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https://www.which.co.uk/news/2018/10/ground-rents-for-new
leaseholders-to-be-capped-at-10-a-year/

This recognises that there is a need for leasehold and in particular for flats
(flying freeholds) but that the rent should only be nominal.

This is, as I understand it, the current position and one which reflects the
direction of travel of policy. On this basis, a nominal rent at £10 per year
would value each flat’s leasehold interest at say £200.

At 54 flats, this would mean that the full leasehold interest would be
£10,800.

I have included this figure in my appraisal.

5.5 Affordable Housing tenure and revenue

As I understand it, the Affordable Housing policy includes ‘A mix of tenure,
normally approximately 75% social or Affordable Rental homes, with the
remaining 25% for intermediate homes, unless the best available evidence
supports a different mix’.

I understand from the previous reports that Affordable Rent is the
preferred Rented option here.

The Affordable Rent calculation is shown below:

My assumptions suggest a capital value equivalent to £1,842 per square
metre. This is very close to Melanie Dwyer’s initial estimate (at £1,806 per
square metre).

It is noted that D and S estimate Affordable Rented revenue at £2,223 per
square metre, adjusting the allowance for management and the yield
downward. These are inappropriate assumptions. There is no apparent

W e a l d e n H o u s e , A s h u r s t W o o d V i a b i l i t y R e p o r t P a g e 17 | 36

Bates No 000317