Commuted sums

Valuations are provided bi-annually for the periods January to June and July to December.

In instances where the commuted sum figures as set out in the table below are disputed then this must be made in writing to Angus Council, within six weeks of the date of publication.

Any dispute must be accompanied by valuation carried out on the same terms by means of an independent valuer.

Valuations as at 31 December 2017 for period January to June 2018 (exclusive of VAT)

Date of Publication – 30 January 2018

Housing Market Area Value for Private Sale (£) Value for social rent (£) Commuted payment (£)
  Range < Range > Typical  
West £23,000 £29 000 £26 000 £1000 £25,000
South £26,000 £32 000 £29 000 £1000 £28,000
East £24,000 £30 000 £27 000 £1000 £26,000
North £24,000 £30 000 £27 000 £1000 £26,000

Valuation Methodology Statement

The commuted sum payment relates to the cost of providing serviced land for affordable housing for the same housing market area.

Assuming that the Housing Supply and Innovation Division of Scottish Government will make Housing Association Grant (HAG) available, then the value of the land is the difference between the affordable land plot which can be purchased using the subsidy and the value of the site for private development ie the commuted sum is the additional amount the housing association or local authority would have to pay over and above the affordable housing land value to obtain an alternative site.

The valuation for affordable housing is based on a residual valuation where the costs of the development are deducted from the calculated income and housing grants as per the More Homes Division Guidance Note (MHDGN 2018/01)

The valuations follow the guidance notes issues by the RICS 'Valuation of Land for Affordable Housing Scotland' GN1002013.

The valuations provided assume notional house plots of 400 sqm for the erection of a three apartment/three person semi-detached house within a development of around ten houses in each of the 4 HMA’s.

It is assumed that the plot will be ready for development with services close by.  The annual social 3 person equivalent rent set by the Scottish Government is used for the purpose of the social rent affordable housing plot valuation along with build costs provided by Angus Council.

The figures provided are on the basis of the following two tenures:

  1. Unrestricted plots for private sale
  2. Social rent affordable housing plot

The commuted payment is the difference between the affordable land plot value and the value of the plot for private development multiplied by the number of affordable housing units required.

It is calculated on the basis of the number of affordable housing units required x (benchmark MV of unrestricted housing plot less benchmark value of an affordable housing plot).

Example Calculation

Commuted sum calculation using the January 2018 figures for a development for 18 houses in Kirriemuir within the West Angus Housing Market Area.
 
The Affordable Housing requirement in Kirriemuir is 25% = 4.5 affordable housing units.

The calculation would be:

Number of Affordable Housing units required x (benchmark MV of unrestricted housing plot less benchmark value of an Affordable Housing plot).

4.5 affordable housing units x (£26,000 less £1,000) equates to
4.5 x £25,000 =  £112,500 Commuted Sum