Rating Manual section 6 part 3: valuation of all property classes

Section 1110: universities and university colleges

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

Memorandum of agreement 2017: universities and university colleges

Valuation for Non-Domestic Rating of Higher Education Institutions in England & Wales

This Memorandum for guidance on the method of valuation is derived from challenge settlements agreed under GPCR reference number: 30929882. This Memorandum has been drawn up with reference to current statute law and relevant case law.

1. Higher Education Institutions (HEIs)

1.1 Higher Education is normally understood to refer to courses of study which lead to degrees, diplomas, or similar advanced qualification of a higher standard than is available through “Further Education”. The term HEI includes Universities and Colleges of Higher Education whose Principals are represented by GuildHE.

1.2 It is confirmed that the acceptance of this Memorandum applies to all Universities and University Colleges, and to relevant Guild HE Colleges. It is, however, recognized that for application to Oxford and Cambridge Universities this Memorandum requires specific adaptation which is the subject of a separate rider, in accordance with Appendix 6. Valuation guidance for the Colleges of the Universities of Oxford and Cambridge is similarly provided by way of a Supplementary Memorandum of Agreement.

1.3 In the case of buildings which were designed and built as all or part of a College of Further Education and have not been significantly modified, regard should be had to the appropriate guidance for the valuation of such colleges.

2. Identification of Hereditaments

2.1 The normal approach should be applied to the identification of hereditaments and no attempt should be made to aggregate property which on normal rating principles constitutes more than one hereditament.

2.2 Identified hereditaments will be either wholly non-domestic, wholly domestic or composite in accordance with statutory provisions. Where a hereditament is composite, no value should be ascribed to the domestic use of property (including use for accommodating students and resident staff). It should not be assumed that such accommodation is absent, but rather that it forms the subject of a separate and contemporaneous lease held by the same occupier of the non-domestic part. Account should be taken of the presence or absence, and of the disposition of such domestic accommodation to the extent that the value of the non-domestic part is affected.

2.3 In the case of composite hereditaments, some facilities may be appurtenant to both the domestic and non-domestic accommodation. These facilities may include workshops, garden maintenance buildings, boiler houses, certain recreational and catering facilities and the like. They will contribute to the valuation by reference to the proportion of non-domestic to domestic accommodation.

2.4 Identified hereditaments should be placed in the following categories:

  • a) Category A Contractor’s Basis Hereditaments - All those hereditaments consisting of purpose-built and other adapted buildings occupied by an HEI and for which as a hereditament an HEI is the only possible hypothetical tenant because of “rebus sic stantibus” or planning restrictions. HEI centres, complexes and campuses will fall into this Category.

  • b) Category B HEI Living Accommodation - All Halls of Residence, hostels and other living accommodation. This will be regarded as domestic property, and will not be entered in Rating Lists, except to the extent that it should be considered to be non- domestic in accordance with Appendix 5.

  • c) Category C Miscellaneous Hereditaments - All other non-domestic or composite hereditaments occupied by HEIs where an alternative method of valuation is appropriate.

2.5 This categorisation should not affect the identification of hereditaments, and property should not be grouped into hereditaments comprising property of only one category unless this forms a natural unit of assessment in accordance with normal rating principles.

It follows that a hereditament in Category A or C may contain some property for which a different category will be appropriate; in such cases an overall judgement should be made as to the correct category for the hereditament as a whole. Where a hereditament is composite and therefore contains Category B property with either Category A or C, see paragraphs 4.1 and 6.0 below.

3. Basis of measurement

3.1 Cost information is derived from a Gross Internal Area (GIA) basis and referencing details should be compatible. The definition of GIA should be as provided in the “RICS Guidance Note Code of Measuring Practice” (6th Edition – effective from September 2007) and measurements should be taken in accordance therewith.

3.2 Link Walkways - Link blocks and subways which contain no areas which are used for any purpose other than for passage between adjoining blocks should be left out of the costing exercise. This omission is justified because their presence is dictated by the absence of a uniform design and denotes an attempt to reduce the drawbacks of dispersal which would not have arisen if the hereditament had been designed as an integral whole. Exceptionally the GIA of link blocks or subways should be included where they are original components of a unified design.

4. Valuation of category A hereditaments

4.1 Estimated Replacement Cost (ERC) - The ERC of all the buildings comprising the hereditament should be determined by reference to the unit costs for the relevant building use classifications set out in Appendix 1 Table 1 according to the use to which they are or would usually be put. Appendix 1 also contains, in Table 2, a detailed but not exhaustive list of uses falling within each of the particular classifications. Where a particular use is not specifically shown, or where a building is put to a variety of uses, valuers should use their judgement in deciding which classification to adopt. In coming to a conclusion on classification, predominant use will generally be a prime consideration but building construction style may also be relevant.

4.2 External Works - The cost of the site works/externals should be added in accordance with Table 3 set out in Appendix 1.

4.3 Unit building costs vary from place to place and the unit prices incorporated in Appendix 1 Table1 relate to a location factor of 1.00. These rates should be adjusted according to where the hereditament is located and the location factors in Appendix 2 Table 1 should be used.

