,256,000/Ha) for warehouse and industrial land. The VOA report indicates a range of £325,000 to £1,400,000/Ha and typical price of £725,000/Ha for Planning Use Class B1 (office/light industrial) land in the South West. For the South East the corresponding range was £250,000 to £2,500,000/Ha and the typical price £1,399,000. There were no VOA figures for Salisbury or for a sufficiently near/similar location to make more specific use of the VOA data, but in our view it is necessary to have an eye both on the South West and South East figures in Salisbury’s case.



(Filter 4, say £1,000,000 / Ha in Salisbury context)

• FILTER 5: RLV matches market price expectations for residential development land (with planning consent). This is arguably less relevant at the current stage, but will be in landowners’ minds as part of their thinking on values. These are pre-planning consent situations, but it is interesting to note the VOA July 2009 figures again:

- Bulk land South West £1,620,000 / Ha - Small sites South West £1,900,000 / Ha - Bulk land South East £2,370,000 / Ha - Small sites South East £2,470,000 / Ha

and the nearest more specific examples given are:

- Bulk land Southampton £1,860,000 / Ha - Bulk land Basingstoke £1,755,000 / Ha - Bulk land Bath £1,800,000 / Ha

(the latter, especially, showing a good level of consistency). (Filter 5, say £1,800,000 in Salisbury context) 4.19.3 Strictly speaking, some of these “filters” may be a little lower in respect of

Amesbury, but are kept the same for the purposes of this exercise.

4.19.4 We would normally expect filter 5 to be beyond the value levels required in these situations.

4.19.5 Appendix II – ‘Summary of approximate RLVs and purely indicative value comparisons’ – illustrates how we have considered the above ‘Filters’ in relation to the indicative RLVs produced by the appraisals. As explained, this is not definitive by any means, but it helped to view and compare the results as part of this assessment. The scheme densities and land areas stated there and elsewhere in this study are purely for this exercise. As noted within the rough workings at Appendix I, those will all need to be clarified as a part of monitoring viability related issues.

4.19.6 It is also very important to note when comparing values with VOA data (or other historical data) that the commercial property market is currently very depressed, has lost confidence and is seeing demand levels reduced more severely even than in the residential market – with very low occupier demand levels affecting values very significantly. It needs to be borne in mind that land value comparisons between residential and other existing/potential alternative (commercial) uses will vary quite significantly over time, particularly in such turbulent economic conditions.



4.19.7 We have noted that comparisons with other information such as provided by the VOA on land values for various uses, is purely indicative. The purpose is to reinforce the relevance of considering the issue of other land use values, and that those might impact on what becomes of a site - or on what a site is able to provide. The values relating to sites (whether for existing or alternative/ potential uses) will be highly specific.

4.19.8 Such comparisons are used within this study only to help highlight how land value varies as assumptions change, and to show very generally the type or range of other information that the indicative RLV results might be compared with when it comes to considering how likely a scheme is to proceed given other valuation factors. The inclusion of this information here seeks to help with illustrating how the value (RLV) created by residential development proposals may look and vary relative to other example uses only. The key point through these indications is to build on the emphasis that considering alternative / competing or existing use values will often be important in viability and thus delivery discussions.

4.19.9 As we have commented about existing and alternative use values (for example commercial), and how those vary greatly with site specifics, much the same will apply if the Council consider the viability of a mixed use scheme in dialogue with a landowner or developer. Our suggested starting point would be to consider the residential element of such a scheme in a similar way to a solely residential scheme, and then consider any positive or negative impact, on overall viability, from the other scheme elements. Inevitably this consideration will be highly site and scheme specific, but there is no reason why the general target approach - the level at which that is pitched, and the overall process - would not follow that which is related to entirely residential sites.

4.20 Potential impact of increased Developer’s Profit 4.20.1 This comparison allows us to investigate the additional impact of increased

profit requirements that may be more likely on schemes as a result, for example, of increased risk in bringing more complex sites forward for development. As expected, the same trends discussed previously are seen, whereby the lower the development values, the greater the additional impact on scheme viability.

4.20.2 In all cases an increased developer’s profit leads to further reductions in the financial sums available for land purchase and, therefore, impacts further on site viability. The impact is also more marked with lower starting values. The additional impact of the higher developer’s profit does not materially affect our recommendations or conclusions from this study. There may be the need for site-specific consideration and awareness of the risk/reward balance needed, leading ultimately to a negotiated approach between the Council and



developers – particularly in lower value situations where viability outcomes will be more sensitive to increasing costs, as already noted.

4.21 Potential impact of Social Housing Grant and Tenure Mix 4.21.1 The sensitivity appraisal version 7 for each site shows how significant the

level of affordable housing revenue is likely to be for scheme viability. It is a major factor along with the level of values for the market housing.

4.21.2 We have indicated that increased revenue could be the effect of social housing grant, and how significant that could be – if available - and perhaps especially for lower value sites or instances where values are relatively low through market conditions.

4.21.3 In our experience, approximately balanced tenure can be achieved with little or no grant, providing the affordable housing proportions sought (and other planning requirements) are not too high. However, as above, we consider that there is likely to be a role for grant to support a bias towards the priority needed affordable rented tenure in particular, especially where the proportion of that tenure rises. As an example of the possible positive impact of grant, with regard to the current mortgage access issues that can be experienced with home ownership products, it may be that through increased grant input more affordable rent could produce more viable schemes which are also more acceptable financially to RSLs in the current conditions. Although there is much uncertainty surrounding grant funding availability, the Council and their development partners will need to consider such factors in relation to site specifics.

4.21.4 A good level of clarity will be needed by all those involved in the development process. Linked to this, it appears that the HCA is going to be looking for increased evidence of grant achieving its “addtionality” requirements i.e. adding to what would be achieved without it.

4.21.5 The use of a framework approach and perhaps of Cascade type mechanisms may well be valuable for consideration within the Council’s overall approach. This envisages the Council working with developing partners – where necessary - to adjust, but still optimise, affordable housing delivery in all the circumstances relevant to a particular site, including the funding levels ultimately available. The framework might mean agreeing common targets for planning obligations, but deferring the agreement of the affordable housing detail (and perhaps other aspects) until the market conditions, grant availability etc relevant to the timing of the delivery of each phase are known. This may be an alternative to agreeing compromised affordable housing and other obligations a long time in advance, to find that those might have been worked differently given changed market and other circumstances.



4.21.6 Usually a Local Authority would expect to lead on this type of process which redefines the affordable housing, working closely with the other parties such as the developer, HCA and any involved RSL.

4.21 Level and timing of Planning Obligations (Infrastructure Costs) 4.22.1 As has been observed, one of the biggest individual cost impacts on

development viability (other than the proportion and type of affordable housing) comes from the level of other (i.e. non affordable housing) planning obligations relating to various infrastructure requirements.

4.22.2 Increased levels of obligations invariably reduce the RLV outcomes and therefore gradually reduce viability. It is the collective impact of such costs rather than any single area which could make all the difference between a scheme being viable and unviable – or at least the collective obligations burdens could contribute significantly to swinging the viability outcome.

4.22.3 £4,000 per new dwelling has been assumed at this stage for contributions to transport and highways requirements. We decided not to carry out appraisals which reviewed the impact of this sum varying. As above, we felt that in itself this sum would be unlikely to tip the balance between a site being viable and not. Since a level of transport and highways obligations is likely to be relevant to all sites, it is likely that in any event there would only be a reduction of this sum as the best outcome for viability; not a total removal of this assumption.

4.22.4 The timing of obligations can have a significant viability impact as well as their level, particularly when they are front loaded in the cashflow so that the costs have to be financed for longer before sales revenue comes in. While running the appraisals we moved the timings of payments to view this effect and found that simply through changing the timing in the cashflow (point at which the expenditure is assumed to be incurred) the outcomes varied and often by £100,000 or more resulting from moving the transport and highways or part of the planning obligations sums around. Unless the sums of money are very large and expected up front, however, then the timing detail is more likely to be part of the collective impact to bear in mind, as opposed to a critical issue by itself.



5 OVERALL SUMMARY and CONCLUSIONS

5.1 Overview of outcomes – context of market and the LDF 5.1.1 These initial appraisals of sites have all assumed a 40% affordable housing

content in accordance with proposed Core Strategy Policies. With this in mind and assuming a suitably active property market and development climate, all sites are or have the potential to be viable in our view.

5.1.2 Depending on further review of these sites once more becomes known about

them and the proposals for them, and on the market conditions and funding availability in the run up to delivery, some compromises may need to be made to the range of planning obligations that can be supported. However, there is nothing unusual in that dynamic.

5.1.3 Broadly the results suggest that providing a practical approach to applying

affordable housing and other obligations, and their timing, is maintained then there should be no need to vary targets with respect to the proposed 40% headline and these site specifics. Delivery negotiations could take place successfully against the backdrop of a 40% affordable housing target.

5.1.4 The market is currently having very unhelpful effects in terms of pursuing

these types of opportunities. However, the timescale of the LDF and strategic nature of this delivery programme is long. We have to assume that a range of conditions my exist over the period, rather than underpin the thinking and dilute affordable housing expectations (for example) based only on what we see now.

5.2 Key viability influences 5.2.1 The viability outcomes are most sensitive to the following individual

assumptions that were explored:

• Market housing values (flowing from market conditions, but also it will be vital to create quality development).

• The level of revenue assumed for the affordable housing, especially when it comprises such a significant part of a scheme. This may well link to the availability of grant.

• Variation in costs – for example build costs. 5.2.2 Collectively, other development cost burdens can also have a very significant

impact. However, the trial appraisals which looked at gradually increasing developer’s profit were not thought to alter results materially owing to this factor alone. It did appear to have more of an impact in lower value instances, but would be unlikely to affect a viability position in principle on its own.



