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SDS ProVal LS User Manual

1. Exporting the Appraisal Data Sometimes it is necessary to see the appraisal in order to provide support Support can also be provided across the Internet so that an SDS Support person can directly observe what is happening on the user s machine Alternatively the appraisal can be emailed to SDS To send the appraisal to SDS for support 1 Highlight the appraisal in the Project tree 2s Right mouse click cn Select Send to SDS for Support 4 Complete the email pro forma E Send General Support Information In the bottom window select the Support tab Contact details and system information are displayed 78 Administrator Manual Contents Overview 1 0 Account Codes 2 0 Curves Development Cashflow Forecast Spread Profiles 3 0 Organisations 4 0 Product Types 5 0 User Defined Questions 6 0 Life Cycle Costs 7 0 Local Authorities 8 0 Roles and Users 9 0 Permissions 10 0 Benchmarking and Sensitivity 11 0 Globals 79 Overview All configurations are carried out through Global Properties Click the SDS round logo and choose View and Global Properties 1 Account Codes Information about finance codes 2 Curves Forecast spread profiles for use in the development cashflow 3 Organisations Information about your organisation s 4 Product Types Dwelling type definitions 5 User Defined Questions Creating a user defined question 6 Life Cycle Costs Setting up archetypes to match against an appraisal dwelling type
2. 7 Add a Dwelling Type 8 Default Dwelling Types 9 Insert New Dwelling Type 10 Additional Unit Attributes 11 NPV Rates 12 Sales amp Staircasing 13 Rent Allowances 14 Setting the Rent 15 Units Summary 16 Capital Costs 17 Scheme Fees 18 Subsidy 19 Development Cashflow 20 Total Scheme Cost 21 Private Finance 22 Inflation 23 Long Term Capital Receipts 24 Long Term Results 25 Long Term Cashflow 26 Save amp Close 27 Close Application Overview In this Quick Start Guide we take you through the basic steps of starting and completing an appraisal For a full description of each section of the appraisal see the User Manual For a full description of the administrative aspects of the application see the Administrator Manual Step 1 Starting the Application 1 Click on the SDS ProVal LS icon on your desktop 2e Enter the credentials and password as prompted Some of these may already be preset em Click the green OK button to open the application Step 2 Project Folder i Look at the tree on the left hand side of the screen 2 Expand the Defaults folder 3a Expand the Appraisal Templates 4 Select a Template option For the purposes of following this Quick Start Guide we recommend selecting the demonstration template supplied at the time of purchase or for trial purposes This template has illustrative values set by default aie Right mouse click and choose Create from Templa
3. 4 The appraisal will be saved in the Unfiled system folder Creating a Template from an Existing Appraisal Te Expand the Project tree and select the scheme appraisal a Right mouse click and select the option Save as Template 3 You can now start a new appraisal from this new template as described above Note that units will have been removed Creating a Duplicate Template 1 Expand the Project tree and highlight the template name Za Right mouse click and select the option Duplicate ce A new template will now be called Copy of 4 Rename the new appraisal Right mouse click and select the option Rename 20 1 1 2 Starting a New Appraisal from an Existing Appraisal eg Expand the Project Tree and highlight the scheme appraisal name 2e Right mouse click and select the option Duplicate ce A new appraisal will now be called Copy of 4 Rename the new appraisal Right mouse click and select the option Rename De Right mouse click and select the option Edit 1 1 3 Starting a New Empty Appraisal I Right click on a Folder e g My Schemes 2 Select New then ProVal then Scheme Appraisal 3 The new appraisal will be stored in the My Schemes folder 1 2 Open Existing Appraisal 1 Expand the folder in which the appraisal is saved and right mouse click on the appraisal name 2i Select Edit 3a Alternatively double click on the name 1 3 Opening a ProVal XL Appraisal ProVal in Excel la Select an apprai
4. Outright Sale etc Save units of different sizes in an appropriately named folder Sub folders can be created to organise unit types Another possibility is to set some unit types with very few defaults Where inputs can be set by default the appraisal process will be faster Defaults can be amended subject to the user having permission Additional information on setting defaults can be found on the SDS ProVal LS support page of the website 2 1 Creating a Unit Type Default This can be done in 3 ways Li Start a new appraisal and add several different sized units of the same Product Type Save the units individually as Unit Type defaults This is recommended ae Open an existing appraisal Select a unit type and Save as Default Bi Create from an existing Unit Default Create From New Appraisal ie Start a new appraisal Ds Go to Section A expand Unit Attributes 3 Click the button Add a New Unit at the start of Unit Attributes 23 9i Tip For units which have defaults that are similar add several columns at the above step Common inputs can be entered across all types in one operation using a lt Ctrl Enter gt keyboard shortcut On completing the data right mouse click at the head of the column and choose Save as Default Repeat Step 6 for all unit types Save and reopen the appraisal Inputs can now be amended to suit a different set of units and then repeat Steps 5 to 6 Retain this appraisal for
5. use the Alt Esc keyboard shortcut New reports can be designed or existing reports customised to suit the organisation Please refer to SDS for further information Reports can also be accessed from the SDS logo but this requires the appraisal to be open i With the appraisal open 2 Click the SDS logo then click View and choose Reports os Select Preview 4 Select a report Bis To close the report click the red cross gadget in the chart tab 76 21 0 Getting Help amp Support In the Appraisal When completing the appraisal help text is provided on questions and inputs Hover the cursor over the question and a comment tool tip will appear Hover the cursor over the input box and a help tool tip will appear Help Window In the bottom window of the appraisal there is a Help tab This displays both the question comment as described above and the help text This tab can be left permanently open while working on the appraisal Adding User Comments The user can add cell comments about particular inputs 1 Select an input field 2 In the bottom window click on the User Comments tab ce Enter some text 4 A blue triangular indicator will appear in the input field p Place the cursor on this indicator and a tool tip will display the comment Warnings Warnings are reported when the input fails the inbuilt validation rules They are also displayed when the user amends an input set by default Inbu
6. 7 Local Authorities List of local authorities 8 Roles and Users Information about users and their job roles 9 Permissions Details about what job roles are permitted to do 10 Benchmarking and Sensitivity Settings used to create benchmarking and sensitivity reports ii Globals System settings used mainly by SDS 80 1 0 Account Codes Account codes identify where costs and incomes should be accounted for in the finance system They have no impact on the appraisal Codes are shown in the appraisal for information There is no direct link with the finance system Category This is any name for a group of account codes Identify whether it is an I E category individual codes can overwrite this setting Identify whether it is a cash non cash category individual codes can overwrite this setting Expand the category in the left hand tree of this screen to view individual account codes Add Delete codes le Click the Add Code or Delete buttons 2 Identify whether it is an income expenditure this will override the Category setting Be Identify whether it is a cash non cash category this will override the Category setting as Codes can be imported from SDS Sequel see link at top of form Note that codes in SDS Sequel are defined independently of the appraisal 5a Tolerance is currently not used in ProVal LS 6 An Alias is an alternative friendly name by which the account code can be described Click Add Alias and e
7. For product amp scheme viability results see also Summary Window The ratio is not affected by the amount of grant Receipts Set Aside Shown for information only these receipts arise when additional equity is sold on shared ownership dwellings and Social Housing Grant has to be set aside pro rata Receipts ion the long term cashflow will be reduced accordingly 15 2 1 Net Present Value NPV Net Present Value NPV viability results for each unit are displayed To include the NPV of the residual asset value of the unit enter the Asset Value at Year 1 the year when the unit hands over Enter an asset value inflation rate The inflated asset value will then be discounted by the unit NPV Discount Rate over the unit NPV Discount Period to give the NPV of Asset Value at handover Note that this is not shown in the long term cashflow as it is not a cash item The NPV discount rate and period are set in the NPV Rates in Section A or they can be entered here The NPV at the Unit Handover Date is calculated as follows NPV of Net Rent NPV of Capital Receipts NPV of Asset Value NPV of income Allocated Opening Loan NPV at Unit Handover Date The Allocated Opening Loan represents the initial unit capital cost so does not need to be discounted because it is already the present value of the net costs this will typically be the total scheme costs less subsidy A ranking for NPV is provided together with the year in which the NPV
8. Rent can be entered as a specific sum These inputs define a rent which can then be selected when setting the rent Setting the Residential Rent Rents can be varied over the long term cashflow Assuming the rent does not change apart from inflation set the period as Year 1 to 100 The rent is set in two stages In the top half of the input box select a rent calculation method from the drop down list In the lower input box enter an appropriate sum or percentage The rent at Year 1 will be displayed as a Read Only value in the line below To prevent further changes to the set rent including updates to inflation data set Lock Rents to y Note that rents must be unlocked if changes need to be made This fixes the rent so that any changes which might otherwise have affected the rent will be ignored The set rent is displayed as a percentage of Target Rent and as a percentage of the Unsold Equity Service Charges Service Charges i e income can be made equal to Service Costs i e expenditure as set in the Rent Allowances by setting the flag Make Service Charges Always Equal to Costs to y Service Charges can also be set manually Commercial Rent Commercial rent can be varied over the long term cashflow It must always be set as m per annum not as a rent per week or per month Ground Rent Ground rents can be varied over the long term cashflow Round rents continue to be received until sold 47 7 7 Units
9. Sensitivity Benchmarking and sensitivity options will be added in a future update 91 11 0 Globals This area lists system variables that are modified during the application s use We recommend that this area is not used It is mainly for SDS administrative settings lt lt lt lt gt gt gt gt 92
10. as an average per person This is easier and quicker than defining subsidy for each unit type These two tables are linked so that inputs in one will be synchronised with the other Note that the inputs in the two tables are not added together as with capital costs Only enter subsidy in this section which is received as real cash during the development period Subsidy received after the scheme has been completed can be entered in the long term cashflow as a capital receipt in Section H 53 10 0 Section D Development Cashflow The development cashflow shows the expenditure of income and expenditure I E during the development period the capitalised interest cost as well as the monthly requirement for finance during the development period The development cashflow period is unrestricted in length I E items entered as separate sums such as with an analysis of fees can be spread as a total for all items or each item can be spread individually Setting the spread profile at the top level of the I E category e g Subsidy Acquisition Works etc will force all subsidiary items to inherit the same cashflow profile To assist in forecasting the cashflow sums can be spread using a variety of profiles in conjunction with milestones or calendar dates Alternatively selecting the manual option allows each monthly sum to be entered by the user If costs income are amended the cashflow will automatically update when profiles and
