Development Appraisals - Subs Flashcards
Difference between a Development Appraisal and Residual Valuation?
DA - calculation to establish the site value / profitability / viability of a site using CLIENTS INPUTS
RV - calculation to establish the site value of a development using MARKET INPUTS at the date of valuation
What is the Stamp Duty for Commercial and Residential?
Commercial:
£0 - £150,000 0%
£150,001 - £250,000 2%
> £250,001 5%
Residential
£0 - £125,000 0%
£125,001 - £250,000 2%
£250,001 - £925,000 5%
£925,000 - £1,500,000 10%
> £1,500,000 12%
How do you make up GDV?
Total Residential sales + investment value of Commercial
Where do you get these inputs from?
Residential - Rightmove & Land Reg & Local Agents
Commercial - CoStar, Local Agents
How do you check if they are suitable or correct?
I make sure I verify the information.
I compare them with other transactions in the area
What is your view on affordable housing
In theory I think its good, in practice it can sometimes create exclusion. I am aware of what used to be known as ‘poor doors’
Are you aware of golden brick payments?
Payments from a Housing Association to a Developer for affordable housing
What did you advise the client on potential purchasers?
I advised the client that the development would be attractive to both regional house builders as well as housing associations due to the presence of affordable housing.
30% of 100 units
For loan security purposes - did you have sight of the terms of the loan?
Yes.
- 60% LVR
- Re-financing
- term of 5 years
Cannot recall them
Have you ever adhered to a Serviced Agreement?
Yes.
Includes things such as lender action points etc.
What are the minimum standards for reporting for loan security purposes?
VPGA 2
- Conflicts of Interests
- Two methods of val
- Suitable for loan security purposes
What does Loan Security purposes mean?
Purley
- Value of the loan can be secured against the value of the site.
-
What was a threat?
Purley
- There were a number of similar schemes being developed in the area.
- Economic and political uncertainty.
What was an opportunity?
Purley
Downsizers
What is Help to Buy?
Purley
A scheme for new build homes which allows buyers to raise a small amount of equity in exchange for a loan.
Not just for first time buyers.
You advised them on a sensitivity analysis, how else did you advise them?
Purley
Type of purchasers which would want the apartments
First time buyers, downsizers.
What did you advise your client on the marketability of the proposed development?
How quickly they would sell? Time periods? Marketing? Boards etc.
How did you advise your client that it would be suitable for loan security?
Purley
For this, it was a residential development so I advised that the flats would seek demand from first time buyers and downsizers due to the popularity of the area and close transport links to London.
Strengths - planning permission, no affordable housing, compliant with equality act.
And that after selling all the flats that would cover the loan.
Also that there weren’t any material factors that would be detrimental to the loan.