5.2.3 Similarly, we found that variations to individual assumptions areas such as highways and transport, or other planning obligations related to infrastructure, would be unlikely to tip viability between workable and unworkabke on their own. As above, it is the collective impact of the range of these burdens which must be monitored. The type of worksheets included here at Appendix I could be used as part of this process and as more becomes known about the sites and schemes.

5.2.4 There will be significant further influences on viability, and these might be regarded as risk factors, so that a risk register type approach to monitoring them could be maintained. They are general factors that could affect all sites in some way:

• Market conditions, including how those might affect mixed use

schemes. Funding availability for development of this scale. • Linked to this, the importance of certain value levels to support

the range of costs, profit and sufficient land value. • Utility supplies reinforcements etc • Other additional abnormal costs • The mounting of costs related to promotion, planning, surveys,

etc. 5.3 Informal ranking/grouping of sites re their potential viability 5.3.1 The following sets out how we see these sites, based on present assumptions

etc, in terms of likely viability – most to least - and ability to provide target 40% affordable housing alongside other reasonable obligations – likely outcomes as viewed at this stage - e.g:

1) Combination of values & (assumed) relatively unproblematic

greenfield land currently/previously in agricultural use (subject to further investigations and information). E.g. Netherhampton Road

2) Potentially higher value central Salisbury locations where, although

compromises may be needed owing to range of issues affecting sites, with appropriate quality development and realistic land value views, there should be scope to secure a significant proportion of affordable housing alongside other planning led infrastructure contributions. E.g. Central Car Park/Maltings Churchfields

3) Potentially less straightforward predominantly greenfield land, where

obligations burdens and issues / constraints associated with site characteristics, when combined with potentially lower values, may mean that compromises are necessary.



E.g. Fuggelstone Red Hampton Park II Longhedge (formerly known as Beehive) 4) Wilton site - UKLF. Although potentially an attractive location given

appropriate quality of development, on present information this could attract lower values than some sites indicated above whilst potentially having more fundamental issues and risks associated with it compared to sites listed above. This view could change with more known about the site.

5) Stockport Amesbury – whilst understood to be greenfield and land

value expectations should be set accordingly, there appears to be a lot of call on the limited level of value likely to be created given that property values are typically lower here. The current market trends are having an unhelpful effect on that equation. Compromises on the overall obligations packages may well be necessary. Perhaps a framework/development protocol type approach could be considered, with a view to any increased scope for planning obligations package including improved affordable housing delivery being reviewed if the market picks up as the scheme progresses/is phased.

6) Engine Shed, Salisbury – for a quality scheme most likely associated

with the bringing forward of a new sense of place for Churchfields, viability could be workable on a mixed tenure (probably private led) scheme. Carbon Neutral aspirations would most likely only be delivered with significant funding input, over and above normal affordable housing grant levels. For an all affordable scheme, clearly the funding gap would grow. Once more is known about the site (there are a range of issues to be investigated - with levels, access, made ground, potential contamination, rail network, etc) it should be possible to consider the viability of scheme and delivery alternatives in more detail. Taken on as part of the Churchfields comprehensive scheme, it may be possible to view this site in a more positive tone, viability wise.

5.3.2 The above summary and “ranking” of our early stages views on viability

outcomes cannot be regarded as fixed or formal. It is purely indicative and represents our feel for the likely viability of these sites given the information currently available. It may change, and could do so significantly.

5.3.3 Where we have mentioned negotiation, that does not necessarily mean an overall reduction in affordable housing – it could mean negotiations over grant input or changes to the tenure mix to provide an element of cross-subsidy into a scheme. Cascade principles could be used – but where the Council is involved actively in the re-shaping of affordable housing elements of schemes where necessary. Similarly, there may need to be a compromise position



achievable rather than moving straight to an assumption that leaves a site contributing nothing to affordable housing needs, but that allows the affordable housing delivery on particular sites to react to changing viability and funding circumstances as more certainty is created with scheme progression. This may also interact with the consideration of other planning obligation – weighing up of the collective burden on market led schemes and potential prioritising of planning obligations.

5.3.4 Where necessary, we expect that in such site-specific viability discussions, the use of a toolkit (including but not limited to the HCA’s “Economic Appraisal Tool” as we have applied here, or developer’s own workings) will be encouraged. Developers will be encouraged to work closely with their RSL partners, who will increasingly be using that type of appraisal work to support their investment decisions and approaches for social housing grant.



General notes: 1. Property Values ultimately relevant to these potential sites will depend on a

wide range of factors including sense of place / type of housing and living offer, layout and design, specification, mix, extent of other facilities locally etc – as well as housing market conditions at the time. It should be noted that value levels are always one of, if not the key, driver to viability outcomes. Outcomes are very sensitive to them changing. At this stage of the process for these sites we have had to make estimates, and they can only be regarded as indications which will need to be kept under review along with other assumptions. It is not possible to forecast values, particularly while we have such weak and uncertain underlying market conditions.

2. Planning Infrastructure and other costs assumptions as per “mix &

assumptions” sheets (see Appendix I). 3. To date new education provision / contributions (where required) have been

allowed for by way of including the whole calculated financial contribution for both primary and secondary level improvements. They have not, to date, been converted (or part converted) to costs relating to physical provision for education – little is known about specific requirements to date. The Council’s Development Template summaries, as were available at the time of fixing assumptions, were a key source of information for us.

4. Code for Sustainable Homes allowance 4% on build costs £1250/m2 – i.e.

£50/m2 assuming level 3 attainment for all homes. 5. Renewable energy – no current specific allowance, although an additional 2%

build cost increase has been allowed (unassigned). This has been done bearing in mind moves towards wider consideration of Lifetimes Homes, renewable energy, timeline for increased CfSH attainment.

6. Build costs vary quite significantly. This is why we looked at the sensitivity of

RLV outcomes to those varying. In recent times, build costs have been falling, but this has been happening at a time when some of the input costs such as transport, energy and raw materials have been increasing – so the trend may well be unsustainable. Costs are expected to rise again in the short term.

7. The assumptions applied to date to not include any allowances for utility

services upgrades or issues associated with diversions, easements etc – unless we had specific information to take account of (limited instances, mostly related to further surveys or assessments needed, rather than to actual works). We were to take account of any specific cost or other information the Council were able to tell us about. The Council’s information suggests that a number of the sites are likely to be associated with upgrading of water mains supplies, improved off-site links for sewerage, pumping of



sewerage, downstream improvements and the like. Once more is known about these requirements, and any other services related issues, costs assumptions could be entered in to appraisals to see the RLV adjustments which resulted.

8. Similarly, estimated survey and abnormal costs have only been allowed for

within appraisals where sufficient information supports an assumption. 9. Scheme mixes assumed are (current emerging draft Core Strategy) policy

proposals led – in practice mixes will vary. Some sites may require higher or varying density solutions once more is known about available land areas for the variety of uses – ancillary to residential, recreation, community and employment related. On this point, as well as the shape and boundary features, the exiting ground conditions / previous uses of sites can play a significant part in determining the most appropriate future use. Conditions for foundations and different structure types, for private garden and other amenity uses, drainage, etc need to be considered.

10. In this work no account has been taken of the costs related to and / or

valuable attributable to commercial / employment generating / community or other uses that are to form parts of (some of) these development opportunities. Depending on how the schemes are to come forward and be delivered, in due course the viability of those components may need to be considered alongside the residential elements.

11. This strategic overview necessarily takes a preliminary, very early stages look

at the potential viability of these sites. It will be possible to examine the viability of the sites further, in terms of what infrastructure they could support, once more is known about the market and funding conditions they will be delivered in; and about the firmed up requirements and obligations packages to be sough together with the physical characteristics and utility supply requirements, etc.

12. This study requires judgments based on the development values and a range

of other assumptions. The results cannot be a definitive guide to how specific sites will be appraised or how outcomes on a site-specific basis will look. Specific assumptions and values applied may not be appropriate for any particular actual development. We are confident, however, that our assumptions are reasonable in terms of making this high level viability overview and informing policy development.

13. This study is set in the context of setting clear and realistic targets affordable housing targets as a basis for long term policy but bearing in mind flexibility required to deal with the current and likely short term housing market conditions as well as specific viability issues. Development viability will vary from site to site, and there will be no substitute for the negotiated approach to



provision where necessary (e.g. dependant on overall development costs burdens (including planning obligations), occurrence of abnormal costs, low sales values / poor sales rates, etc).

14. There can be no definite viability cut off point owing to individual site characteristics and landowners’ circumstances. It is not appropriate to assume that because a development appears to produce some land value, or even a value that matches that from an existing or alternative use, the land will change hands and the development proceed. This must be viewed alongside the owner’s enjoyment /use of the land, alternatives that produce value and potential incentives as discussed within this report and our previous study work.

15. The study acknowledges that the level of value created by a residential scheme after making allowance for developments costs and profits, including affordable housing and other planning obligations requirements will need to be weighed up against any existing or alternative use relevant to a particular site, or perhaps in the case of some strategic sites, particular elements of those. The exact positioning of any existing or alternative use value will vary from site to site, and from owner to owner, as will the scale of any “overbid” or level of incentive for an owner to sell. It may that a land purchase price some way in excess of an existing or alternative use value has to be reached in certain cases, dependant on the extent and nature of the market for the existing use or alternative proposal.