11. costs the process is the same The process for Fees is described below 8 1 Capital Costs Scheme Level Acquisition Works Other Costs can be defined over any number of rows Click the green button to add a new row To delete a cost click the red x button Description A text description of the cost Input Type Select from the drop down list Input Value The input sum relevant to the selected Input Type Applies To Choose the units to which the cost applies This data is used to allocated the cost back to the nominated units By default the cost applies to all types Allocate Cost by Select from the drop down list Choose how to spread the cost between the units types 49 selected in the Applies To column Cost Base Year Select from the drop down list The Input Value will be inflated at the Inflation Rate up to the Inflate to milestone Inflate to Select from the drop down list to a milestone date The Input Value will be inflated to this date whole years only Inflation Rate The rate to inflate the Input Value VAT Enter the VAT rate and the Inflated Total will have VAT added Acc Code Any text to identify an Account Code to which this cost should be posted in the finance system This is memorandum information only Underneath this table is a sub total followed by a summary of any costs as defined in Unit Costs in Section A 8 2 Capital Costs Scheme Level Fees Click the radio button at t
12. ground rent set a Ground Rent Yield After selling ground rents no further ground rents will be received Set a Sales to be sold If selling all the equity in one transaction enter 100 Set a period months from the Handover Date to define when the units will be sold A value of zero means that the sale will happen at unit handover All units in the column are treated as having the same sales date Alternatively on the line Defer Initial Sale Until End of Year show the year in the long term cashflow when a sale is to take place For units where less than 100 of the equity has been sold enter Start and End year to define the sale of further levels of equity up to a Maximum Equity to be Sold The sale receipts are timed at the end of the year Staircasing periods are timed from the handover of the unit irrespective of when the first sale event occurs lf after staircasing there is equity remaining the final sale of equity can be sold Revenue allowances do not reduce when the unit staircases but the rent reduces pro rata the unsold equity All rent and allowances will cease when 100 of the equity is sold except ground rents which will continue to be received until sold 7 5 Rent Allowances Rent allowances are the revenue expenses incurred during the long term management of the units These are defined under these headings O O Managing Agent Management Maintenance Service Costs Reinstatement Other Allowanc
13. logo top of screen Click View then choose Charts DevCashflow Chart The chart opens in a separate tab To close the chart click the red cross gadget in the chart tab Alternatively click the button at the underneath the development cashflow 10 5 Development Interest Section D Development Cashflow Enter an interest rate to be used on negative balances a borrowing rate The same rate applies to positive balances an investment rate 57 10 6 Development Cashflow in ProVal LS Compared with ProVal XL The development interest is calculated differently in ProVal LS compared with ProVal XL ProVal in its Excel version In ProVal XL the long term cashflow starts after the last transaction i e typically practical completion or last sale The opening loan in the long term cashflow is the cumulative balance as at the end of the development cashflow ignoring any user adjustments and development interest is capitalised up to the last transaction In ProVal LS a unit type drops out of the development cashflow at its handover date The total cost at that point together with the capitalised development interest is paid for by creating a long term loan In ProVal LS sales income is shown for information in the development cashflow but no sales income is recognised in the development interest calculation Sales receipts are shown in the long term cashflow 58 11 0 Section E Total Scheme Cost This section is Read Only The total sc
14. select the Defaults folder and then expand Unit Types Select a folder and expand to show the unit types 2 You may want to close the Appraisal Summary window and adjust the zoom setting so that you can see both the appraisal window and the Project tree 3 With a Unit Type highlighted hold down the left mouse button drag the Unit Type from the Project tree into Section A and drop it somewhere in the Unit Attributes appraisal area Tip To re use a unit type from another appraisal open the appraisal save the unit type as a default see Section 2 0 and then proceed as above 36 6 3 Duplicate an Existing Type In an opened appraisal duplicate an existing Unit Type 1 Expand Section A Bes In the unit column heading A B C right mouse click Select Duplicate A duplicate unit type is added to the end column of the appraisal To import a unit type from another appraisal 1 Expand the project tree to find the appraisal 2 Highlight the appraisal to list the unit types in the appraisal 3 Drag a unit type from the Project tree into the new appraisal as described in 6 2 above 6 4 Delete a Unit Type ile Right mouse click on the column heading A B C Zs Select Delete Unit Column OR click the cross gadget in the column heading 36 Confirm your decision at the next dialog box 37 7 0 Section A Unit Details Section A lists inputs which can be set at a unit level except for unit capital costs these are in S
15. summary position for the product types of the units just imported Step 10 Additional Unit Attributes 1 Expand Additional Attributes area 2s Review the data and amend input as necessary 3u Use the inner scroll bar on the right to move up and down 4 Collapse Additional Attributes Step 11 NPV Rates Ta Expand NPV Rates area 2 Set a discount rate and discount period for each type 3 Use the inner scroll bar on the right to move up and down 4 Collapse Long Term Rates Step 12 Sales amp Staircasing L 2 3s Expand Sales amp Staircasing The equity percentage to be sold is set here as well as any staircasing For units for sale set the Offset from Handover to define when the unit is sold sales receipts are received For staircasing input a Start Year and End Year to specify when additional equity will be sold this will be averaged across the period and enter the maximum equity to be sold Collapse Sales amp Staircasing Step 13 Rent Allowances Ta Expand Rent Allowances 2 Each unit can have its own allowances set over different periods ae All allowances are set in a similar way 4 Expand each section and review inputs set by default Ds The last allowance is for Major Repairs Step 14 Setting the Rent Expand Rent 2 The first part is read only where the Target Rent and the Rent Cap are displayed for information 3 Enter a Market Rent Yield on the Market Sales V
16. 2 3 Interest Rates The loan interest rate s for each loan type can be varied by any number of periods over the 100 years long term cashflow The interest rate on the development loan is set separately see Section D 33 5 3 Milestones Milestones are key timing events used to facilitate the creation of a development cashflow They can also help inform users when key events are expected to happen Milestones can be set by default in a template using abstract event names There are 8 standard milestones but you can add your own milestone descriptions The standard milestones are Abbreviation Milestone Description CS Cashflow Start EoC Exchange of Contracts Land LCL Legal Completion Land SoS Start on Site FH First Handover FS First Sale PC Practical Completion Last Handover LS Last Sale The first milestone Cashflow Start defines the calendar date of Month 1 of the cashflow When starting a new appraisal the Cashflow Start date will default to the current date and will stay fixed thereafter unless edited It is not an event Milestones will be chronologically reordered when the mouse is moved away from this section An error warning is displayed if a milestone s timing is illogical e g setting FH First Handover before SoS Start on Site You may need to scroll to the right to see the message Enter comments about the milestones in the last column Milestone timing errors are not displayed in the Errors
17. ESShelton GHD Development Services ES ProVal LS USER MANUALS Overview Quick Start Guide User Manual Administrator Manual Main Contents Overview Quick Start Guide User Manual Administrator Manual Last Updated October 2012 Changes relating to release of 12 4 1 Rearrangement of contents within sections 2 Some content moved to a separate sections 3 Reports updated 17 85 Overview of ProVal LS ProVal LS is an appraisal tool for assessing the financial viability of a development An appraisal can consist of any number of different unit types and tenures such as market sale social rent affordable rent shared ownership commercial etc Although appraisals can be created from scratch the recommended procedure is to start a new appraisal from a template A template has pre set scheme wide default values such as inflation rates and milestone definitions Unit types can be organised in a library where all unit inputs can also be pre set Dragging unit types from the library into an appraisal template is a quick and easy way to complete an appraisal Viability results are reported for each unit for all units of the same Product Type and for the scheme as a whole Schemes can be consolidated Standard reports can be supplemented with reports designed by the user Quick Start Guide Steps A Starting the Application 2 Project Folder 3 Appraisal Layout 4 Start Appraisal 5 Loans 6 Milestones
18. Expand Works Costs c Click on Works Cost blue button d Select spread method say Curve e Choose a curve from the available shapes e g S curve Seta From and To date Milestones are recommended g Click Ok 12 6 Repeat for other cost headings Ti When using a Manual method of forecasting the cashflow will have to be manually updated if any cost or income changes 8 Sales income is shown for information in the development cashflow but no income is recognised in the development cashflow or interest The attributable cost for the unit is calculated at its handover date and this is paid off by generating a loan in the long term cashflow where any subsequent sales income will be shown Therefore if the sale of the unit occurs some time after its handover the interest holding cost will be seen in the long term cashflow 9 Collapse Development Cashflow Step 20 Total Scheme Cost 1 Click the E navigation button 2 This is a read only section displaying the costs analysed for each dwelling type for each Product type and for the whole scheme oe Expand the navigation tree and select the option as required 4 Collapse section Step 21 Private Finance Ts a4 Click the F navigation button Expand Loan Report For each Loan Type Product Type the repayment period and the position against the loan parameters set at the start of the appraisal are reported The loan repayment period is the earliest that the
19. Overview Click the Start navigation button if the beginning of the appraisal is not already visible This section now has focus which is indicated by the orange border It has 4 sub sections o Basic Scheme Information Name local authority and other scheme wide data o Loans long term loan parameters o Milestones event timings o Address and other location information 5 1 Basic Scheme Information Read only data has a grey background Cells with a pink background identify essential data Some cells input options as listed in a drop down list For further guidance on cell editing see 3 0 Most of the inputs in this section are free text and the questions are self explanatory Some less obvious data inputs are described below Rent Paid at End of Period This setting applies to rent income in the long term cashflow and affects the way interest and NPV are calculated Although rent is typically defined as a rent per week the long term cashflow converts this to a monthly income Setting this input to Y means that the rent is received at the end of the month Setting to N means it will be received at the start of the month Smooth Tenant Payments Not all months have the same number of weeks Set to Y to smooth the annual rent into 12 equal monthly amounts See also Rent Paid at End of Period above Site Area This is a two part entry Enter either as acres or hectares Changing from acres to hectares and vi
