"Roland Perry" wrote in message
...
In message , at 12:36:08 on Sun, 8 Apr 2018,
tim... remarked:
The cost of the land is understood to be just under £300m to the
housebuilders, with the finished value of the sites nearing £1bn.

So that's about £350k per house; of which £100k is its share of the
land, another ~£100k for the construction of the house, plus £150k for
building the roads and drains, contributions towards schools and other
amenities, subsidies for "affordable" homes,

ITYF that the latter comes in at about 30K per house

Can you show your working, in terms of the discount that's being offered
by the builder and the percentage of affordable homes on site?

and a small profit for the developer.

leaving

And the "the roads and drains, contributions towards schools and other
amenities"?

a big profit for the developer

What's the industry standard margin for this kind of development? A quick
google suggests that 20% would be regarded as "record breaking" (although
that's what I'd expect on a much smaller development).

15% of £350k is close to £50k, which neatly gives £100k again for the
non-residential infrastructure, community contribution, and loss made on
the affordable houses (which I'd expect to be changing hands at about
£250k).

Benchmark profit 17.5% to 20% of GDV, at the lower end for large sites. So
on a £350k house with 17.5% profit on GDV, this would be a profit of £52,500
near enough. (Profit on GDV is akin to a 'finding the original quantity'
calculation - 50k profit would be 50/(350-50) = 16.6%, 60k would be
60/(350-60) = 20.6%

Anything significantly below this figure and the developer is likely to go
to viability to get planning obligations reduced.

James