End of main study text Appendices follow



Appendices Appendix I Indicative dwelling mixes and summary planning

obligations and other cost assumptions – all sites Appendix II Summary of approximate RLVs and purely indicative

value comparisons Appendix III Summary of updated property prices research and

market commentary extracts


Appendix I

Indicative dwelling mixes and summary planning obligations and other cost assumptions – all sites

Wiltshire Council

Site: Hampton Park (Phase II)

Community Area Assumed - Mix Salisbury Indicative only (to be kept under review):

Total Number of Units = 500 Area available for residential (Ha): 12.5

Affordable Housing Proportion (%)= 40%

Affordable Rent Proportion (%) of AH = 74% Overall Density (dph): 40

Intermediate Proportion (%) of AH = 26%

Number of Private Dwellings = 300

Number of Affordable Dwellings = 200

Number of Affordable Rent = 148

Number of Intermediate = 52

Private Dwelling Mix (%)

1bed flat 2 bed flat 2 bed house 3 bed house 4 bed house Total

Insert Percentage Required: 14% 19% 19% 24% 24% 100%

Private Dwelling Mix Numbers

Dwelling Type 1bed flat 2 bed flat 2 bed house 3 bed house 4 bed house Total

No. of Dwellings 42 57 57 72 72 300

No of Persons 55.0 100.3 100.3 180.7 205.9 642.3

Pupil Product Ratio Primary N/A 17.7 17.7 22.3 22.3 80.0

Pupil Product Ratio Secondary N/A 12.5 12.5 15.8 15.8 56.8

Total Affordable Dwelling Mix (%)

1bed flat 2 bed flat 2 bed house 3 bed house Total

Insert Percentage Required: 20% 18% 18% 44% 100%

Affordable Rent Dwelling Numbers

Dwelling Type 1bed flat 2 bed flat 2 bed house 3 bed house Total

No. of Dwellings 36 24 26 62 148

No of Persons 47.2 42.2 45.8 155.6 291

Pupil Product Ratio Primary N/A 5.2 5.6 13.5 24.3

Pupil Product Ratio Secondary N/A 3.7 4.0 9.5 17.2

Intermediate Dwelling Numbers



No of Persons 5.2 17.6 21.1 65.3 109.2




Total No of Persons 107.4 160.2 167.2 401.6 205.9 1042.3

Market sales values (OMVs) - £ per m²: Base assumption £2,600 Equivalent to previous VP2

Higher assumption £2,950 Equivalent to previous VP3

Affordable Housing Revenue indications:

Affordable Rent no grant @ % omv: 30.0 Base: £780 Higher: £885

Intermediate @ % omv: 60.0 Base: £1,560 Higher: £1,770

Following are calculated but not needed on all sites. Only

include costs if marked "Y" below.

Education Contribution (Y/N) Y

Primary Contribution (per Pupil, £) £10,732

Secondary Contribution (per Pupil, £) £15,848

Primary Schools = £1,230,960

Secondary Schools = £1,290,027

Total Contribution (if required) = £2,520,988

Education - Physical Requirement (Y/N) N

If Yes - what is required and estimated cost = Unknown New primary school? (involves land set-aside?)

If Yes - what is required and estimated land take = Unknown

Wiltshire Fire & Rescue Service Contribution (Y/N) Y

Contribution = £223,799

Other Emergency Services Unknown Council development template mentions no specific measures required

Contribution = Unknown

Transport (Y/N) Unknown £2,000,000 notional / estimated allowance made within appraisals.

No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply to all sites equally or only

selected sites.

Appendix I

Green Infrastructure (On/site / Offsite) - Cost if Off-Site On-site only.


Cost = Unknown

Allowance for adjacent river buffer zone £25,000

Country Park (Hampton Park Only) Y/N Y

Cost = Unknown No scheme detail

Ecology (Y/N) Y

Surveys (variable) = £20,000

Bat boxes (calculated) = £5,000

Tree planting (variable) = £20,000

HRA report required £5,000

Archaeology (Y/N) Y

Cost = £20,000

Drainage & Water Issues Y Thought to be high risk of high ground water / running water

Requirements / Costs = Unknown - potentially minimal

Contamination: Unknown Thought low risk?

Engineering survey required

Cost: £10,000

Phosphate Management Plan (Y/N) Y (Wessex Water)


Primary Care Trust (Y/N) Unknown

Contribution = No information provided to date from Wiltshire Council.

Flood Risk (Y/N) N (Unlikely - no current allowance)

Community Facilities & Services (Y/N) Y Education: 1 form entry primary school and secondary contribution

Cost = N/A

Land = N/A

Cemetery N

Other (Y/N) Unknown

Public Art, Libraries, Re-Cycling etc Unknown

Utilities Reinforcements / Contribution

Sewers:

Limited capacity. Likely to require off-site link and significant downstream improvements

Water Supply:

Probable reinforcement of supply needed?

Electricity:

Unknown

Gas:

Possible easement issue re HP gas main to west?

Communications:

Unknown

Education Contributions Source:

Household Numbers Source:

Private Dwelling Mix Source:

Affordable Housing Mix & Tenure Split Source:

Total Dwelling Numbers Source:

Wiltshire Fire & Rescue Service Contributions Source:

Ecology Requirements Source:

Other Assumptions Above - Source:

Site reference numbers (10 - 20 inclusive) - Source: Housing Trajectory Map (former Salisbury District Council)

Comments on surveys, physical issues, risks etc: Highly indicative only at this stage - informed by Wiltshire Council Development Templates, Adams Integra views

Land areas - Source: Wiltshire Council provisional site maps and accompanying indications

Land uses proposed - requirements - Source: Wiltshire Council Development Templates

General Note 1: Unless otherwise stated, where cells blank or state "unknown", no cost allowances have been made at this stage.

General Note 2: Above footnotes quote original sources in early study stages - some may have been updated since - see study text and Council's pre-submission version CS documents

Wiltshire Council Ecologist Strategic Sites Ecological Appraisal (8th May 2009).

Wiltshire Council 1st Draft of Submission Draft Core Strategy Appendix A - Development Templates

Surrey Planning Collaboration Project as an example - Planning Obligations and Infrastructure Provision Code of Practice (compared with averaged per dwelling assumptions of 2.57 per unit regardless of size (sourced

from Census information) - Council E-mail of 27th April 2009

Council E-mail advice 28th April '09 (from: Wiltshire County Council Policy for Requesting S106 Contributions for Education Infrastructure)

Salisbury DC Core Strategy Preferred Options Feb 2008 - Community Areas. Subsequently updated through discussion with Council by reference to submission version Core Strategy.

Core Policy 3 - Housing Mix (1st Draft of Submission Draft Core Strategy Section 7 - Managing Growth - Setting Standards for Delivery) - Provided by the Council on CD (28th April 2009)

Wilts Council - 1st Draft of Submission Draft Core Strategy; as subsequently updated .

Calculations based on Appendix E of Approach to Fund Additional Fire and Rescue Facilities Under S106 (Provided by Wilts Council on CD 28th April 2009). AI have taken Appendix E funding gap divided by the total

anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy version) Development Templates are less specific on this

requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail tbc in due course.

Appendix I

Wiltshire Council

Site: Fugglestone Red Years 1 to 5















No. of Dwellings 42 57 57 72 72 300

No. of Dwellings 42 57 57 72 72 300

No of Persons 55.0 100.3 100.3 180.7 205.9 642.3









No of Persons 47.2 42.2 45.8 155.6 291






No of Persons 5.2 17.6 21.1 65.3 109.2


















Education - Physical Requirement (Y/N) Y

If Yes - what is required and estimated cost = Unknown 2 form entry primary school? Plus land set aside for secondary school?

If Yes - what is required and estimated land take = Unknown Pegasus draft concept master plan indicates 2.1Ha for school incl nursery



Other Emergency Services Unknown Council Devt template mentions no specific measures required




selected sites.

Appendix I


Contribution = unknown

Cost = unknown

Country Park (Hampton Park Only) Y/N N

Ecology (Y/N) Y

Surveys (variable) = £14,000 Estimate / allowance


Tree planting (variable) = £8,000 Re: new woodland to connect site to R Avon?

Other recreational areas & linkages - unknown

Archaeology (Y/N) Y

Cost = £20,000

Drainage & Water Issues ? Thought low risk of abnormal ground and water issues but unknown & tbc

Requirements / Costs = None

Contamination ? Thought low risk


Estimated Cost: £8,000






FRA = £20,000

Community Facilities & Services (Y/N) Y

Cost = ?

Land = ?

Cemetery Y (Nb: Pegasus draft concept master plan indicates space for a cemetery here)

Cost: unknown (land set aside?)

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Unknowns generally - nb high risk re occurrence of easement zones / diversions

Sewers: Survey & pumping station thought to be required, poss. together with extensive off-site improvements

Water Supply: Survey & boosted supply thought to be required

Electricity: Nb: overhead power lines cross site

Gas: Awaiting surveys

Communications: Unknown













General Note: Unless otherwise stated, where cells blank or state "unknown", no cost allowances have been made at this stage.


Surrey Planning Collaboration Project as an example - Planning Obligations and Infrastructure Provision Code of Practice (compared with averaged per dwelling assumptions of 2.57 per unit regardless of

size (sourced from Census information) - Council E-mail of 27th April 2009


Calculations based on Appendix E of Approach to Fund Additional Fire and Rescue Facilities Under S106 (Provided by Wilts Council on CD 28th April 2009). AI have taken Appendix E funding gap divided by

the total anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy version) Development Templates

are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail tbc

in due course.

New local centre, 2 form entry primary school and (?) land plus contribution for secondary school. Plus cemetery?






Appendix I

Wiltshire Council
















No. of Dwellings 46 63 63 79 79 330

No of Persons 60.3 110.9 110.9 198.3 225.9 706.3









No of Persons 52.4 45.8 51.0 170.7 320






No of Persons 5.2 19.4 22.9 72.8 120.3


























No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply to all sites

equally or only selected sites.