20. Private Finance Requirement 12 3 Value Loan Ratios Section G Inflation 13 1 Inflating Capital Costs 13 2 Inflating Revenue Income Expenditure Section H Long Term Capital Receipts Section Long Term Results 15 1 Scheme Results 15 2 Unit Results 15 2 1 Net Present Value NPV 15 2 2 Internal Rate of Return IRR 15 2 3 Loans 15 2 4 Cumulative Deficit Section J Long Term Cashflow Affordability Section L Residual Land Value Consolidation Reports Getting Help amp Support 18 1 0 Opening Appraisals This section describes starting a new appraisal and opening an existing appraisal for further editing There are 3 options dg Start a new appraisal ae Edit an existing appraisal 3 Start a new Consolidation 1 1 Starting a New Appraisal The recommended method of starting a new appraisal is to create one from a template This will minimise data input and is therefore quickest There are 3 general methods for starting a new appraisal T From a template Zs From an existing appraisal Za From scratch 1 1 1 Templates New scheme appraisals are typically created from templates These are stored in the folder Appraisal Templates in the Defaults system folder at the top of the Project Tree If you cannot see the project tree click the round SDS logo choose View and then select Project Tree A template is like a blank appraisal except that some scheme wide values are preset The template does n
21. Section B expand Fees Using the 3 radio button options at the start of this section choose whether to set fees at the Unit Level at the Scheme Level or Combined i e by a combination of Unit Level and Scheme Level inputs To define the fees at the Scheme Level add costs in the first table Assign the cost to a Product Type To define fees at the Unit Level expand the table Unit Fees below the Scheme Level table Collapse fees 11 Step 18 Subsidy Expand Section C Subsidy a Subsidy grant can either be set per unit in the first table or at a scheme level in the table below Subsidy Analysis b Each row identifies a source of grant a Do not enter Internal Subsidy at this position Inputs here are treated as actual cash received 3 Click the green icon to add more rows 4 Collapse subsidy section Step 19 Development Cashflow 1 Click the D navigation button as Set interest rate for the development cashflow applicable to negative and positive balances 3 Expand Development Cashflow Forecast 4 The development cashflow is in landscape format and is displayed in the centre of the screen with its own horizontal scroll bar an All individual subsidy and cost items can be cashflowed separately or the total for the heading can be cashflowed as a single sum a Cashflow forecast profiles are available for fast completion of the cashflow Alternatively costs can be entered manually b
22. Summary This has 2 subsections Floor Area amp Habitable Rooms Costs Summary Floor Area amp Habitable Rooms This is a simple statement of total floor area split between residential and commercial also showing any communal floor area and a conversion from m to ft Habitable rooms summary is also displayed for Residential Rent Residential Sale and Other Costs Summary A summary of Total Scheme Cost is shown on a tab for each unit type See also a similar display in Section E Averages are shown per unit and per person along with percentage ratios with Market Sales Value The cost elements making up the Total Scheme Cost TSC are also shown as percentages of the TSC Cost Value Percentage The ratio of the Total Scheme Cost divided by the Current Market Sales Value Note that the total scheme cost does not include subsidy or sales income 48 8 0 Section B Capital Costs Capital costs can be defined at the scheme level e g a single acquisition cost for the scheme and or for each Unit Type With the exception of Fees where special rules apply capital costs entered for the scheme are added to costs entered for the units so that a combination of inputs is possible All capital costs are allocated to a Product Type and apportioned to each unit by floor area average per unit or by persons Section B has these subsections o Acquisition Cost o Works Cost o Fees o Other Costs For Acquisition Works and Other
23. T Enter the VAT rate and the Inflated Total will have VAT added Acc Code Any text to identify an Account Code to which this cost should be posted in the finance system 51 8 3 Unit Capital Costs Acquisition Works Fees Other The inputs here are Input Type Select from the drop down list box Input Value Enter a value to match the Input Type Cost Base Year Select a year from which the Input Value should be inflated Optional Inflation Rate Enter a rate to inflate the Input Value Inflate to The milestone to inflate the Input Value from the Cost Base Year by the Inflation Rate VAT Add VAT to the inflated cost The inflation option is useful when the payment is expected to be made some considerable time into the future or when a default value was set some considerable time ago Inflation is added in whole years only The following are Read Only outputs for each unit o Unit Cost Gross Total including inflation and VAT o Allocated Costs as defined at the scheme level o Total capital cost 52 9 0 Section C Subsidy Subsidy SHG other public grant but not internal subsidy can be entered for each unit type or entered as a single summarised sum for the scheme In the first table enter subsidy on an individual unit type basis Click the green button to add additional sources of grant Alternatively in the second table define subsidy as a scheme total or as an average per unit or
24. all dwelling type columns that share the same product type on a consolidated basis The Loan repaid by year reports the repayment year number counting from the first handover of any units in the whole appraisal from all the dwelling type columns of that product type Example 1 Assume three dwelling columns A B C are of a single product type e g affordable rent The individual loan repayment periods for these might be Year 30 35 and 38 respectively Taken together therefore the Loan Repaid by year may be reported in the Loan Report in Section F as Year 36 This is because of the consolidation effect i e income from units that repay their loan early helping to repay the remaining loans quicker 60 The Last Repaid Year as reported in the Product Summary will be Year 38 i e the last repayment year of all units of that product type The way loans are repaid can be modified by the user The attribute cross subsidy can be turned on or off in the Loans section at the start of the appraisal 12 1 1 Loan Cross Subsidy With cross subsidy turned on the various product type loans will help each other out Surplus cash from one product type will automatically be used to repay a poor performing loan The system applies any surplus to pay off the most expensive loan first i e the one with the highest interest cost Determining this cross subsidy priority is reviewed on a monthly basis With this option tu
25. alue or a specific Market Rent per Week as applicable 4 Expand Residential Rent per week Da Select the way you want to set the rent and enter 6 There are two entries In the top part of the input select a method e g of Market Rent of Target Rent etc In the lower input set an appropriate value e g 80 of Market Rent Ti Note that the rent can be changed over different periods in the long term cashflow 8 Collapse Rents Step 15 Units Summary Le 2i 3s Expand Units Summary This is a Read Only section A Floor Area amp Hab Room Summary is shown 10 Expand the Costs Summary Select the a unit tab to display its cost summary Step 16 Capital Costs Iy Click on the navigation button B 2a Acquisition Works Fees and Other Costs are set here They can be set at a scheme level e g a scheme acquisition cost and or at a unit level a cost attributable to that unit type only 2 Capital Costs whichever way they are set are always apportioned to each unit The apportionment method is set by the user 4 Expand Acquisition Bs To enter a cost for the scheme complete the first section Click green button to add a new cost row 6 To enter a cost at a unit level expand Unit Acquisition Select a Unit Type This when combined with the Unit Value defines the cost Th Collapse Acquisition 8 Set Works costs in the next section in a similar way Step 17 Scheme Fees Ls 2i While in
26. as been entered This sum will be zero when the cashflow has been properly completed A warning will be given when the cashflow has not been properly completed Earlier Total This is the cumulative total before the start of the visible part of the cashflow Cashflow Monthly columns show calendar dates month numbers and milestones At the bottom of the cashflow forecast a scroll bar allows the cashflow to be scrolled left right Only a small section of the cashflow will be visible at any one time on screen Cut copy and paste commands are available when the cursor is in the cashflow forecast area right mouse click to access these Later Total This is the cumulative total after the visible part of the cashflow 55 Last Date The last date of the cashflow These columns can be selected deselected by right mouse click when the cursor is placed on the column headings row 10 2 1 Spread Profiles Expand a cashflow I E description row Where cost headings have multiple input rows the costs can be forecast as a total all individual costs will have the same profile or each row can be spread separately It is recommended in the first instance to cashflow at the total level and set profiles for subsidiary items by exception WARNING Setting the profile at the total row will overwrite all individual spread profiles Click the Spread button Choose an option o By percentage o Manual o Curve Spreading Using the Percentage O
27. ce versa will force a conversion E g Enter 2 Acres Change to Hectares the input is converted to 0 81 31 5 2 Loans Each Product Type has its own long term loan type for convenience this has the same name as the Product Type Each loan has its own loan repayment method loan terms and covenant settings All units of the same Product Type inherit the same loan type When Cross Subsidy has been set to Y es subsequent income from a Product Type where the loan has been repaid will be used to assist the repayment of the next most expensive loan type 5 2 1 Loan Repayment Method amp Loan Terms There are 3 Loan Repayment Methods ils Overdraft recommended 2 Annuity cm Hybrid Overdraft recommended This method repays the loan principal and interest as quickly as income allows If the income exceeds the loan interest the loan balance will reduce but if income is less than the interest cost the loan balance will increase just like an overdraft A loan repayment period is not set for this method Instead the appraisal reports the year that the loan can be paid off It is possible that the loan will never be paid off if the interest is very high and or the income is very low A cashflow surplus arises once the loan has been paid off Annuity This repays the loan principal and interest by equal annual instalments rather like a repayment mortgage These instalments will change if the interest rate changes H
28. eak Cumulative Debt the total cash deficit which has accrued when the income cannot meet the annuity loan repayment Peak Cumulative Debt Year the year in which the Peak Cumulative Debt occurs First Cumulative Breakeven Year The first year in which surpluses after paying the annuity loan repayment have repaid the earlier deficits Last Cumulative Breakeven Year The last year in which surpluses after paying the annuity loan repayment have repaid the earlier deficits Normally this is the same as the First Cumulative Breakeven Year unless deficits arise subsequently 68 Overdraft recommended Peak Loan this will increase if the income is less than the interest on the loan In extreme conditions the loan may never be paid off Year Income First Exceeds Cost the year in which the income exceeds the interest on the loan Usually called the breakeven year Peak Cumulative Debt not applicable Peak Cumulative Debt Year not applicable First Cumulative Breakeven Year not applicable Last Cumulative Breakeven Year not applicable Hybrid Peak Loan will always be as at Year 1 of handover If interest is greater than income a deficit will arise This deficit shown as a negative cashflow will increase until the income exceeds the loan interest at which point the cashflow deficit is paid off followed thereafter by the repayment of the loan Year Income First Exceeds Cost the year in which the income exceeds the int