4.4 Contract Size Adjustment - The aggregate of locationally adjusted building costs and external costs should be subject to contract size adjustment as set out in Appendix 1 Table 4. The allowance will be determined by the cost of the whole hereditament including that of domestic and exempt areas. The allowance is determined by the ERC adjusted by location factor and inclusive of external works addition but net of professional fees.

4.5 Professional Fees – An addition for professional fees should be made in accordance with Table 5 of Appendix 1.

4.6 Adjusted Replacement Cost (ARC) - Adjustments to the ERC of each building may be required to reflect disabilities relating to physical depreciation; functional obsolescence (including flat roof allowances and/or the adequacy of services such as lifts in multi-storey buildings); and/or technological obsolescence. The appropriate allowances to be made are a matter for the valuer to determine, but in general the scales and adjustments in Appendix 2 should be used.

4.7 Adjusted ARC - Any building which includes domestic or exempt property as defined in the Local Government Finance Act 1988 should have its ARC reduced in proportion to the relevant floor areas.

4.8 Site Value - The site of the hereditament will be separated into two elements:-

  • a) Developed parts - That part of the site comprising the HEI buildings together with their immediately adjacent grounds (for example circulation space, courtyards, attached gardens, etc.) shall be considered to be within its operational curtilage. It should be possible in nearly all cases for this operational curtilage to be ascertained without difficulty. Valuers should apply common sense in drawing this boundary. The precise area of this curtilage need not be determined, although it may be necessary for the ascertainment of the undeveloped areas (see next sub paragraph). The value of the operational curtilage land will be determined by taking a percentage of the total Adjusted ARC of the buildings. The relevant percentage will vary according to region and the various rates are shown in Appendix 4. The percentage represents the value of a site for HEI use. Using a percentage of Adjusted ARC enables relativities of site density to be properly reflected and will automatically apply any allowance which has been given to the buildings. It is not intended that there should be abrupt changes in the approach to site value between the regional groupings shown in Appendix 4, and shading of these percentages may be required close to their boundaries. It is not generally intended that shading should occur between the locational categories indicated for each region.

  • b) Undeveloped parts - The remainder of the hereditament’s site will be valued according to its use. Generally, undeveloped land will consist of the area of any playing fields together with any associated landscaping, but excluding the footprint of any associated buildings and specialised sports surfaces e.g. all-weather surfaces, tennis courts and open-air pools. Areas which are of no practical use (e.g. shelter belts and steeply sloping banks) should be ignored. Generally local levels of amenity value/sports field value will be appropriate as indicated in Appendix 4. For composite hereditaments, an adjustment may be required to the area of undeveloped land (excluding sports pitches) adopted in the valuation in order to reflect the mix of domestic and non-domestic usage by reference to the ratio of domestic and non-domestic GIA.

4.9 Effective Capital Value - The Adjusted ARC of the buildings is added to the site value to provide the effective capital value of the hereditament.

4.10 Decapitalisation Rate – The Adjusted ARC of the hereditament shall be decapitalised to an annual equivalent by taking 2.6% for England and 2.1% for Wales.

4.11 Holiday/Conference Letting within a Category A Hereditament - The valuation approach outlined above should be computed in accordance with Appendix 5.

4.12 End Allowances - Any advantages or disadvantages which might affect the value of the occupation of the hereditament as a whole should be reflected at this stage. An adjustment under this head should not duplicate adjustments made elsewhere, for example, in arriving at the developed site value by adopting a percentage of ARC rather than the ERC. Recognition has already been made in broad terms of any disadvantage caused by the land being encumbered by older buildings which may be larger than their modern substitute.

4.13 Allowances under this head may be considered for dispersal, bad site layout, piecemeal development, surplusage and any other relevant matters. In considering these points the presence or effects of any Category B buildings or let-outs should not be discounted.

5. Valuation of category B hereditaments

5.1 The valuation approach to the non-domestic use of living accommodation is set out in Appendix 5.

6. Valuation of category C hereditaments

6.1 This category should be valued by reference to direct rental evidence or by comparison with similar rented property. Where the planning situation is clear and the property is restricted to HEI use, a deduction may be appropriate from the unrestricted rental value. In such cases where planning consent for alternative use is less likely, there is greater probability that the Contractor’s Basis provides a better method of valuation and the hereditament may therefore fall within Category A.

6.2 A composite hereditament should have its Rateable Value adjusted to exclude the value attributable to the domestic use of property within it.

6.3 Category C hereditaments rarely contain property used for holiday/conference lettings; see Appendix 5.

7. Let-outs

7.1 Non-domestic premises which are let by the HEI in such a way as to require separate assessment should be assessed by the most appropriate method of valuation; this will normally be by reference to rental evidence. Where part of a Category A hereditament is so let out as to require a division of the original assessment, the ERC of the part remaining in the HEI’s occupation should be reduced by the proportion of the cost attributable to the let-out part, and the contractor’s basis valuation accordingly amended.