Appendix I



Cost = unknown


Ecology (Y/N) Y





Archaeology (Y/N) Y

Cost = £22,000











FRA = £22,000


Cost = ?

Land = ?


Cost: unknown (Land set aside?)

Other (Y/N) Unknown





Electricity: Nb overhead power lines cross site


















Calculations based on Appendix E of Approach to Fund Additional Fire and Rescue Facilities Under S106 (Provided by Wilts Council on CD 28th April 2009). AI have taken Appendix E funding gap divided by the

total anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy version) Development Templates are less

specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail tbc in due

course.




Surrey Planning Collaboration Project as an example - Planning Obligations and Infrastructure Provision Code of Practice (compared with averaged per dwelling assumptions of 2.57 per unit regardless of size

(sourced from Census information) - Council E-mail of 27th April 2009




Appendix I

Wiltshire Council



Total Number of Units = 200 Area available for residential (Ha): 5













No. of Dwellings 17 22 23 29 29 120

No of Persons 22.3 38.7 40.5 72.8 82.9 257.2









No of Persons 18.3 17.6 17.6 62.8 116






No of Persons 2.6 7.0 8.8 25.1 43.6















Primary Schools = £491,719

Secondary Schools = £515,314









Transport (Y/N) Unknown £800,000 notional / estimated allowance made within appraisals.

No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply to all

sites equally or only selected sites.

Appendix I



Cost = Unknown


Ecology (Y/N) Y





Archaeology (Y/N) Y

Cost = £8,000











FRA = £8,000


Cost = ?

Land = ?


Cost: unknown (Land set aside?)

Other (Y/N) Unknown





Electricity: Nb: overhead power lines cross site




















are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail

tbc in due course.









Appendix I

Wiltshire Council

Site: Central Car Park / Maltings, Salisbury

Indicative residential element only















No. of Dwellings 16 23 23 29 29 120

No of Persons 21.0 40.5 40.5 72.8 82.9 257.7









No of Persons 18.3 17.6 17.6 62.8 116






No of Persons 2.6 7.0 8.8 25.1 43.6



















If Yes - what is required and estimated cost = N/A

If Yes - what is required and estimated land take = N/A



Other Emergency Services Unknown


Transport (Y/N) Unknown £0.8m notional / estimated allowance made within appraisals.

No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply

to all sites equally or only selected sites.

Appendix I



Cost = unknown


Air Quality Management Contribution £10,000 Provisional allowance

Noise mitigation £50,000 Provisional allowance

Ecology (Y/N) Y




Archaeology (Y/N) Y

Cost = £20,000

Drainage & Water Issues unknown (Thought to be high risk of running water issues)

Requirements / Costs = unknown

Contamination & related Unknown (Thought to be high risk, and medium risk of below ground obstructions)


Cost: £10,000





Flood Risk (Y/N) Y

FRA = £50,000

Community Facilities & Services (Y/N) Y (Various but beyond scope of considering this element)

Cost = unknown

Land = unknown

Cemetery (Hampton Park Only) N/A here

Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Likely to be issues with easements & reinforcements, including off-site

Sewers: unknown

Water Supply: unknown

Electricity: unknown

Gas: unknown

Communications: unknown

















Surrey Planning Collaboration Project as an example - Planning Obligations and Infrastructure Provision Code of Practice (compared with averaged per dwelling assumptions of 2.57 per unit

regardless of size (sourced from Census information) - Council E-mail of 27th April 2009





Calculations based on Appendix E of Approach to Fund Additional Fire and Rescue Facilities Under S106 (Provided by Wilts Council on CD 28th April 2009). AI have taken Appendix E funding gap

divided by the total anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy version)

Development Templates are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this

service being necessary. Detail tbc in due course.

Appendix I

Wiltshire Council

Site: Churchfields (I), Salisbury - Early years

Community Area Assumed - Mix Salisbury

Indicative only (to be kept under review):














No. of Dwellings 17 23 22 29 29 120

No of Persons 22.3 40.5 38.7 72.8 82.9 257.2









No of Persons 18.3 17.6 17.6 62.8 116






No of Persons 2.6 7.0 8.8 25.1 43.6










Following are calculated but not needed on all sites. Only include

costs if marked "Y" below.







Education - Physical Requirement (Y/N) Y 1 form entry primary school


If Yes - what is required and estimated land take = N/A Unknown






Whole scheme requires 1 form entry primary school - cost unknown. At present for this portion of site assume contributions as above



Appendix I



Cost = unknown




Ecology (Y/N) Y



Tree planting (variable) = £5,000 (Proportion of greater cost)

Archaeology (Y/N) Y

Cost = £20,000

Drainage & Water Issues Y

Requirements / Costs = unknown

Contamination Y (Probable - high risk - former landfill and abattoir noted in vicinity as well as current site uses)

Engineering survey required (Ground obstructions likely too)

Cost: £25,000 Provisional allowance, part of overall site





Business relocation / incentives packages unknown (Might be needed? - circa 200 businesses on total site)

Flood Risk (Y/N) Y Within flood zones FZ1 (mainly) & FZ2

FRA = £50,000

Community Facilities & Services (Y/N) Y 1 form entry primary school plus contributions to secondary

Cost = unknown

Land = unknown


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Note high risk re: easement issues

Sewers: Diversions and reinforcements probable

Water Supply: Reinforcements probable

Electricity: Unknown

Gas: Unknown


Engineering appraisal £10,000 (provisional allowance)

























Development Templates are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for

this service being necessary. Detail tbc in due course.

Appendix I

Wiltshire Council

Site: Churchfields (2), Salisbury (Further 800 dwellings on main area as a continuation of the scheme)

Community Area Assumed - Mix Salisbury















No. of Dwellings 70 90 90 115 115 480

No of Persons 91.7 158.4 158.4 288.7 328.9 1026.1









No of Persons 76.0 66.9 73.9 248.5 465






No of Persons 7.9 28.2 33.4 105.4 174.9










Following are calculated but not needed on all sites. Only include

costs if marked "Y" below.







Education - Physical Requirement (Y/N) Y 1 form entry primary school


If Yes - what is required and estimated land take = N/A Unknown





Transport (Y/N) Unknown £3.2m notional / estimated allowance made within appraisals (pro-rata from £0.8m re first 200 dwellings)

Whole scheme requires 1 form entry primary school - cost unknown. At present for this portion of site assume contributions as above



Appendix I



Cost = Unknown

(Various costs below pro-rated (multiplied up ) from Churchfields

1)




Ecology (Y/N) Y



Tree planting (variable) = £20,000 (Proportion of greater cost)

Archaeology (Y/N) Y

Cost = £80,000

Drainage & Water Issues Y

Requirements / Costs = Unknown

Contamination Y (Probable - high risk - former landfill and abattoir noted in vicinity as well as current site uses)

Engineering survey required (Ground obstructions likely )

Cost: £100,000 Provisional allowance, part of overall site





Business relocation / incentives packages Unknown (Might be needed? - circa 200 businesses on total site)

Flood Risk (Y/N) Y Within flood zones FZ1 (mainly) & FZ2

FRA = £200,000

Community Facilities & Services (Y/N) Y 1 form entry primary school plus contributions to secondary

Cost = unknown

Land = unknown


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Note high risk re: easement issues

Sewers: Diversions and reinforcements probable

Water Supply: Reinforcements probable


Gas: Unknown


Engineering appraisal £40,000 (provisional allowance)























Calculations based on Appendix E of Approach to Fund Additional Fire and Rescue Facilities Under S106 (Provided by Wilts Council on CD 28th April 2009). AI have taken Appendix E funding

gap divided by the total anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy

version) Development Templates are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of

requirements for this service being necessary. Detail tbc in due course.

Appendix I

Wiltshire Council

Site: Churchfields - "Engine Shed" site, Salisbury (To come forward with Churchfields - comprehensive development)















No. of Dwellings 10 10 12 14 14 60

No of Persons 13.1 17.6 21.1 35.1 40.0 127.0









No of Persons 9.2 10.6 8.8 30.1 59






No of Persons 1.3 3.5 3.5 12.6 20.9

















Total Contribution (if required) = £493,296








£0.4m notional / estimated allowance made within appraisals.

Transport (Y/N) Unknown Note apparent major access constraints to be overcome

No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will

apply to all sites equally or only selected sites.

Appendix I

Green Infrastructure (On/site / Offsite) - Cost if Off-Site

Contribution = N/A

Cost =




Ecology (Y/N) Y



Planting / landscaping (variable) = £5,000

Archaeology (Y/N) Y

Cost = £20,000 (Allowance included - likely to encounter range of issues here)

Drainage & Water Issues Unknown


Contamination & related Y


Cost: £10,000


Contribution = £806



Flood Risk (Y/N) N

Community Facilities & Services (Y/N) N

Cost = N/A

Land = N/A

Cemetery (Hampton Park Only) N/A

Cost: N/A

Other (Y/N) Unknown


Carbon Neutral Housing ambition: Add £300/m2 to build cost - provisional allowance.

Utilities Reinforcements / Contribution Unknowns at present

Sewers: SUDS

Water Supply: Possible reinforcement required


Gas: Unknown


















This is a circular calculation without a design layout as open space requirement is driven by scale, mix and density of development.











Appendix I

Wiltshire Council

Site: UKLF HQ, Wilton

Community Area Assumed - Mix Wilton




Affordable Rent Proportion (%) of AH = 82% Overall Density (dph): 37.5



Number of Affordable Dwellings = 180 OK


Number of Intermediate = 32 OK






No. of Dwellings 5 76 76 68 45 270

No of Persons 6.6 133.8 133.8 170.7 128.7 573.5









No of Persons 81.2 63.4 59.8 40.2 245






No of Persons 0.0 17.6 17.6 30.1 65.3



















If Yes - what is required and estimated cost =







No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply to all

sites equally or only selected sites.