29. eceipts In this section capital sums can be entered in the long term cashflow 1 Click the green button to create an input row Be Complete the inputs as prompted 3 Positive sums indicate capital receipts Negative sums indicate a capital expenditure 4 The receipt will be shown in the long term cashflow as Other Capital Receipts in the loan section of the cashflow 64 15 0 Section Long Term Results This has two sections o Scheme Results o Unit Results 15 1 Scheme Results Max Annual Deficit Year The year in which the cashflow is at its most negative Capitalised Year 1 Net Revenue Deficit The revenue deficit capitalised at the interest rate Cumulative Surplus at Year x Period as defined in Section A Long Term Rates NPV Discount Rates The NPV discount rate s as set in Section A Long Term Rates Summarise Cashflow to Year x Period s as defined in Section A Long Term Rates NPV at First Handover The Net Present Value of the scheme is calculated by NPV Net rent Cap Receipts Loan The loan represents the initial capital costs at the point the units hand over If the scheme has phased handovers then loans will also be discounted NPV of Net Rent Only The Net Present Value of all net rental income Capital Value of Scheme at Year 1 The Net Present Value of a capital value as defined in Section A This sum is nota cashflow item It is typically the residual asset value of the unit s Discounted Capi
30. ection B see below All inputs can be set by default Section A has these subsections 7 1 Unit Attributes 7 2 Additional Attributes 7 3 NPV Rates 7 4 Sales amp Staircasing 7 5 Rent Allowances 7 6 Rent 7 7 Units Summary 7 1 Unit Attributes These primary attributes describe the unit type A dwelling description The number of units of this type The floor area A Product Type description sometimes loosely described as the tenure Inputs are defined per unit 7 1 1 Dwelling Description Any text that helps describe the unit type E g House Flat Shop Type ABC1 Adding after the description will force the description to change depending on whether it is identified as a house or flat the Product Type and the number of bedrooms Entering the on its own will have the same effect 38 7 1 2 Units The number of units of this type 7 1 3 Floor Area Although this can be defined to suit your own purposes it is usual to input the gross internal floor area Additional floor area for other communal and shared spaces can be added in Additional Attributes and in the Units Summary 7 1 4 Product Type The formal description of this unit type Select from the drop down list of options O O O O O Affordable Rent Commercial Intermediate Rent KW Intermediate Rent KW New Build Homebuy New Build Homebuy Other Private Rent Rent to Homebuy Social Rent In the above descripti
31. elect an organisation Click on the icon to the left of its name Select an image from a file on your system Delete Click Delete to remove a selected site or organisation 83 4 0 Product Types Product Types are descriptions of a dwelling type e g Affordable Rent Homebuy Outright Sale By default a list of types is provided These cannot be amended Adding modifying product types TLs 2 3s Click Add Amend the name to your choosing Set the attribute to describe the behaviour of the appraisal The attributes are Sale Can the unit be sold Commercial is it non residential Rented can a rent be set Shared can it be partially sold e g Homebuy Click Ok to confirm changes Click Delete to remove the product type from the list Click Edit to amend details of existing product types 84 5 0 User Defined Questions Questions prompting data input can be created by the organisation The tree lists all questions They are grouped under Consolidation Dwelling Type and Scheme Appraisal then by section then by inputs or outputs results System questions cannot be edited except for the Comments This is the text which will appear in a tool tip when the cursor is placed over the question This text will also appear in the Help window of the appraisal along with the system help Add A Question 1 Select a section where the new question is to appear 2 Click Add 34 It will show as New Ques
32. erest Usually called the breakeven year Peak Cumulative Debt the total cash deficit which has accrued when the income cannot meet the interest Peak Cumulative Debt Year the year in which the Peak Cumulative Debt occurs First Cumulative Breakeven Year The first year in which surpluses after paying the interest have repaid the earlier deficits Last Cumulative Breakeven Year The last year in which surpluses after paying the interest have repaid the earlier deficits Normally this is the same as the First Cumulative Breakeven Year unless deficits arise subsequently Interest Interest Total The total long term interest incurred Min Interest Cover Year The year when the ratio of interest to net income is worst Target Interest Cover Enter a desired ratio of income to interest Target Interest Cover First Met The year the Target Interest Cover as above is met No of Years Interest Cover is met The period of the cashflow where the Target Interest Cover as above is met or exceeded 69 15 2 4 Cumulative Deficit Cumulative Deficit Surplus is the total deficit after interest loan repayments at the end of the NPV period The maximum Annual Deficit is the year in which the worst deficit occurs Capitalised Year 1 Net Revenue Deficit is the capital value of the necessary loan adjustment to ensure a break even at Year 1 year of handover using the long term interest rate 70 16 0 Section J Lon
33. es 44 o Voids and Bad Debts o Major Repairs Managing Agent When using an external lettings agent specify the fee paid to the agent as a percentage of the gross rent collected excluding service charges and ground rents VAT can be added to this cost Management Specify a sum per annum per unit This cost can be inflated from the Management Inflation Base Year up to the unit handover date at the inflation rate specified at the start of Section G Inflate Allowance to Handover at Inflation is applied to whole years only Maintenance This follows the same principles as described above for Management Service Costs This follows the same principles as described above for Management A separate Service Charge the income is set in Rents section When rents are set which are inclusive of a services charge set the cost of providing the services here Reinstatement This follows the same principles as described above for Management Other Allowances This follows the same principles as described above for Management Voids and Bad Debts Specify a loss to be deducted from the gross rent for voids and bad debts This will also apply to Service Charges 45 7 5 1 Major Repairs This cost includes major repairs planned and cyclical maintenance There 2 ways to define this cost Ixy By establishing a sinking fund recommended a By defining life cycle costs Sinking Fund o Input Type Select the appropriate o
34. future use should you wish to review defaults The following unit values are set in Section A O O O O O O Unit Attributes Additional Unit Attributes NPV Rates Sales amp Staircasing Rent Allowances Rent Unit capital costs are set in Section B and subsidy per unit is set in Section C Create From Existing Appraisal Les 2r 3s 4 Open an existing appraisal Expand Unit Details in Section A Expand Unit Attributes Right mouse click at the head of the column and choose Save as Default Create From an Existing Default Type E 2s 3s In the project tree expand the Templates folder Expand Unit Types folder Select a folder and choose a unit type Right mouse click and select Duplicate This will create Copy of 24 If necessary drag this copy to a different folder Right mouse click on Copy of and select Rename Amend as necessary and save Right mouse click again and select Edit Amend data Click the Close gadget at top of Column and save the changes 25 3 0 Entering Data General Iz To expand a particular section of the appraisal use the plus gadget or the minus gadget to collapse hide it Collapse all parts of a section with a key combination of Ctrl plus minus sign Read only data is identifiable by a grey background This data cannot be edited The permission setting determines whether the user s job role permits editing Other options a
35. g Term Cashflow Each section of the cashflow can be expanded and or collapsed to facilitate viewing To see future years of the cashflow use the scroll bar at the bottom of the cashflow It extends to 100 years Year 1 is set by the First Handover Milestone E g if the First Handover Milestone is say February 2014 then Year 1 of the long term cashflow will begin at February 2014 and end at 31 January 2015 Income expenditure is linked to milestone events such as the unit handover and sales timings Charts Click the Show Charts button in the long term cashflow Alternatively click the SDS logo select View then choose Cashflow Charts The chart opens in a separate tab To close the chart click the close gadget red cross in the chart tab 71 17 0 Section K Affordability The affordability section considers the purchaser s cost of buying a unit Costs are made up of mortgage costs for the equity purchased rent and service charges T The Current Market Value can be edited It will link to the input made in Section A Specify a purchaser s mortgage APR and repayment term For the purposes of calculating the mortgage cost a standard repayment mortgage is assumed If applicable enter a deposit to be paid by the purchaser This can be by a percentage of the market value of equity purchased or by a sum These inputs are linked The deposit will reduce the mortgage The mortgage required and cost per year per month and pe
36. g a cell note in Excel While in the cell go to the User Comments tab in the bottom window and type something A triangular blue cell indicator will be displayed Hover over the indicator to see the comment 27 4 0 Appraisal Windows Overview Ts Start a new appraisal Several new windows appear The appraisal is displayed in its own tab and so it is possible to have multiple appraisals open and to move between them by selecting the tab This tab also has the close gadget which will prompt the save menu 2e To maximise the screen view of the appraisal close the Project tree and Summary widow using the lt minimise gadget Double click on the vertical bar to reveal it or select Project Tree from the View menu option in the SDS logo om To zoom the image place the cursor on the title bar and use the mouse wheel You can also Reset the Zoom from the View menu in the SDS button 4 To remove the blue cloud background choose the View menu in the SDS button and select Remove Cloud Background 4 1 Appraisal Summary Window This has two tabs 1 Summary 2 Section Map Summary The Summary tab displays the key results of your appraisal The top panel shows the Appraisal Summary all units and the panel s underneath show similar results for each Product Type in the Appraisal Section Map The Section Map tab highlights which appraisal section has focus There is a Question Finder navigation box at the bottom of this wind
37. ge Earnings Multiplier and b using the Target Total Cost Earnings Earnings Ratio This result is based on the Mortgage Earnings Multiplier Affordable Equity Share using Target Earnings Ratio The affordable equity share can be calculated from two positions a using the Mortgage Earnings Multiplier and b using the Target Total Cost Earnings Ratio This result is based on the Target Total Cost Earnings Ratio Min Affordable Equity Share This is the minimum of the above two results This level of equity will mean that the purchaser will qualify for the mortgage and stay within the Target Total Cost Earnings Ratio Outright Sale Cost per Week The cost of purchasing 100 of the equity less any deposit by a mortgage Homebuy Saving per Week This is the difference between the Outright Sale Cost per Week and the actual cost per week Homebuy of Full Sale Cost This is a comparison of the actual cost with the Outright Sale Cost Important The calculation of the Affordable Equity Share ignores the difference in rent which would follow an actual change to the equity share purchased 73 18 0 Section L Residual Land Value The residual land value for any unit can be assessed from its Gross Development Value GDV The residual land value is what a purchaser could afford to pay for the land based on the GDV the development costs and the profit required For private sales the GDV will be the estimated Current Market Value T
