The explanatory notes provided for each step give a view of the various tables which are completed when the calculator is used.
Step 1: Mix
The planning officer will use the planning application to inform the Council’s Housing Enabling officers of the total number of residential units proposed. The affordable housing policy for the area in which the site is located will be used to inform the contribution towards affordable housing. The amount of affordable housing, whether whole unit(s) or a portion of units that are not provided on-site will be inputted into the model.
The tenure mix requirement (affordable rent, social rented, shared ownership, first homes or other affordable housing tenure) as set out in adopted planning policy or through negotiation with the Council’s Housing Team, will be applied to these units. The type and size of the affordable unit will be based on the market residential units submitted with the scheme.
Step 2: Market values
The open market values of each size and type of the proposed open market units, will be inputted. Information obtained from the Dorset Council Local Plan Viability Assessment (May 2022) alongside monthly published House Price Index (December 2024) for the area, will be used to inform the open market unit values. For instance, £205,896 for 1 bed flats, £288,255 for 2 bed flats, £321,086 for 2 bed houses, £377,987 for 3 bed houses, and £430,824 for 4 bed houses .
Should an applicant submit proposed open market values that are lower than those benchmarked, this will need to be robustly justified by the applicant. In situations where evidence is not considered robust, a third party will be used to independently validate the values with costs being met by the applicant.
Developer return (also referred to as developers profit) for all of the housing types will be inputted into the model. For market housing this is 17.5%, 10% for first homes, and 6% affordable housing. Marketing of market housing is generally inputted as 3%. These developer returns and cost for marketing are again informed by the Dorset Wide Viability Evidence 2022 and are widely accepted by the commercial industry. Should an applicant submit a developers return and marketing fees higher than those use above, this will need to be robustly justified by the applicant. In situations where evidence is not considered robust, a third party will be used to independently validate the values with costs being met by the applicant.
The adopted Community Infrastructure Levy charge (index linked) for the area in which the site is located will be inputted.
Step 3: Affordable housing values
There are three Options for calculating the value of affordable housing market units, as follows:
- Option 1 - Proportion of market value: 57.5% of open market values for affordable rent, 42.5% for social rent and 70% for shared ownership and 70% for first homes. This is based on evidence used in the Dorset Wide Viability Evidence 2022.
- Option 2 - Capitalised rents: This is informed by the local housing authority rates capitalised and then discounted service charges, repairs, and other feeds dependant on the affordable housing tenure.
- Option 3 - User defined: The applicant provides their own information for each affordable housing unit, type, tenure and size. However, if these affordable housing values are less than Method A, this would need to be robustly justified by the applicant. In situations where evidence is not considered robust, a third party will be contacted and these costs will be met by the applicant.
The Council will use Option 1 in the first instance.
Step 4: Commuted sum payment
The model then produces the commuted sum payment value, which is the amount the Council will seek from an applicant.
In circumstances where applicants contest this figure a third party will be used to independently validate the values with costs being met by the applicant.
