Planning - the value, incidence and impact of developer contributions: research

Independent research on section 75 planning obligations and other developer contributions mechanisms. The report brings together quantitative and qualitative evidence to inform our wider review.


13. Annex 6: Sources of data for valuing affordable housing contributions

(i) Average house prices for newly built dwellings in each local authority: Register of Sasines, whose records were 'cleaned' by the research team at Rettie and Co.

(ii) Construction and site preparation costs based on a cash flow model of all costs incurred over a two year development period including costs of building a 90 sq. m. semi-detached 2 story dwelling (source Scottish House Condition Survey) at £1,195 per sq. m. (source 'Costmodelling' using the mean figure for Q1 2021 for £15m sized contracts [i.e. appropriate for a 105 dwelling site] in Scotland) plus site development costs at 25 percent of constructions costs, fees at 12.5 percent of both the latter, other costs at 2 percent of both construction and site development costs, marketing costs at 3 percent of the open market units, financing costs at 3.5 percent over the development period (calculated on a monthly basis as costs incurred) and profits of 15 percent on total construction costs.

(iii) Rents and management and maintenance costs of social rented homes taken from reports by The Scottish Housing Regulator and from Housemark; annual net rents for each local authority areas were discounted at 2 percent over 30 years (year 1 nominal net rents with no inflation) to estimate the net present value of the rental income as an estimate of how much registered providers could borrow.

(iv) Mid-market rents calculated as 80 percent of LHA rent levels for each local authority; management and maintenance costs taken from reports by Housemark; annual net rents for each local authority areas were discounted at 2 percent over 30 years (year 1 nominal net rents with no inflation) to estimate the net present value of the rental income as an estimate of how much registered providers could borrow.

(v) Grants taken from the Scottish Government's guidance on grant submissions for social and mid-market rental dwellings and the variations in grants according to size and location.

(vi) The numbers of new homes agreed by developer contributions for each local authority were taken from our survey data, using both the totals agreed, the proportions to be secured by serviced land and by providers acquiring completed units and the tenure of the latter; values were calculated for each local authority; because we had no data from some local authorities the national totals were grossed up, taking account of the population of responding and non-responding local authorities.

Contact

Email: Chief.Planner@gov.scot

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