38. ginal default value o Cut remove the contents of the cell to the clipboard o Copy copy the contents of the cell o Paste paste the contents of the clipboard into the cell o Copy Left this enters the value across all columns to the left o Copy Across this enters the value across all columns left and right o Copy Right this enters the value across all columns to the right o Print prints a screen view of the section o Export Appraisal Exports the data to an XML file o Permissions Administrator function to restrict access to the cell The options are Editable Read Only or Hidden and are set by job role to which the user has been assigned 3 2 Defaults Where a value has been previously specified by default it can still be changed assuming the user has permission After changing a default a warning message will be displayed and added to the Warnings tab in the bottom window An orange triangular indicator will be displayed in the cell to identify this event Hover over the indicator to see the Warning message Inputs which have no default value will be checked for being within a reasonable range This range is set within the application Where the input lies outside this range a warning will be given and if left outside the range the Warning indicator will remain Warnings of this kind are not necessarily mistakes just that the input is unusual 3 3 Comments You can annotate your input with a comment like addin
39. he GDV for a social housing unit is made up of the following sums o Affordable Loan plus o Internal Subsidy an input representing the policy of the HA plus o Sales Income as defined in the appraisal o External Subsidy as defined in the appraisal The Affordable Loan is the NPV of the net income Note that this calculation does not guarantee that the net rent can repay the loan within the desired loan repayment term The Assessed Land Value is derived from the GDV as above less the following costs o The works cost o An assumption by percentage of the GDV for fees and interest o An assumption by percentage of the GDV for profit Note that Stamp Duty Land Tax is not deducted The Residual Land Value RLV will generally be higher for larger units To make valid comparisons between different unit types the RLV has to be converted to a value per acre This is achieved by applying the Average Plotting Density upa units per acre Rankings for each unit type are shown where the highest RLV per acre has a ranking of 1 Important Note The RLV results are indicative This section is not a detailed residual land appraisal as might be used in the private sector It shows the land values for each unit type to aid in determining the unit mix of the scheme 74 19 0 Consolidation A consolidation holds data from more than one appraisal There is no limit on the number of appraisals in a consolidation NB A consolidation holds dyna
40. he question is about You can also hover the mouse over an input cell to display the Help 29 User Comments This is a free text entry box so that you can add your own notes and comments E g you might want to explain why you have used a particular value A blue cell indicator will identify comments Hold the cursor over the indicator to see the comment Validation This area can be used to explain reasons for inputs being outside validated limits Errors This displays errors which have been made by the user A field is provided for the user to add a comment about each error An error is displayed when an essential input cell has not been completed A red cell indicator will identify such errors Hover the cursor over the indicator to see the comment The number of errors will also be displayed on the tab of the Errors window Warnings This displays when entries fall outside a system defined validated range and or when a default value has been amended A field is provided for the user to add a comment about each error warning An amber cell indicator will identify warnings and will display any user comment made in relation to it Hold the cursor over the indicator to see the comment The number of warnings will also be displayed on the tab of the Warnings window A Warning is not necessarily an indication of a mistake Support This displays information about how to get help from SDS and other information 30 5 0 Appraisal Header
41. he start of this section to select the preferred method of defining fees Unit Level Define a fee in the Unit Fees table for each unit by using a simple input The Fees Analysis table will be ignored The process is as described below e Scheme Level Use the Fees Analysis table to calculate fees from a detailed analysis of costs Any fees defined in Unit Fees table will be ignored Combined Use both methods described above and add the results together In the absence of a default set by the user this is the application default option 50 8 2 1 Fees Analysis Table Click the green button to add a new row To delete a cost click the red x button Description A text description of the cost Input Type Select from the drop down list Input The input sum relevant to the selected Input Type Applies To Choose the units to which the cost applies This data is used to allocated the cost back to the nominated units By default the cost applies to all types Allocate Cost by Select from the drop down list Choose how to spread the cost between the units types selected in the Applies To column Cost Base Year Select from the drop down list The Input Value will be inflated at the Inflation Rate up to the Inflate to milestone Inflate to Select from the drop down list A milestone date The Input Value will be inflated to this date whole years only Inflation Rate The rate to inflate the Input Value VA
42. heme cost with a basic cost analysis together with averages and percentages is shown for the scheme for each tenure and for each unit type Expand the tree and select the appropriate option 59 12 0 Section F Private Finance This has 3 subsections Ig A loan report a The private finance requirement 3 Value Loan Ratios Details of the different loan types repayment method and interest rates are defined in the Loans section at the start of the appraisal 12 1 Loan Report In the Loans section at the start of the appraisal a loan repayment method viz overdraft annuity or hybrid is assigned to each product type e g affordable rent social rent shared ownership etc In the appraisal each dwelling type column e g 1 bed flat 2 bed house etc is assigned a particular product type Each dwelling type column in Section A has its own long term loan The loan begins at the handover of the units in that column Units in other dwelling type columns may have different handover dates For each product type the Appraisal Summary window reports the financial results of all the units that share that product type One of these is labelled Last repaid year This is the worst year number counting from the first handover of any product type in the whole appraisal to repay the loans for all units in all dwelling type columns of that product type The Loan Report in Section F shows the financial results of all the units in
43. ilt validations are broadly set and are intended to prevent typing errors An orange warning triangle will appear in the input field Place the cursor on this indicator and a tool tip will display the warning There is a tab for all warnings in the bottom window The tab will show the number of warning messages A reason for the input can be added in the Warnings tab Scroll to the right to see the Reason heading When a reason has been given this will be displayed with the tool tip Itis also displayed in the Validation window Inputs as set by default may initially fail the validation test Once they are saved as a default warnings will not be displayed in a new appraisal If the user amends the default value a warning will be created as described above 77 Validations This window can be used to enter the user s comments when a default value is varied or if the system validation limits are exceeded It is linked to the Reason cell at the end of the list view in Warnings Errors Errors are generated when an essential input is missing A red warning triangle will appear in the input field Place the cursor on this indicator and a tool tip will display the error There is a separate tab for all errors in the bottom window The tab will show the number of error messages A reason for the error can be added in the Errors tab Scroll to the right to see the heading When a reason has been entered this will be displayed with the tool tip
44. increase If the income is insufficient to repay the interest the loan balance remains the same and the shortfall is reported as a deficit Deficits will accumulate until income exceeds the interest at which point the deficits will be paid off and finally the loan balance will be repaid 3 Set a Loan Rate for the long term cashflow This can be set over multiple periods and can vary for each loan type 4 Set last column Cross Subsidy to Y es This setting ensures that as the loan on one Product Type is repaid the income from those units is used to repay other loans SP Collapse Loans Step 6 Milestones Ws Expand Milestones 2 The Cashflow Start date is not an event simply a calendar date for Month 1 of the development cashflow typically set to the day that the appraisal is created om Each milestone event is set by an offset from an earlier event or to the Cashflow Start date For each milestone choose a description then set an offset months The calendar date will be displayed 4 Move the cursor away from this section and if the sequence has changed the milestones will be reordered Warning messages are displayed if the sequence of milestones is illogical Da Unit handovers are defined in the appraisal by setting an offset i e a period of months from the First Handover milestone The Last Handover or Practical Completion is calculated from the last unit handover in the appraisal and so does not have to be set as a miles
45. is zero NPV Breakeven Year Note that the NPV for the unit is shown at its handover date When units have different handover dates the NPV for the scheme will not be the sum of the NPV for each unit NPV results calculated at the same point in time are given as follows These can be added together NPV at date of the First Unit Handover NPV at the date of the Last Unit Handover PC 67 NPV at the land acquisition date Legal Completion of Land milestone 15 2 2 Internal Rate of Return IRR Internal Rate of Return i e the discount rate which returns a zero NPV at the point of handover is displayed together with the ranking 15 2 3 Loan This has these sections o Allocated Opening loan o Loan Repayment Year o Interest Total The Allocated Loan is derived from the total costs for the unit less any subsidy Sales income will be taken into account in the long term cashflow and will be used to reduce the opening loan balance Loan Repayment The payback results accord with the loan repayment methodology adopted as set in the Loans section at the start of the appraisal and described in 5 2 1 above See also the loan report for the Product Type given in Section F Annuity Method Peak Loan will always be as at Year 1 of handover as the principal is repaid from the beginning Year Income First Exceeds Cost the year in which the income exceeds the annuity loan repayment Usually called the breakeven year P
46. ket ignore the tenure as at January 1999 This value is usually derived by applying an index to the Current Market Value Property Indices are published on the web by Nationwide Halifax and others 41 7 2 6 Offset from First Handover The number of months after the First Handover milestone date Enter 0 if the handover is the same as the First Handover milestone 7 2 7 Handover Date Read Only This is the calendar date that the unit hands over 7 2 8 Adjust Area by Input a percentage adjustment when additional floor area is required for units which have communal or circulation space outside the unit floor area This input is linked to Additional Floor Area see below Enter extra floor area in either cell and the other cell will display accordingly 7 2 9 Additional Floor Area Additional Floor Area by m can be added for units which have communal or circulation space outside the habitable floor area This input is linked to Adjust Area by Enter extra floor area in either position and the other field will display accordingly Additional floor area by m can also be added at a scheme level in the Units Summary 7 2 10 Habitable Rooms Enter the number of rooms within the unit which are defined as habitable These are typically bedrooms and living rooms 7 2 11 Storeys Enter the number of storeys The number of storeys for flats can be defined flexibly meaning either the number of storeys in the flat or the n