Primary school - cost unknown

Appendix I



Cost = Unknown




Demolition Unknown Very significant clearance to do, potential for harmful materials, buried materials and apparatus…etc

Ecology (Y/N) Y




Tree protection / works £20,000 Significant trees on site - provisional allowance

Archaeology (Y/N) Y

Cost = £50,000

Drainage & Water Issues Unknown Potential ground water issues?


Contamination & ground related Y High risk - see above Hydrocarbons, asbestos, munitions, etc?


Cost: £100,000





Flood Risk (Y/N) N

Community Facilities & Services (Y/N) Y Primary school.

Cost = Unknown

Land = Unknown


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Unknown

Sewers: Unknown

Water Supply: Unknown


Gas: Unknown

























are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail tbc

in due course.

Council Devt template also mentions a local centre (but query latter?)

note generally that reinforcements may be needed and railway could restrict gravity flow to south, off site. Potential easement issues


Appendix I

Wiltshire Council

Site: South of Netherhampton Road, Netherhampton / Harnham















No. of Dwellings 32 46 46 58 58 240

No of Persons 41.9 81.0 81.0 145.6 165.9 515.3









No of Persons 38.0 33.4 35.2 125.5 232






No of Persons 3.9 14.1 17.6 52.7 88.3


























New primary school - cost unknown

No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will

Appendix I



Cost = Unknown


Ecology (Y/N) Y




Archaeology (Y/N) Y

Cost = £50,000


Requirements / Costs = Unknown (Likely low risk of ground & water issues generally)

Contamination N (Unlikely)


Cost: £10,000





Flood Risk (Y/N) N

Community Facilities & Services (Y/N) Y Primary school and local centre. Plus secondary school contribution

Cost = Unknown

Land = Unknown


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Issues with existing easements unlikely, though power lines cross part of site

Sewers: Reinforcement probable - limited capacity

Water Supply: ditto


Gas: Unknown




























Appendix I

Wiltshire Council

Site: "Longhedge", Old Sarum, Salisbury, (formerly known as "Beehive" Phase I)















No. of Dwellings 42 57 57 72 72 300

No of Persons 55.0 100.3 100.3 180.7 205.9 642.3









No of Persons 47.2 42.2 45.8 155.6 291






No of Persons 5.2 17.6 21.1 65.3 109.2




















1 form entry

primary school






Transport (Y/N) Unknown £2m notional / estimated allowance made within appraisals.

No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply

to all sites equally or only selected sites.

Appendix I



Cost = Unknown




Ecology (Y/N) Y




Archaeology (Y/N) Y

Cost = £50,000



Contamination Unknown


Cost: £10,000 Nb: possible risks re clearance / ground issues, depending on scheme





Flood Risk (Y/N) Y

FRA = £50,000 (Provisional allowance for assessment)

Community Facilities & Services (Y/N) Y 1 form entry primary school plus contribution for secondary

Cost = N/A

Land = N/A


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution potential easement issues - adjacent uses?

Sewers: Unknown Engineering assessment required for water & sewerage?

Water Supply: Unknown £10,000.00 Provisional allowance?


Gas: Unknown


























Development Templates are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this

service being necessary. Detail tbc in due course.

Appendix I

Wiltshire Council

Site: "Longhedge" continuation, Old Sarum, Salisbury (formerly known as "Beehive")















No. of Dwellings 42 57 57 72 72 300

No of Persons 55.0 100.3 100.3 180.7 205.9 642.3









No of Persons 28.8 24.6 28.2 92.9 174






No of Persons 2.6 10.6 12.3 40.2 65.7

























Transport (Y/N) Unknown £1.2m notional / estimated allowance assumed (pro-rata basis from first 500 dwellings at Longhedge)



1 form entry primary school

Appendix I



Cost = Unknown




Ecology (Y/N) Y




Archaeology (Y/N) Y

Cost = £50,000



Contamination Unknown


Cost: £10,000 Nb: possible risks re clearance / ground issues, depending on scheme





Flood Risk (Y/N) Y

FRA = £50,000 (Provisional allowance for assessment)

Community Facilities & Services (Y/N) Y 1 form entry primary school plus contribution for secondary

Cost = N/A

Land = N/A


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Potential easement issues - adjacent uses?

Sewers: Unknown Engineering assessment required for water & sewerage?

Water Supply: Unknown £10,000.00 Provisional allowance?


Gas: Unknown

















This is a circular calculation without a design layout as open space requirement is driven by scale, mix and density of development.








gap divided by the total anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy version)

Development Templates are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for

this service being necessary. Detail tbc in due course.


Appendix I

Wiltshire Council

Site: "Kings Gate", Stockport, Amesbury (formerly "Archer's Gate") (1 - early years)

Community Area Assumed - Mix Amesbury















No. of Dwellings 54 74 74 94 94 390

No of Persons 70.7 130.2 130.2 235.9 268.8 836.0









No of Persons 60.3 54.6 59.8 203.3 378






No of Persons 6.6 22.9 28.2 85.3 142.9


















Education - Physical Requirement (Y/N) N Assumed not - no information to date









selected sites.

Appendix I


Contribution = N/A

Cost =


Ecology (Y/N) Y




Archaeology (Y/N) Y

Cost = £50,000

Drainage & Water Issues Unknown (Thought to be low risk of ground water issues)


Contamination & related: Y (Thought to be low risk of issues in the ground)


Cost: £10,000





Flood Risk (Y/N) N


Cost = unknown

Land = unknown


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution Unknown

Sewers: Unknown

Water Supply: Unknown


Gas: Unknown


























are less specific on this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail tbc in

due course.

Appendix I

Wiltshire Council

Site: "Kings Gate" continuation, Stockport, Amesbury (formerly "Archer's Gate")

Note: this sheet repeats "Kings Gate (1)" to acknowledge further approx 650 dwellings as continuation of scheme (1300 total).

Community Area Assumed - Mix Amesbury


Total Number of Units = 650 Area available for residential (Ha): 16.3 INPUT













No. of Dwellings 54 74 74 94 94 390

No of Persons 70.7 130.2 130.2 235.9 268.8 836.0









No of Persons 60.3 54.6 59.8 203.3 378






No of Persons 6.6 22.9 28.2 85.3 142.9


















Education - Physical Requirement (Y/N)

N Assumed not - no information to date


N/A

If Yes - what is required and estimated land take =

N/A

Wiltshire Fire & Rescue Service Contribution (Y/N)

Y





No details yet provided by Wiltshire Council. Transport model / assessment awaited. Will be treated as added cost / risk discussion. Unknown whether costs will apply to all sites equally or

only selected sites.

Appendix I

Green Infrastructure (On/site / Offsite) - Cost if Off-Site

On-site only.

Contribution = N/A

Cost =


Ecology (Y/N) Y




Archaeology (Y/N) Y

Cost = £50,000

Drainage & Water Issues Unknown (Thought to be low risk of ground water issues)


Contamination & related: Y (Thought to be low risk of issues in the ground)


Cost: £10,000





Flood Risk (Y/N)

N


Cost = unknown

Land = unknown


Cost: N/A

Other (Y/N) Unknown


Utilities Reinforcements / Contribution

Unknown

Sewers:

Unknown

Water Supply:

Unknown

Electricity:

Unknown

Gas:

Unknown

Communications:

Unknown

















Surrey Planning Collaboration Project as an example - Planning Obligations and Infrastructure Provision Code of Practice (compared with averaged per dwelling assumptions of 2.57 per unit regardless of size

(sourced from Census information) - Council E-mail of 27th April 2009





Calculations based on Appendix E of Approach to Fund Additional Fire and Rescue Facilities Under S106 (Provided by Wilts Council on CD 28th April 2009). AI have taken Appendix E funding gap divided by the total

anticipated dwelling numbers shown in the 1st Draft of Submission Draft Core Strategy. Since fixing these assumptions the latest (pre submission Core Strategy version) Development Templates are less specific on

this requirement - site by site approach is suggested. AI decided to leave in its previously assessed allowances in recognition of requirements for this service being necessary. Detail tbc in due course.

Appendix I

Appendix II

Summary of approximate RLVs and purely indicative value comparisons

Site & Appraisal Version

Number of

Units

Approx RLV £ Approx RLV £ / Ha Outcome

Density Developable area (Ha) RLV > £0 RLV >= £20,000 RLV >= £500,000 RLV >= £1m RLV >= £1.8m

40 dph 12.5 Filter 1 Filter 2 Filter 3 Filter 4 Filter 5

Appraisal v1 £2,000,000 £160,000 Y Y N N

Appraisal v2 -£2,500,000 -£200,000 N N N N

Appraisal v3 £4,500,000 £360,000 Y Y N N

Appraisal v4 £3,400,000 £270,000 Y Y N N

Appraisal v5 £2,100,000 £170,000 Y Y N N

Appraisal v6 £8,500,000 £680,000 Y Y Y N

Appraisal v7 £12,000,000 £960,000 Y Y Y N

Density Developable area (Ha) RLV > £0 RLV > £20,000 RLV > £500,000 RLV > £1m RLV > £1.8m


