Bedford Borough Local Plan 2040 Plan for Submission

Appendix 4

Affordable Housing Commuted Sum Calculations

The commuted sum will be based upon the difference between the open market value of the property and the estimated revenues that would have been paid by a Registered Provider or achieved by the developer from the sale of First Homes for commensurate off-site provision. Sums will be calculated to two decimal places.

1. Calculation of Commensurate Provision

The Council's affordable housing requirement is 30%. With off-site provision of affordable housing the actual development (which is entirely market housing) equates to 70% of a notional development which does provide affordable housing. The affordable housing requirement for the purposes of determining a commuted sum is therefore assessed as follows:

the number of dwellings in the actual scheme x 100 = calculation base for affordable housing requirement
70

2. Dwelling Mix for Affordable Housing:

The assumed dwelling mix for affordable housing will be:

• For schemes that are predominantly houses:
  • 50% 2 Bedroom Houses (72m²)
  • 50% 3 Bedroom Houses (82m²)
• For schemes that are predominantly flats:
  • 34% 1 Bedroom Flats (40m²)
  • 66% 2 Bedroom Flats (62m²)

3. Tenure Balance:

The assumed tenure balance for the affordable housing will be:

• Affordable Rent 75%
• First Homes 25%

4. Affordable Housing Revenue Assumptions:

Revenue assumptions for the affordable housing will be:

• Affordable Rent: Gross rent 80% of open market rent
• less management costs 30%
• Capitalised at 6%.
• First Homes Purchase Price (net of required discount)