47. l therefore handover in May and setting a sales offset of 4 months will mean that the sales income from these units will be received in September 5 4 Site Address The Site Address section is underneath Milestones Add additional postal address details of the scheme location If you have a suitable internet connection entering a postcode will display the Ordnance Survey X and Y coordinates and the latitude and longitude Entering the first part of a postcode will return the position for the centre of that area 35 6 0 Adding amp Deleting Unit Types There is no limit to the number of unit types in an appraisal However speed may be affected depending on the hardware specification and network speed When starting a new appraisal or editing an existing appraisal a new unit type can be inserted into the appraisal in one of two ways I Using the Add a New Unit button 2 Dragging a unit from the Unit Types library in the Defaults folder recommended Ss Duplicate a unit from within the appraisal or drag from another appraisal 6 1 Add New Unit Button Click Add a New Unit button at the start of the Unit Attributes in Section A An empty column will be added to the appraisal There are no preset inputs but there are system defaults which check the reasonableness of the input 6 2 Importing from the Unit Types Library This is the recommended method Expand Section A and expand Unit Attributes F From the Project tree
48. l not appear in the appraisal as set by the appraisal Funding Year 88 8 0 Roles and Users This section allows you to define those users who can access the application and set their job role Security and permissions settings apply to a job role The tree lists existing roles and users There is no limit to the number of users held within the system but each user will take a licence key the first time he she logs in Once the organisation s licence total has been reached no further users will be allowed to log in Licence keys are provided by your supplier Add Role dg Click the button Add Role 2 Give the role a name 3a Enter any useful information about this role such as what users can cannot do 4 Click Add Remove to assign a user to the role All users must be assigned to a role Add User 1 Select a role in the list which the user will have Dis Click the button Add User 3a Enter the following attributes Name of the user Log on what the user types to log into ProVal LS Reset Password overwrites this user s current password Is active setting this to N o prevents the user from logging on Address details as appropriate Use the Add Remove button Roles the role s which the user has been assigned to Sites where the user is located Use the Add Remove button Delete User Role ale Click Delete to remove the selected user or role from the system 89 9 0 Permissions This sectio
49. loan can be repaid from the income of the relevant units alone as measured from the first handover of all units Expand Requirement tab This is a Read Only position showing the long term loan for each Product Type If appropriate make ad hoc adjustments to the loan and for internal subsidy not recommended on the Product Type tab 13 Step 22 Inflation 1 Click the G navigation button Da Set a Base Inflation Rate this relates to the user s preferred definition e g RPI CPI etc 3 Expand Income Inflation Margins 4 Set each margin to be added or deducted from the Base Inflation Rate as required Da Expand Allowances Inflation Margins 6 Set each one as required 7 Collapse Inflation Step 23 Long Term Capital Receipts l Click the H navigation button Ds Expand Long Term Capital receipts on Add lump sums received in the long term cashflow as appropriate 4 Collapse section Step 24 Long Term Results This section displays the viability results for the scheme and for each unit 1 Bis 3s Click the I navigation button Expand Long Term Results Note that the NPV of the scheme is calculated at the first handover date of all units For other NPV calculations expand Unit Results Collapse Outputs 14 Step 25 Long Term Cashflow Expand Cashflow The cashflow extends to 100 years and has its own horizontal scrollbar Click on the Show Charts button in the centre of the
50. mic data This means that if the appraisal is amended after being consolidated the consolidation will be updated To create a static copy of the appraisal data first create a copy of the appraisal right click on the appraisal name in the project tree and select Duplicate It is advisable to lock this copy so it does not get amended further To lock the appraisal right mouse click and choose Lock Consolidations cannot themselves be consolidated Data in the consolidation cannot be edited To create a consolidation 1 Highlight an appraisal folder in the project tree 2 Right mouse click and choose New a Choose ProVal 4 Choose Consolidation oe A new consolidation will be created note that it has a different icon 6 Rename the consolidation appropriately ce Drag and drop appraisals from the project tree into the consolidation The consolidation reports the following Consolidated costs A list of schemes and the details of their consolidation Unit Details Long Term Cashflow 75 20 0 Reports There is a selection of standard reports You must select the appraisal in the project tree first but there is no need to open it 1 Select the appraisal in the project tree Be Right mouse click cm Choose Reports 4 Select a particular report 5 Use the menu options for printing emailing saving etc 6 To close the chart click the close gadget in the chart tab To switch between the appraisal and the report
51. milestones dates have been used unless set as a manual spread option Development interest rates cashflow profiles and milestones to be used in the appraisal can be set in the appraisal template Section D has the following subsections o Interest rates and the interest total together with a summary report of events o Development Cashflow Forecast 10 1 Read only Information Reports Total Interest Cost Where this is shown as a negative it means an interest cost has been incurred Total Remaining Balance to Forecast This should be zero when the cashflow has been properly completed Cashflow Events Calendar dates Peak Cumulative Cashflow This is the maximum borrowing requirement 54 10 1 1 Interest Calculation Interest is calculated assuming the transaction occurs in the middle of the month Interest in the month Opening balance Cashflow in the month 2 x monthly interest rate 10 2 Development Cashflow Forecast Expand the Development Cashflow Forecast The cashflow has several columns Description This is a category description for each income cost Expand the category to see individual lines of data Spread The method used determines the profile of the I E Click the button to select a spread method and specify dates Spread profiles are described more fully in the next section Budget The total capital cost as defined by the user Balance to Forecast This is the Budget outstanding after a forecast h
52. n defines the restrictions placed on job roles Users are assigned to job roles so the permissions effectively define what he she can or cannot do The Reset button clears all the permissions in the table i e removes all controls Use with care There are 3 sections Administration Questions Project Appraisals Administration This area defines what the role is allowed to do from an administrative perspective Examples Changing another user s password creating projects unlocking other peoples appraisals You can also determine which roles can open the global property pages The options are Hidden the option is not visible R O Read Only changes will not be saved but the information will be viewable Questions This area allows the user to control which questions the user has access to All appraisal sections and questions are listed These can be made Hidden or Read only as defined above Alternatively permissions can be set when working in the appraisal Right mouse click to display the context menu and choose Permissions Project Appraisals This area defines what the role can do in the Project Tree The options are Hidden or Read only as defined above Use this area to prevent access modification to folders and appraisals Alternatively permissions can be set when selecting an item in the project tree Right mouse click to display the context menu and choose Permissions 90 10 0 Benchmarking and
53. nflation applies 3a Enter an inflation rate 4 Enter a milestone representing the end of the inflation period oe Inflation is added in whole years only Inflation can be added to scheme level costs and costs entered at a unit level 13 2 Inflating Revenue Income Expenditure Initial revenue allowances management maintenance etc are entered in Section A These can be inflated from the Base Year i e the point from which inflation applies up to the handover of the unit The inflation rate for this period is set at the start of Section G Inflate Allowances to Handover Inflation is added in whole years only In Section H inflation rates for I E in the long term cashflow can be set over multiple periods Rates must be set over the full 100 years term of the cashflow A valid rate can be 0 or negative I Start by setting a Base Inflation Rate This is the organisation s view of underlying long term inflation such as Retail Price Index RPI or Consumer Price Index CPI The organisation must adopt its own definition 2 Set a margin to be added to or deducted from the Base Inflation Rate for each of the income allowance categories varying the margin as necessary over multiple periods up to 100 years 2 The Effective Inflation Rate is the actual inflation rate used in the long term cashflow i e the Margin added to the Base Inflation Rate I E categories are shown separately 63 14 0 Section H Long Term Capital R
54. nter alias name A Click Ok to confirm changes 81 2 0 Curves Development Cashflow Forecast Spread Profiles Curves define how income expenditure can be automatically spread in the development cashflow forecast There are some system curves already set These are S curve a sine function Increasing Payments Decreasing Payments Equal Payments However you can also create your own curves Creating a user defined curve T 2 on Mh Bs Click Add Give the curve a name Move the left hand point up or down Move the right hand point up or down Left click anywhere in the grid to create a third point Move this third point to create a curve of your choice Click on point hold mouse button down and drag point Right mouse click on the third point to delete it Click Ok to confirm These curves will be available for use in the development cashflow 82 3 0 Organisations You can have multiple organisations Organisations are listed in the left hand tree Organisations can have multiple sites locations Adding an Organisation Ty Click Add Organisation a Complete details as prompted see also below Licence Editor If logged in as an administrator the button Show License Editor will allow you to enter a licence key as provided by SDS Add Site A site is location where the organisation operates such as a regional office A site can have users assigned to it enter the user first Logo S
55. o each unit column weighted by their loan requirement 12 3 Value Loan Ratios This report provides similar information as described above for each dwelling type Value Value can have several definitions In this section the current market value of the unit is repeated and it van also be amended here and the NPV of the Net Rent another definition of value The User Specified Value input allows the user to add a third definition of value as may be appropriate Ratios of value to loan by percentage are reported By entering a Target Value Loan ratio the affordable loan i e the loan that meets the target definition is reported The affordable loans are given for each of the various definitions of value as described above The rent yield is the net rent in the first year compared with the opening loan by percentage 62 13 0 Section G Inflation Inflation parameters are used mainly to govern the way income and expenditure I E increases in the long term cashflow after the unit has handed over Inflation can also be applied to all capital costs 13 1 Inflating Capital Costs Ts In Sections B the capital costs e g acquisition works fees can be inflated Inflation parameters are entered in the relevant section This is useful when historical costs need to be updated or when current costs need to be inflated to some future point 2 Enter the costs and an Inflation Base Year i e the point from which i
56. om the Unit Types Library 6 3 Duplicate an Existing Type 6 4 Delete a Unit Type 16 7 0 Section A Unit Details 7 1 Unit Attributes 7 1 1 Dwelling Description 7 1 2 Units 7 1 3 Floor Area 7 1 4 Product Type 7 2 Additional Attributes 7 2 1 Number of Bedrooms 7 2 2 Yes No Questions 7 2 3 Persons 7 2 4 Current Market Value 7 2 5 January 199 Value 7 2 6 Offset from First Handover 7 2 7 Handover Date 7 2 8 Adjust Area 7 2 9 Additional Floor Area 7 2 10 Habitable Rooms 7 2 11 Storeys 7 2 12 Supported Stay Period 7 2 13 Other Description 7 3 NPV Rates 7 3 1 NPV Discount Rate 7 3 2 NPV Discount Period 7 4 Sales amp Staircasing 7 5 Rent Allowances 7 5 1 Major Repairs 7 6 Rent 7 7 Units Summary 8 0 Section B Scheme Costs 8 1 Capital Costs Scheme Level Acquisition Works Other 8 2 Capital Costs Scheme Level Fees 8 2 1 Fees Analysis Table 8 3 Unit Capital Costs Scheme Level Acquisition Works Fees Other 17 9 0 10 0 11 0 12 0 13 0 14 0 15 0 16 0 17 0 18 0 19 0 20 0 21 0 Section C Subsidy Section D Development Cashflow 10 1 Read Only Information Reports 10 1 1 Interest Calculation 10 2 Development Cashflow Forecast 10 2 1 Spread Profiles 10 3 Handovers 10 4 Charts 10 5 Development Interest 10 6 Development Cashflow in ProVal LX Compared with ProVal XL Section E Total Scheme Cost Section F Private Finance 12 1 Loan Report 12 1 1 Loan Cross Subsidy 12 2