Appraisal v1 £5,200,000 £170,000 Y Y N N

Appraisal v2 -£5,000,000 -£160,000 N N N N

Appraisal v3 £12,700,000 £410,000 Y Y N N

Appraisal v4 £9,500,000 £300,000 Y Y N N

Appraisal v5 £6,400,000 £200,000 Y Y N N

Appraisal v6 £22,700,000 £730,000 Y Y Y N

Appraisal v7 £30,200,000 £970,000 Y Y Y N



Appraisal v1 £3,500,000 £1,220,000 Y Y N

Appraisal v2 £1,650,000 £580,000 Y N N

Appraisal v3 £4,600,000 £1,610,000 Y Y N

Appraisal v4 £4,000,000 £1,400,000 Y Y N

Appraisal v5 £3,400,000 £1,190,000 Y Y N

Appraisal v6 £3,000,000 £1,050,000 Y Y N

Appraisal v7 £8,000,000 £2,800,000 Y Y



Appraisal v1 £3,500,000 £1,050,000 Y Y N

Appraisal v2 £1,650,000 £500,000 Y Y N

Appraisal v3 £4,600,000 £1,380,000 Y Y N

Appraisal v4 £4,000,000 £1,200,000 Y Y N

Appraisal v5 £3,400,000 £1,020,000 Y Y N

Appraisal v6 £3,000,000 £900,000 Y Y N

Appraisal v7 £8,000,000 £2,400,000 Y Y Y



Appraisal v1* £1,200,000 £720,000 Y N N

Appraisal v2* £300,000 £180,000 N N N

Appraisal v3* -£2,100,000 -£1,270,000 N N N

Appraisal v4* -£600,000 -£360,000 N N N

Appraisal v5* -£4,600,000 -£2,770,000 N N N

Appraisal v6* n/a n/a n/a n/a n/a

Appraisal v7* n/a n/a n/a n/a n/a


37.5 dph 12.0 Filter 1 Filter 2 Filter 3 Filter 4 Filter 5

Appraisal v1 £2,100,000 £180,000 N N N

Appraisal v2 £1,800,000 £150,000 N N N

Appraisal v3 £4,000,000 £330,000 N N N

Appraisal v4 £3,100,000 £260,000 N N N

Appraisal v5 £2,000,000 £170,000 N N N

Appraisal v6 £7,500,000 £630,000 Y N N

Appraisal v7 £10,000,000 £830,000 Y N N



Appraisal v1 £7,500,000 £750,000 Y Y Y N

Appraisal v2 £4,000,000 £400,000 Y Y Y N

Appraisal v3 £10,000,000 £1,000,000 Y Y Y N

Appraisal v4 £9,000,000 £900,000 Y Y Y N

Appraisal v5 £7,800,000 £780,000 Y Y Y N

Appraisal v6 £13,000,000 £1,300,000 Y Y Y N

Appraisal v7 £16,410,000 £1,640,000 Y Y Y N



Appraisal v1 £2,000,000 £160,000 Y Y N N N

Appraisal v2 -£2,600,000 -£210,000 N N N N N




Appraisal v6 £8,600,000 £690,000 Y Y Y N N

Appraisal v7 £11,500,000 £920,000 Y Y Y Y N



Appraisal v1 -£5,500,000 -£340,000 N N N N

Appraisal v2 -£11,000,000 -£680,000 N N N N

Appraisal v3 -£1,500,000 -£90,000 N N N N

Appraisal v4 -£3,000,000 -£180,000 N N N N

Appraisal v5 -£4,500,000 -£280,000 N N N N

Appraisal v6 £3,700,000 £230,000 Y Y N N

Appraisal v7 £7,000,000 £430,000 Y Y Y N

Key:

Y = RLV above filter level

N = RLV below filter level

N/A = Filter level not applicable

to those sites (e.g. previously

developed sites where

greenfield benchmarks are not

applicable)

NOTES:

1. All appraisals assume 40% affordable housing in accordance with various Community Area mix policies - meeting housing needs (See Appendix 1)

2. Reminder of appraisal versions (except Engine Shed element of Churchfields - see note 3):

Appraisal 1 Base property values applicable to each scenario, without planning obligations on infrastructure

Appraisal 2 As v1 but with infrastructure allowances made

Appraisal 3 As v2 but assuming higher level property values dependent on location

Appraisal 4 As v3 but trialled with developer profit increased (from 15% GDV private sales) to 17.5%

Appraisal 5 As v3 but trialled with developer profit increased (from 15% GDV private sales) to 20%

Appraisal 6 As v3 but trialled with varied build costs (reduced by £100m / sq m in most cases; increased by £110 / sq m @ Central Car Park and Churchfields.)

Appraisal 7 As v3 but trialled with affordable rented homes revenue boosted from 30% to 60% omv; potentially representing grant.

3. Engine Shed Appraisals Appraisal 1

Without infrastructure

Appraisal 2

With infrastructure

Appraisal 3

With added cost

Appraisal 4

With higher market values

Appraisal 5

All affordable housing

Appraisal 6

No appraisal

Appraisal 7

No appraisal

4. Red numerical entries above are negative RLVs (financial deficits - meaning no money available for land, scheme will not work unless gap funding available / assumption adjustments made)

5. Any variations to the filter levels would alter the indicative Y & N entries and "traffic light" style shading.

6. Densities and site areas stated here and elsewhere within this study are highly indicative and selected for this part of the exercise only.

7. All assumptions and therefore outcomes subject to potentially significant variation, either way.

8. Main study report text refers to these indicative "filters" at paragraph 3.5.1.2

N/A

Strongest outcomes bearing in mind

greenfield and assumed relatively

uncomplicated

Similar tone of outcomes as for

Hampton Park & Fugglestone Red

Longhedge (sample)

Kings Gate (sample)

Indicated viability concerns esp. at

40% AH. Issues, based on

assumptions, are from costs levels

alongside anticipated lower values

N/A650

400

500

100

UKLF Wilton

Netherhampton Road

450

Churchfields - Engine Shed

(Appraisals Varied)

N/A

Churchfields (sample part for

this exercise)

200

Fugglestone Red

Hampton Park

Central Car Park

200

1250

500

N/A

Even the more favourable

assumptions suggest values & costs

may be an issue re achieving 40% AH

N/A

As per Hampton Park

Likely strength of values could

overcome costs burden to deliver 40%

AH or close

N/A

INDICATIVE FILTER (£ RLV / Ha) Potentially Viable (Y / N)

N/A

As per Central Car Park

Indicates scheme not viable as

appraised - in its own right as an

affordable carbon neutral devt

Likely to need more favourable

assumptions if to deliver 40% AH

N/A

Appendix II - Summary of Approximate Residual Land Values and Indicative Value Comparisons

Appendix II

Appendix III

Summary of updated property prices research and market commentary extracts

1

Appendix III

Summary of updated property prices research and Market Commentary

Extracts

Resale Property market in former Salisbury District – April 2009

(Updated desktop research – same basis as previous study completed January 2009

– greyed out text represents areas not relevant to this strategic sites study).

Average Asking Prices Analysis

Rank Settlement

1 Bed

Flats

2 Bed

Flats

2 Bed

House

3 Bed

House

4 Bed

House

All

Properties

1 Churchfields - £325,000 - £256,100 £375,000 £287,400

2 Harnham £137,238 £164,950 £212,500 £278,589 £415,692 £285,045

3 Salisbury Central £145,370 £337,843 £174,031 £276,813 £324,903 £272,835

4

Downton £135,000 - £200,490 £297,750 £316,250

£260,860

5 Tisbury - - £186,429 £251,123 £263,133 £231,274

6 Fugglestone St Peters - - £159,950 - £280,000 £219,975

7

Old Sarum & Hampton

Park - - £160,000 £211,949 - £211,430

8 Wilton £113,333 £146,500 £163,808 £260,990 £306,667 £209,265

9 Amesbury £92,633 £139,957 £155,544 £191,921 £298,725 £194,140

10 Durrington £108,225 - £147,113 £187,153 £372,500 £183,570

- Overall £125,271 £217,479 £169,957 £226,366 £327,742 £226,900

Average Asking Price Analysis

1 Bed Flat - £125,271

2 Bed Flat - £217,479

Terraced £164,303

Semi-

Detached £171,039

2 Bed

House

Detached £220,000

Terraced £214,763

Semi-

Detached

£216,963

3 Bed

House

Detached £286,502

Terraced £272,410

Semi-

Detached £326,990

4 Bed

House

Detached £370,450

The tables below show the marketing (or, where available, subject to contract sale)

price of various types of property within Salisbury. They contain the source data for

the above indicative pricing hierarchy and dwelling types summary. The information

was collected from www.rightmove.co.uk. It is likely that actual sales values were

lower than the figures set out below, however, this exercise served to add to our

understanding of local value levels and patterns.

www.rightmove.co.uk

2

For each location reviewed (aligned as far as possible to strategic site localities)

there are two tables below. The first table shows the average price of each dwelling

type. The second table shows the information in terms of average, minimum, 1

st

quartile, median (2

nd

quartile), 3

rd

quartile and maximum price. This is so that the

range of values, as well as typical value levels, can be better understood.

Since the list of sites for review has changed since the original Council instructions

for our review, some of the areas are not now relevant. Futhermore, all areas

considered for research in the previous study are not relevant to the strategic sites

review. Those (Tisbury and Downton) have been removed from the detail below but

retained within the above averaging so that those average figures remain true to the

data that was assembled to calculate them. As those now irrelevant (for this study)

areas see typical/mid-range values, there inclusion still is not thought to unduly skew

the feel for the tone of former Salisbury District house prices on this basis.

Old Sarum and Hampton Park

1 Bed 2 Bed 3 Bed 4 Bed

Detached

- - -

Semi-Detached

- £174,986 -

Terraced

£160,000 £213,506 -

Flats

- -

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat - - - - - -

2-Bed Flats - - - - - -

2-Bed Houses £160,000 £160,000 £160,000 £160,000 £160,000 £160,000

3-Bed Houses £211,949 £139,000 £200,000 £215,000 £224,995 £239,995

4-Bed Houses - - - - - -

April 2009, www.rightmove.co.uk

Durrington


Detached

- £223,125 £495,000

Semi-Detached

£99,500 £178,558 £250,000

Terraced

£153,914 £175,612 -

Flats

£108,225 -

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat £108,225 £107,500 £107,863 £108,225 £108,588 £108,950

2-Bed Flats - - - - - -

2-Bed Houses £147,113 £99,500 £138,463 £147,750 £153,500 £189,950

3-Bed Houses £187,153 £148,500 £169,950 £182,475 £193,738 £285,000

4-Bed Houses £372,500 £250,000 £311,250 £372,500 £433,750 £495,000


www.rightmove.co.uk

www.rightmove.co.uk

3

Fugglestone St Peters


Detached

- - £280,000

Semi-Detached

£159,950 - -

Terraced

- - -

Flats

- -

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat - - - - - -

2-Bed Flats - - - - - -

2-Bed Houses £159,950 £159,950 £159,950 £159,950 £159,950 £159,950

3-Bed Houses - - - - - -

4-Bed Houses £280,000 £280,000 £280,000 £280,000 £280,000 £280,000


Churchfields


Detached

- - £375,000

Semi-Detached

- £229,500 -

Terraced

- £264,967 -

Flats

- £325,000

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat - - - - - -

2-Bed Flats £325,000 £325,000 £325,000 £325,000 £325,000 £325,000

2-Bed Houses - - - - - -

3-Bed Houses £256,100 £214,950 £225,863 £229,725 £259,963 £350,000

4-Bed Houses £375,000 £375,000 £375,000 £375,000 £375,000 £375,000


Wilton


Detached

- £295,000 £316,667

Semi-Detached

- £194,975 -

Terraced

£163,808 £266,989 £296,667

Flats

£113,333 £146,500

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat £113,333 £95,000 £102,500 £110,000 £122,500 £135,000

2-Bed Flats £146,500 £97,500 £125,000 £130,000 £160,000 £220,000

2-Bed Houses £163,808 £125,000 £145,998 £165,000 £176,225 £220,000

3-Bed Houses £260,990 £174,995 £191,250 £204,975 £323,750 £495,000

4-Bed Houses £306,667 £210,000 £250,000 £282,500 £352,500 £450,000


www.rightmove.co.uk

www.rightmove.co.uk

www.rightmove.co.uk

4

Harnham


Detached

- £291,057 £429,974

Semi-Detached

£212,500 £234,950 £330,000

Terraced

- - -

Flats

£137,238 £164,950

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat £137,238 £65,000 £75,463 £129,475 £191,250 £225,000

2-Bed Flats £164,950 £164,950 £164,950 £164,950 £164,950 £164,950

2-Bed Houses £212,500 £175,000 £193,750 £212,500 £231,250 £250,000

3-Bed Houses £278,589 £227,500 £239,950 £279,950 £300,000 £345,000

4-Bed Houses £415,692 £310,000 £324,975 £399,995 £489,975 £569,950


Amesbury


Detached

#DIV/0! £219,963 £346,233

Semi-Detached

£150,733 £187,868 £249,950

Terraced

£169,975 £184,411 £219,967

Flats

£92,633 £139,957

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat £92,633 £89,950 £91,450 £92,950 £93,975 £95,000

2-Bed Flats £139,957 £129,950 £139,950 £139,950 £139,950 £150,000

2-Bed Houses £155,544 £130,000 £143,713 £148,475 £159,375 £209,950

3-Bed Houses £191,921 £130,000 £167,450 £189,950 £213,750 £250,000

4-Bed Houses £298,725 £139,950 £249,950 £279,975 £365,000 £450,000


Salisbury Central


Detached

- £370,875 £396,238

Semi-Detached

£183,300 £268,737 £402,500

Terraced

£168,470 £245,650 £284,855

Flats

£145,370 £337,843

Overall

Average Minimum

1st

Quartile Median

3rd

Quartile Maximum

1-Bed Flat £145,370 £119,950 £129,950 £130,000 £169,950 £177,000

2-Bed Flats £337,843 £114,950 £307,475 £320,000 £410,000 £495,000

2-Bed Houses £174,031 £154,950 £168,700 £172,475 £179,363 £195,000

3-Bed Houses £276,813 £165,000 £199,950 £270,000 £338,750 £595,000

4-Bed Houses £324,903 £220,000 £259,500 £280,000 £375,000 £575,000


www.rightmove.co.uk

www.rightmove.co.uk

www.rightmove.co.uk

5

Updated review of available new build property in former Salisbury

District – April 2009

Same basis as Adams Integra’s previous viability overview study completed January

2009 – to aid judgments on value levels for use within appraisals.

Address Description Price

Size

(m2)

Price

per m2

Developer/

Agent

Incentives

Salisbury Central

Flats

St. Ann Street,

Salisbury, SP1

2 bed duplex £245,000

Woolley &

Wallis

1 bed flat £124,950 36.6 £3,414

32 Middleton

Road, Salisbury

1 bed flat £114,950 31.6 £3,638

Clifford &

Drew

Houses

Exeter Street,

Salisbury, SP1

2 bed house £279,500

Woolley &

Wallis

4 bed house

From

£249,950

McKillop &

Gregory

Pilgrims Way,

Laverstock,

Salisbury

2/3 bed houses

Prices

From

£59,500

(35%

Share)

A2Dominion

Shared

Ownership

Scheme

Downton

Houses

4 and 5 bed

homes

Awaiting

release

Redrow

Homes

2 bed terrace £185,000 55.0 £2,288

2 bed terrace £195,000 66.7 £2,923

Wick Lane,

Downton,

Salisbury,

Wiltshire. SP5

3NF

2 bed terrace £235,000 80.8 £2,907

Old Sarum

Flats

2 bed

apartment

From

£149,

995

The Portway,

Salisbury, SP1

2 bed

apartment

From

£151,995

Persimmon

Homes

HomeBuy

Direct Scheme

available

Houses

2 bed detached £199,995 68.2 £2,935

4 bed semi

detached From

£249,995 81.4 £3,070

3 bed terrace

(From)

£269,995

Persimmon

Homes

HomeBuy

Direct Scheme

Available

3 bed end

terrace

£269,995 Connells

4 bed detached

(From)

£289,995

Persimmon

Homes

HomeBuy

Direct Scheme

Available

The Portway,

Salisbury, SP1

4 bed detached £309,995

Connells

6

4 bed semi

detached

£299,995


4 bed semi

detached

£314,995

Fugglestone

Houses

Sovereign Close,

Quidhampton

4 bed end

terrace

£250,000 104.0 £2,404

Myddelton

& Major

Wilton

Flats

2 bed

apartment

£240,000

2 bed

apartment

£245,000

2 bed

apartment

£250,000

2 bed

apartment

£270,000

Connells

2 bed duplex

apartment

£295,000

McKillop &

Gregory

2 bed duplex

apartment

£305,000

Florence Court,

West Street,

Wilton, Salisbury

(retirement

apartments)

2 bed

penthouse

apartment

£335,000

Archstone

Lifestyle

Homes

Houses

2 bed terrace

(From)

£149,950

2 bed terrace £159,950

Wishford Reach,

Wliton, Salisbury

2 bed terrace £167,500 62.9 £2,663

McKillop &

Gregory


McKillop &

Gregory

3 bed end

terrace

309, 950 Connells

3 bed cottage

(From)

£315,000

McKillop &

Gregory

3 bed terrace £324,950 Connells

3 bed cottage

(From)

£315,000

McKillop &

Gregory


3 bed end

terrace

£329,950

Connells

2 bed cottage

(From)

£345,000 85.0 £4,059

McKillop &

Gregory

3 bed cottage £390,000

2 bed cottage £365,000

Florence Court,

West Street,

Wilton (retirement

properties)

3 bed mews

cottage

POA

Archstone

Lifestyle

Homes

51 Victoria Road,

Wilton, SP2 0DZ

4 bed detached

(Offers in

excess of )

£300,000

Giles Vye &

Sons

Amesbury

Houses

Beyer Road,

Amesbury, SP4

2 bed house

From

£169,950

Persimmon

Homes

Helping Hand

Plus. Own

7

3 bed house

From

£189,950

3 bed house

From

£194,950

3 bed house

From

£199,950

3 bed house

From

£204,950

100% - no

deposit

required. Pay

85% of the

price, repay

15% when you

sell within 10

years


Austin &

Wyatt


3 bed town

house

£239,950

Connells

3 bed detached

From

£249,950

Bloor

Homes

Cash discounts

availablle

4 bed end

terrace

£249,950 Connells

4 bed detached

From

£264,950

Persimmon

Homes

Helping Hand

Plus. Own

100% - no

deposit

required. Pay

85% of the

price, repay

15% when you

sell within 10

years



Connells

4 bed detached

From

£289,950 146.3 £1,983

Bloor

Homes

Cash discounts

available




Connells

4 bed detached

From

£309,950

3 bed house

From

£239,950

3 bed house

From

£219,950

Persimmon

Homes

Helping Hand

Plus. Own

100% - no

deposit

required. Pay

85% of the

price, repay

15% when you

sell within 10

years

4 bed detached

(From)

£330,000 141.8 £2,328

4 bed detached

(From)

£335,000 150.2 £2,231

5 bed detached

(From)

£375,000 202.0 £1,856

Bloor

Homes

Cash discounts

available

8

Housing Market Reporting

In this section the italic text is attributed to a range of sources – as stated in each

case. Accompanying notes or comments by Adams Integra are not in italics.

Emphasis using Bold text is by Adams Integra.

Further updates have been added, in outline, as the study progressed, so that a feel

can be gained for market conditions – and how those evolved – over the period.

Royal Institution of Chartered Surveyors (RICS) – 9 June 2009

The Royal Institution of Chartered Surveyors (RICS) published a Housing Market

Survey for May 2009; its monthly update. The headline they ran with read ‘Increased

buyer interest and lower new instructions provide support for house prices’.