57. ons KW refers to Key Workers The Administrator can create other Product Types and also amend their descriptions 39 7 2 Additional Attributes These attributes provide further information about the unit They include O O O Number of Bedrooms Is Bedsit Persons Current Market Value January 1999 Value Offset from First Handover months Handover Date Is Flat Adjust Area by Additional Floor Area Is New Build Habitable Rooms Is Commercial Is Shared Storeys Is Extended Family Is Elderly Cat 2 Frail Supported Stay Period Other Description Inputs apply to all units in the column 40 7 2 1 Number of Bedrooms Enter the number 7 2 2 Yes No Questions Is Bedsit If it is a Bedsit enter 1 for No of Bedrooms and select the Y option Select the appropriate Y or N option for the following o Is Flat o Is New Build o Is Commercial o Is Shared o Is Extended Family o Is Elderly Cat 2 Frail These attributes will not affect the appraisal results They help describe the kind of unit being developed 7 2 0 Persons Enter the number of bed spaces persons 7 2 4 Current Market Value Enter the current value of the property as if available for sale purchase in the open market ignore the actual tenure for this purpose if different 7 2 5 January 1999 Value To display the target rent for a unit input the value of the property as if available for sale purchase in the open mar
58. ot include units Completed appraisals can be saved as a template but the units will be removed As many templates can be created as you wish but we recommend you keep these to a minimum in order to avoid too much work managing them and to reduce the possibility of confusion with users Inputs which are specific to a particular unit type e g the management allowance should be saved with the unit Some inputs can be stored in the template and or as a specific input with the unit E g A works cost could be stored in the template as a cost applicable to all units or with the 19 unit as a cost specific to a particular unit tyoe Where both options are used both costs will be added together In this way individual units might have different works costs but scheme wide sums could be included as extra works costs Sometimes it may be helpful to start a new appraisal from a previously created appraisal rather than starting from scratch using a template This is like editing an existing appraisal and saving it as a new version as you might with an Excel workbook This practice is not recommended To download detailed information about setting defaults see the Guidance on the SDS ProVal LS support page of the website Starting a New Appraisal from a Template ae Expand the Defaults folder in the project tree 2 Expand the Appraisal Templates folder 35 Right mouse click on a template name and select the option Create from template
59. ow Double click on a question to move to that section This window can be resized It is also possible to close it using the lt minimise gadget at the top right corner of the window Double click on the vertical bar to reveal it or select it from the View menu option in the SDS logo 4 2 Appraisal Window Across the top of the appraisal window are 2 sets of buttons 1 Undo and Redo buttons Ze Navigation Buttons 28 Undo and Redo Use these to step back or forward from the last event Navigation The Navigation buttons highlight which section of the appraisal has focus and can be used to move between sections Put the mouse over a button to see a description Beneath these buttons the appraisal itself will be displayed Tip Use a keyboard combination of lt Ctrl gt to fully collapse the currently selected section Use a keyboard combination of lt Ctrl Shift gt to collapse all sections 4 3 Bottom Window The height of this window can be resized It has a number of functions and facilities Formula Field Create a formula for your cell entry rather than entering a specific input value To use natural language references to other inputs or to read only outputs in the same appraisal use its cell reference name The remaining facilities and information in this window are displayed on 6 tabs Ls Help 2 User Comments ce Validation 4 Errors 5u Warnings 6 Support Help This displays guidance on what t
60. ption 1 Click the green button to add a row 2 Enter a percentage oe Define timing either by selecting a Milestone or a Month Number 4 Add more rows as necessary 5 Click Ok The button text will display By Percent Spreading Using the Manual Option 1 The row of the cashflow forecast will become editable om Enter sums as required in any month The button text will display Manual If the budget changes the forecast will need amending manually Spreading Using the Curve Option 1 Select a curve profile Additional user defined curves can be added as an Administrator function 56 2 Enter a From date This can be defined as a Milestone Month Number or Calendar Date ce Repeat for the To date 4 Click Ok The button text will display the chosen curve profile symbol 10 3 Handovers This row identifies when one or more unit types are handed over i e they are ready for occupation The total cost of the unit with the capitalised interest is transferred to the long term cashflow where a long term loan arises and the Cumulative Balance in the development cashflow reduces The handover date for each unit type is defined in Section A Unit Attributes Sales receipts will be shown in the long term cashflow The interest cost of the period between handover and sale will accrue in the long term cashflow Sales timings are shown in Sales amp Staircasing in Section A 10 4 Charts Click the SDS
61. ption from the list box o Net Works Costs the total works for the unit o User Input Sum a lump sum for this unit e g an alternative to the works cost o Input Value a on one of the above sums as chosen This can vary over the period of the long term cashflow up to 100 years o Defer to Start of Year delay the cost to a specified year number after handover Life Cycle Costings Select this option in the Unit Type box o Life Cycle Cost choose an archetype of unit life cycle costings these have to be predefined by default by the Administrator o Multiplier apply a multiplier to the costs e g 1 05 will uplift all costs by 5 7 6 Rent This section has the following sub sections o Cost Rent o Residential Rent o Service Charges o Commercial Rent o Ground Rent 46 Cost Rent The Cost Rent expresses the revenue costs allowances and loan cost incurred at handover which if charged as a rent would meet the revenue costs in Year 1 Service Costs and the Total Cost per week and per annum are displayed Also shown are the Handover Date and the Target Rent Rent Cap for social rent as at the Handover Date Note that a Jan 99 value in Section A is a required input for this tenure There are two input boxes to help set an intermediate or Affordable rent The first method is to enter an annual rent yield i e the annual rent divided by the Market Sales Value expressed as a percentage Alternatively the Market
62. r week is reported Gross rent per year per month and per week is reported as entered in Section A Rents Service Charges will be as set with the rent Alternatively enter a user defined service charge but note that this charge will not be shown in the long term cashflow This is helpful when you wish to assume that service costs and charges are neutral on the viability of an appraisal Total cost to the purchaser is shown per year per month and per week The Total Cost Earnings Ratio can be set as a Target a maximum not to be exceeded which defines what is affordable i e the total cost should not exceed the target percentage of the household income to be considered affordable Enter the estimated household income per year for the unit Enter the Mortgage Earnings Multiplier This will determine the mortgage that the householder can borrow based on their income after taking into account rent and service charges The following outputs are provided Minimum Earnings Required This is the minimum earnings that the purchaser will need in order to qualify for the mortgage Minimum Earnings Ratio This is the ratio of total cost divided by minimum earnings 72 Max Mortgage on Earnings This is the maximum mortgage based on the household income and the Mortgage Earnings Multiplier Affordable Equity Share using Multiplier The affordable equity share can be calculated from two positions a using the Mortga
63. re read only or hidden Cells with a pink background must have data entered Also marked with a triangular red field indicator when not completed Some cells have restricted input options select one from the drop down list Hover the mouse cursor over the input question text for further explanation Display the Help window at the foot of the appraisal for more information or hover the mouse over the input cell to display the Help text For answering questions requiring a Y N response select one of the two options Click ONCE into a cell and the whole of the cell contents will be highlighted Start typing to overwrite existing data or use the Delete key to remove it Avoid using the backspace key to remove data as blank spaces can easily be left Alternatively use the right mouse option and select Clear Using a keyboard combination of lt Ctrl Enter gt will fill the data in all columns to the right and left or use the right mouse option to display the context menu Select Copy Across to fill all columns left and right Copy and paste options will also be found in the context menu Use the tab button or mouse to move between inputs Some data is entered in two parts viz the Input Type per unit per person etc and Input Value These will be combined to give the total 26 3 1 Cell Editing Right mouse click to access these options o Clear delete the contents of the cell o Revert to Default Replace the value with the ori
64. rned on the whole scheme s consolidated long term loan will probably pay off quicker thereby making the scheme more viable Example 2 The cross subsidy attribute is turned on Assume three dwelling columns A B C are of a different product type e g affordable rent shared ownership social rent The individual loan repayment periods for these might be Year 30 25 and 38 respectively The Last Repaid Year as reported in the Appraisal Summary will be Year 29 i e the last repayment year of all units of all product types Other information in this report includes o Peak loan and year o Peak loan as a percentage of the maximum facility o Maximum loan market sales value percentage o Maximum loan cost A amp W only percentage o Grant total The parameters for the facility are defined in the Loans section at the start of the appraisal 61 12 2 Private Finance Requirement A loan adjustment and a capital contribution can be made on the product tab not on the total tab A loan adjustment is any adjustment to the loan which the user wishes to make for any reason A positive input reduces the loan A description field is provided when using this facility A Capital Contribution is similar to a loan adjustment Some users show internal subsidy here not recommend Normally internal subsidy is not shown as an input as it does not reduce the initial borrowing requirement The above adjustments are apportioned t
65. s Add a New Archetype Click Add T 2s 3s Give the archetype a Dwelling Type name and Net Floor Area Click the green button to add a new row of cost item for the archetype Set the following properties for this cost item Name description of the cost item Quantity the number of the cost item Unit units of measurement Current Rate the cost of the item per unit First Renewal the year that the cost first applies in the long term cashflow after the unit handover Cycle Years the frequency of recurrence after First Renewal Click Ok 87 7 0 Local Authorities A full list of local authorities is supplied with the application including those which have been superseded or amalgamated with others Edit ka Select the Local Authority LA as Click the Edit pencil shaped icon to amend the attributes of the LA 3 Click the icon again to confirm the changes Remove 1 Select the LA Bie Click the red cross button to remove the LA from the list ce Click Add Local Authority to add a new LA Add Ia Click Add Local Authority 2a A new row is added ce Enter the data as prompted The attributes are described below 4 Code The LA code used for administrative purposes Dis County its geographic location 6 Start Year the first financial year that this LA will be available In the appraisal the LA list will be filtered on the Funding Year Te End Year the year after which the LA wil