The survey reported the least negative picture since November 2007 in terms of the

balance of surveyors reporting falling rather than rising house prices. It said: ‘The

May survey provides more evidence that activity in the housing market is

beginning to pick up, albeit from historic lows. New buyer enquiries have now

increased for seven months in a row…..The survey also contains more definitive

signs that the rebound in enquiries is now feeding through in to increased

transactions….There was a further rise in the average number of sales per

surveyor.’

It went on to state: ‘Significantly, new instructions to sell property fell further in

May. This series (of data) has now dropped in every single month over the last two

years and, if anything, the picture appears to be becoming more acute. …….. As a

result the number of unsold properties on surveyors’ books continues to

decline….’

And: ‘Meanwhile, the (data) series measuring confidence in both the sales and

price outlook improved further over the month.

Looking at the data from a regional perspective, the net price balance improved in

most parts of the Country. London remained the strongest region, followed by

Scotland, the South East and South West. The only region in England and Wales to

show a deterioration in the net price balance was the West Midlands. Significantly the

increase in new buyer enquiries in May was most marked in London and the South

East.

RICS news release 15 June 2009:

The RICS announced: “Gap between asking and selling prices appears to be

narrowing.”

9

This release stated:

- Majority of surveyors (almost 60%) now reporting that the gap between

asking and selling price is narrowing. In contrast last August results of the

same survey revealed that the gap was widening.

- Across the UK, houses are selling at an average of 11% below the asking

price.

- Vendors in London now achieving sales at around 93% of asking price (i.e. at

7% below asking price), with 55% of surveyors reporting that the gap had

narrowed over the previous three months.

It went on to include comments by an RICS senior economist:

“The improvement in sentiment that has been captured in recent Housing Market

Surveys is reflected in a narrowing in the gap between asking and selling prices. This

is particularly interesting given that recent reports from Rightmove suggest that

asking prices have been relatively stable since February. As new instructions

continue to decline, a lack of supply is providing some support to house prices

and that has helped to close the gap. Even so, some caution is still warranted.

While the pace of the downturn may be easing, the housing market will still be

challenged by an uncertain economic backdrop, the threat of rising

unemployment and continued restrictions on mortgage finance.”

Land Registry – House Price Index May 2009 (released 26 June 2009)

This stated:

‘The Land Registry data for May data shows that while monthly house price change

remains negative, the rate of decline is easing. England and Wales reported an

annual (house price) movement of -15.9%. The average property in England and

Wales is now worth £152,497 and the monthly change is now -0.2%. Property

transactions averaged 31,091 sales per month in the months December 2008 to

March 2009. In the same period a year earlier, the average was higher

(approximately double) at 64,674 sales per month’ (Adams Integra recalls that in

early 2007, sales were running at in excess of 100,000 per month).

Housing Market Overview – Updated August 2009

Interest rates:

The Bank of England Base Rate remains at a historically low 0.5%. Despite this,

finance for property (mortgages for purchase and development finance) remains very

constrained and is not generally available on favourable terms relative to this interest

rates backdrop.

10

Mortgage approvals:

As at 14 September 2009, the Council of Mortgage Lender’s mortgage ‘Lending for

house purchase and remortgage’ web-site page stated as a headline:

‘July house purchase lending up on a year ago for first time in two years.’

Although remortgaging remained unsurprisingly weak, lending for house purchase

showed its first material annual growth in July for the first time since early 2007,

according to the latest Council of Mortgage Lenders' survey.

At £14.5 billion, total gross lending rose significantly for the second month running,

but was still 42% lower than in July last year. Within this, house purchase lending

accounted for 56,000 loans totalling £7.5 billion - up from 47,000 loans totalling £7.1

billion in July last year.

Loans for house purchase and remortgage

Number of

house purchase

loans

Value of house

purchase loans

£m

Number of

remortgage

loans

Value of

remortgage

loans £m

July 2009

56,000 7,500 41,000 4,700

Change from June 2009 +24% +27% +21% +12%

Change from July 2008 +19% +6% -53% -61%

The rise in house purchase lending in July was concentrated more heavily towards

home movers than in June, when the largest rise was seen in first-time buyer activity.

There were 20,400 first-time buyer loans and 35,700 home mover loans in July, up

18% and 28% respectively on June. But compared with a year earlier, the rise in first-

time buyer numbers was higher, up 22% compared with a 17% rise in the number of

movers.

Source: Council of Mortgage lenders website – statistics update 14 September 2009: www.cml.org.uk

General overview (RICS based):

At the beginning of 2009, the RICS had expected house prices to fall back a further

10-15% during the year. That would have left prices at around 25-30% less (typically)

than their Autumn 2007 peak. This position has now been revised so that prices are

likely to be slightly higher in Q4 of 2009 than they were in Q4 of 2008.

Reference to Land Registry information suggests that prices have risen recently in

some areas (marginally), whilst they appear to have continued falling in others.

Overall, it might be said that something of a levelling out had started to be seen since

the early Spring of 2009.

www.cml.org.uk

11

In Adams Integra’s experience, this has been borne out through mixed messages

(broadly more positive overall) picked up from Estate Agents, some housebuilders

(who have begun to pick up a level of activity) and others - since around March 2009.

Lack of supply (quantity of homes on the market), coupled with a lower interest rate

climate (subject to mortgage availability – see below) and a feeling that better value

can be had, are thought to have contributed to the supporting of prices in recent

months. A significant change in sentiment has been felt.

However, there remain fundamental weaknesses in the market which are not going

to be resolved short-term. While prices could continue to edge up, it is thought more

likely, still (in some camps) that prices may fall further in 2010 – over the next 18

months. The downturn is of an unprecedented nature. This uncertain overview (little

chance of quick return to boom times) is due to credit conditions remaining tight,

transactions levels running at a historic low of around a third of the long run average

(even though mortgage approvals have edged up) – underpinned by wider economic

uncertainty with employment levels looking set to deteriorate further.

The implications for housebuilding have been severe. Completions for 2009 look set

to make around 75,000 – around half of even the 2008 level, and less than a third of

the 240,000 or so that Government figures have indicated are needed annually.

In essence the outlook remains clouded, a fairly flat, uncertain, inactive market looks

more likely to continue through 2009 and 2010 than a quick return to a more buoyant

position. Such forecasting is far from certain and can change quickly.

Principal Information Source: RICS Housing Market Forecast, August 2009

Further outline updates

Land Registry - House Price Index July 2009 (released 28 August 2009)

England & Wales – Monthly change 1.7%; annual change -11.7%; average price

£155,885.

‘Strong month on month performance has resulted in a reduced annual rate of price

fall.’

‘Sales volumes averaged 35,848 per month from February to May 2009. In

comparison to this, during the same months a year earlier (2008), the figure stood at

61,743.’ Adams Integra noted that the equivalent figure from early 2007, prior to the

market peak, had stood at just over 100,000.

12

RICS (news release 15 September 2009)

Source via: www.moneyextra.com/news

House prices have turned positive for the first time in two years.

According to the Royal Institution of Chartered Surveyors RICS, the net balance of

surveyors reporting rises rather than falls in house prices reached a positive reading

of 10.7 per cent in August, from a negative of 5.7 per cent in July.

The national average appeared to have been boosted by data from the south of

England, with the net balance of surveyors reporting price rises in London up by 43

per cent.

RICS spokesperson Jeremy Leaf said it was clear that house prices are now rising,

but it continues to be the lack of supply that is "underpinning the recovery in

most parts of the country".

He added: "The more positive news flow will gradually encourage vendors to start

putting property back on the market.”

"This development should enable more potential purchasers to find desirable

properties to buy but it could also present a challenge to the firmer trend in prices

particularly when interest rates finally begin to move upwards."

Last week, the Halifax house price index reported that house prices rose by 0.8 per

cent in August 2009.(Note that Adams Integra does not rely on Bank and Building

Society Indices as those tend to be influenced by their business base – can be

skewed towards certain property types or geographies.

There is a range of other reporting available, giving mixed views and forecasts. It

is important to consider a range of views and sources while thinking about the

market. Some commentators believe that after a stabilising period, prices may fall

again in 2010. An example is Jones Lang Lasalle, through their September 2009

‘on.point’ publication. That residential market forecast includes the following headline

statements:

‘The unforeseen and seemingly irrational pick-up in prices has altered the outlook for

UK house prices.’

‘Average house price growth will be close to 0% during 2009’ (the current increases

looking like they may steadily cancel out the previous losses).

‘In 2010 the housing market will weaken and prices will fall again.’

‘A sustained housing market recovery is deferred until 2012.’

www.moneyextra.com/news

13

‘UK house price growth is forecast to rise by 8%+ by 2014.’

‘Regional housing markets will behave typically with London and southern regions

recovering first and fastest’.

The firm’s view is that ‘the present recovery is quite fragile and that sometime

over the next six months housing market sentiment and prices will fall back.

This could occur quite naturally or have a trigger event.’

Source: www.residential.joneslanglasalle.co.uk

Land Registry - House Price Index October 2009 (released 27 November 2009)

England & Wales – Monthly change 0.6%; annual change -3.4%; average price

£159,546.

‘…the fifth month in a row in which (house price) movement has been above 0 per

cent.’

‘This is the sixth month in a row in which the fall in annual change has eased.’

‘Sales volumes averaged 52,608 per month from May to August 2009’ (a notable

increase from the July reporting noted above). ‘In comparison to this, during the

same months a year earlier (2008), the figure stood at 56,107.’

For Wiltshire, the October Index reported an average price of £179,491, with a house

price rise of 1.2% for the month, leaving prices 5.2% down (change -5.2%) over the

preceding year.

www.residential.joneslanglasalle.co.uk

Documents

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