66. sal folder in the Project Tree 24 Right mouse click select Import on Select ProVal Excel Appraisal 4 In the ProVal Import Options window navigate to the location of the appraisal 5 Select the appraisal 6 Click the Import button Note that owing to methodology and other changes adopted in ProVal LS the results will not be strictly comparable Please refer to the document on the website to explain the differences 21 1 4 New Consolidation To create a consolidation T 2 Highlight an appraisal folder in the project tree Right mouse click and choose New Choose ProVal then Consolidation A new consolidation will be created note that it has a different icon Rename the consolidation appropriately Drag and drop appraisals from the project tree into the consolidation See further information about consolidations in this manual 22 2 0 Unit Type Defaults Nearly every input applicable to a unit can be preset as a unit type default rather than at the scheme level Store your standard unit types in the Unit Types folder which can be found in the Defaults folder Sub folders can be created to organise unit types into categories of your choice As with templates the extent to which inputs are preset is your choice Example Create folders named 2 Beds 3 beds etc Save units of different product types in an appropriately named folder Alternatively create folders named Affordable Rent Shared Ownership
67. screen to view customisable charts Step 26 Save amp Close The appraisal is saved as you go along ilies Click the close gadget on the tab of the appraisal at the top of the screen 2 Click Save Changes om Expand the Project Tree 4 Your appraisal will be found in the Unfiled folder De Here it can be renamed moved to another folder and opened for editing 6 Right mouse click and select the appropriate option Step 27 Close Application T4 2h Close any appraisals using the close gadget on the appraisal tab To close the application click the close gadget at the top right corner of the screen 15 User Manual Contents 1 0 2 0 3 0 4 0 5 0 6 0 Opening Appraisals 1 1 Starting a New Appraisal 1 1 1 Templates 1 1 2 Starting a New Appraisal from an Existing Appraisal 1 1 3 Starting a New Empty Appraisal 1 2 Open Existing Appraisal 1 3 Opening a ProVal XL Appraisal ProVal in Excel 1 4 New Consolidation Unit Type Defaults 2 1 Creating a Unit Type Default Entering Data 3 1 Cell Editing 3 2 Defaults 3 3 Comments Appraisal Windows Overview 4 1 Appraisal Summary Window 4 2 Appraisal Window 4 3 Bottom Window Appraisal Header 5 1 Basic Scheme Information 5 2 Loans 5 2 1 Loan Repayment Method amp Loan Terms 5 2 2 Covenant Settings 5 2 3 Interest Rate 5 3 Milestones 5 4 Site Address Adding amp Deleting Unit Types 6 1 Add New Unit Button 6 2 Importing fr
68. tal Value Capital Value of Scheme at Year 1 as above discounted by the NPV discount rate NPV of all Capital Receipts 65 The Net Present Value of all capital receipts typically sales and staircasing receipts IRR Internal Rate of Return The NPV discount rate which returns a zero NPV Total Set Aside Receipts The cash total of subsidy which has been set aside when a unit staircases Staircasing details are set in Section A Sales amp Staircasing Loan For a description of the loan repayment methods see Outputs in Section A Results give the peak loan and the year it occurs the breakeven and the repayment period See also the Loan report in Section F Private Finance Interest Total interest is given Interest Cover is defined in the appraisal as all income divided by interest Minimum interest cover is reported as a percentage and the year it occurs A Target Interest Cover is the user s desired requirement The year this is achieved after the Minimum Cover occurs is reported 15 2 Unit Results This section shows viability results and other outputs per unit It has the following sub sections o Unit Cost Current Market Value by percentage o Receipts Set Aside o Net Present Value o Internal Rate of Return o Loan o Cumulative Deficit 66 Cost Current Market Value by percentage The Cost Value comparisons are also shown in the Units Summary Section A and Total Scheme Cost Summary Section E
69. te Step 3 Appraisal Layout The appraisal is on the right hand side of the screen The centre window will display an Appraisal Summary for each product type and for the scheme as a whole As no units have yet been added product type summaries are not yet showing Navigation buttons are across the top of the screen A B C etc Use the gadgets to expand collapse the sections and to maximise screen area Use the scroll bars on the right to move up and down The inner scroll bar acts on the selected section the outer scroll bar moves the entire appraisal screen Step 4 Start Appraisal A template typically has a lot of data set by default but you can amend it as you go along ie Enter a scheme name of your choice 2 Enter or amend any other field in this section Step 5 Loans Each Product Type can have its own loan repayment method All units of a particular Product Type will have the same long term loan parameters 1 Expand Loans 2 Set a Loan Repayment Method There are 3 a Overdraft recommended This method repays the loan principal and interest as quickly as income allows If income exceeds loan interest then the loan balance will reduce but if income is less then the loan balance will increase b Annuity This repays the loan principal and interest by equal annual instalments rather like a repayment mortgage c Hybrid This is like the Overdraft method except the loan balance will not
70. tion at th bottom of the Inputs list 4 Edit the question text this is what the user will see in the appraisal Answer Type Choose from the list Unique Name One will be provided if you don t enter something Validation Formula Contact SDS for help to set this This controls whether the user s input in the appraisal will display a warning if the validation formula is broken Input validation is designed to highlight unusual data or mistakes Validation Message This is what the user will see in the Warnings window Total Formula Contact SDS for help with this Comments This is the text which will appear in a tool tip when the cursor is placed over the 85 question This text will also appear in the Help window of the appraisal along with the system help Help This text will appear in the tool tip when the cursor is placed over the input box in the appraisal and it will also be displayed in the Help window Options To restrict the user s input to a specific value s click Add at this position Click Add again to add more items in the list The list will be provided as a drop down list in the appraisal 86 6 0 Life Cycle Costs Define unit archetypes with appropriate Life Cycle Costs to represent the major repair costs in the long term cashflow Archetypes are matched with units in the appraisal Life Cycle Costs can be adjusted in the appraisal by applying a multiplier The tree lists the existing archetype
71. tone 6 Likewise sales timings are defined by setting an offset a period of months from its handover date So the First Sale and Last Sale milestones will be calculated from the first and last unit sale dates in the appraisal and do not have to be input as milestones Step 7 Add a Dwelling Type 1 Click on the navigation button A 2a Expand the Unit Attributes area 3 There are no units in this appraisal yet 4 You could add one manually by clicking the green button Add New Unit but we recommend that you use one of the demonstration units which have data set by default This is explained in the next step Step 8 Default Dwelling Types 1 Look back at the folder tree on the left hand side as Under the Defaults folder you will see a folder called Unit Types In here standard units are stored in a library These unit type defaults are grouped into folders typically referring to different product types 3 Expand the folders and you will find some demonstration unit types These demonstration types already have preset illustrative data Step 9 Insert New Dwelling Type 1 Put your cursor onto one of the unit types and holding down the left mouse button drag the unit into the appraisal area D Release the cursor and the unit will be added 3 Repeat for more unit types 4 Set the number of units for each type accordingly Di To create more screen area collapse the folder tree The Appraisal Summary window shows the
72. umber of storey in the block 42 7 2 12 Supported Stay Period Select one of 4 options from the drop down list Permanent Medium Short Very Short These descriptions can be defined as suits the organisation The stay period is the length of time that the tenant is expected to occupy the unit 7 2 13 Other Description This is any text which helps to describe the unit User defined questions can also be created by the Administrator 7 3 NPV Rates In this section enter the Net Present Value NPV discount rate and period The NPV rate and period can be varied to suit the risk profile of the unit type 7 3 1 NPV Discount Rate This is the rate at which future income expenditure will be discounted to present value as at a particular date e g the handover date of the unit or the date of first handover of all units 7 3 2 NPV Discount Period This is the period of years to calculate the NPV The NPV is actually calculated on a monthly basis i e income or expenditure is assumed to arise at monthly intervals 43 7 4 Sales amp Staircasing O Sales income is accounted for in the long term cashflow and reduces the loan balance This means that sales which occur some months after the handover do not affect the development interest Sales income is shown for information only in the development cashflow Ground rents as set in the Rents section can be capitalised and sold in the long term cashflow To capitalise the
73. window at the bottom of the appraisal Each unit type in the appraisal can have its own handover date This is set as an offset period months from the First Handover milestone The Practical Completion milestone cannot be edited It is defined as the last handover date of all units in the appraisal Similarly each unit type can have its own sales date This is set as an offset period months from the handover of the unit The First and Last Sale milestones cannot be edited They are defined as the first and last sale dates of all units in the appraisal First and Last Sale milestones are ignored when there is no unit being sold Milestones are defined by an offset from another milestone i e a number of months after or before a previous event Phased handovers and sales are handled within the appraisal by varying the unit handover date and unit sale date of each unit type Setting a date for a particular 34 dwelling type defines that event for all units of that dwelling type Examples a Start on Site SoS could be defined as LCL 3 This means that the Start on Site will begin 3 months after Legal Completion of the land contract b First Handover FH could be defined as SoS 12 This means that the First Handover will happen 12 months after the Start on Site Gs Assume the First Handover milestone is February Units in Column A can have their handover offset set 3 months after the First Handover These units wil
74. ybrid This is similar to the Overdraft method except the loan balance does not increase When the income is insufficient to repay the interest the loan balance remains the same and the difference is recorded and displayed as a Cashflow Deficit This deficit accumulates until income exceeds the interest at which point the deficit will be repaid and thereafter the loan balance will be repaid No interest is added to the deficit For each loan type set a loan interest rate This can be set at different rates over varying periods 32 5 2 2 Covenant Settings Each loan can have 3 optional covenant settings iz Maximum Facility 2 Maximum Loan Value 3 Maximum Loan Cost These do not affect the results Loan repayments and the loan balance is not restricted by these covenants but any breach is highlighted in the report at Section F Private Finance Maximum Facility This is the maximum amount of the loan facility Note that the loan balance can increase when using the Overdraft repayment method described above Maximum Loan Value This is the ratio by percentage of the loan balance and market sales value that you do not want to exceed E g 80 would mean that the loan should not exceed 80 of the market sales value Maximum Loan Cost This is the ratio by percentage of the loan balance and Total Scheme Cost that you do not want to exceed E g 80 would mean that the loan should not exceed 80 of the Total Scheme Cost 5

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