Appendix 1

Unit costs

Table 1a - Unit Costs exclusive of fees (principal buildings)

Building classification

Cost £/m2

Advanced science buildings

£4,056

Post graduate science and tiered auditoria

£2,678

Teaching science buildings

£2,005

Other academic buildings

£1,951

Office and administrative buildings

£1,317

Residential accommodation (En-suite)

£1,326

Residential accommodation (Non En-suite)

£1,144

Wet sports facilities - standard pool

£2,089

Wet sports facilities - 50m pool

£2,432

Dry sports facilities – with changing

£1,470

Dry sports facilities – without changing

£1,252

Table 1b - unit costs exclusive of fees (secondary buildings)

Building classification

Cost £/m2

Workshops and stores

£709

Multi-storey car parks

£670

Basic sports halls

£1,011

Tennis halls

£674

Table 1c - Unit Costs exclusive of fees (temporary buildings and huts)

Building classification

Cost £/m2

Temporary and portable buildings (less 12.5% if unheated)

£709

Greenhouses and simple hutted buildings

£218

Table 2 - building use classification

1a advanced science buildings

Buildings used for highly specialised scientific post graduate research in which one or more of the following attributes will be present across 30% or more of the building:-

  • containment level 3 or above
  • clean rooms
  • accommodation providing vibration free operation of scientific machinery, necessitating substantial foundations with or without isolation from the main structure

It is anticipated that this category will not apply to buildings constructed (or substantially rebuilt) before 2003.

Examples within University departments may include nanotechnology, epidemiology, medical research involving animals or pathogens, etc.

1b post graduate science and tiered auditoria

Those buildings containing, but not exclusively, research facilities which do not reach the high specification of Advanced Science, used primarily by post graduates, constructed since 2010.

In addition this category includes buildings of any age that mainly comprise tiered lecture theatres (and their ancillary accommodation), to include conference halls, drama blocks comprising a tiered auditorium and stand-alone tiered lecture theatres.

1c teaching science buildings

Broadly those buildings employed for the following academic uses, where the buildings comprise a material element of fitted and serviced laboratory space:

Pre-clinical and clinical medicine, dentistry, veterinary science, anatomy and physiology, pharmacology, pharmacy, other related medical studies, biochemistry, other biological studies, agriculture and forestry, chemistry, physics, other physical sciences, general engineering, chemical engineering, civil engineering, electrical and electronic engineering, mechanical, aero and production engineering, mineral engineering, metallurgy and materials, other technologies.

2a other academic buildings

All non-scientific academic buildings which do not fall into other categories.

2b office and administrative buildings

Broadly those buildings used for office and administrative purposes including accommodation converted from former residential uses.

3. Temporary and portable buildings

Broadly those buildings generally intended to have a relatively short life, (although they may have outlived original expectations), and those of inferior construction compared to standard building construction.

Where a temporary building is built to a standard superior to that which is normal for that type, consideration should be given to allocating it to group (2b).

4. Greenhouses and simple hutted structures

Those greenhouses used purely in connection with raising plants for ornamental purposes, without climate control (but maybe heated), and used neither for research nor public admission. Hutted structures within this category will be of the simplest type, used as stores and/or garages, and with no heating.

5. Workshops and stores

These will be more substantial structures than in group (4), typically with light steel frame; 100mm brickwork infill to 1.0m height; profile 6 corrugated sheet cladding above; translucent sheet glazing; electric power; water toilets; and central heating. Such buildings are likely to have been built after 1975. Older workshops may be constructed from different materials.

6. Sports buildings

These fall into six main categories

  1. i) wet facilities consisting of pools and surrounds, with associated plant rooms and changing
    1. ii) wet facilities consisting of 50m pools and surrounds, with associated plant rooms and changing
    2. iii) dry facilities consisting of halls with changing and associated plant rooms
    3. iv) dry facilities without changing
    4. v) basic sports halls – those buildings which are stand alone, comprising one basic hall with no, or minimal, changing facilities. Such a facility is unlikely to have been constructed in recent years
    5. vi) tennis halls

7. Minor buildings

Small buildings such as meter houses, sheds and stores with individual GIAs of less than 26 sq. m should not be costed, as they are reflected within the addition for external works.

Table 3 - external works addition

Classification

Description

Percentage addition

Restricted site

Town centre or island site, typically with 90% or greater building ratio, no more than a small yard or garden area, and either no car parking or a very limited number of spaces

2%

As above, but typically with an 80 to 90% building ratio, limited parking, external lighting and landscaping and some boundary fencing

2 ½ %

Intermediate site

Site typically 50 to 75% building ratio, some landscaping around buildings, secure boundary fencing, adequate parking and external lighting

5%

As above, but typically with 25 to 50% building ratio, landscaping around buildings, secure boundary fencing, external lighting, adequate car parking which falls short of full requirements

7.5%

 

Extensive site

Site typically with about 25% building ratio, landscaping around buildings, secure boundary fencing, external lighting and adequate parking for all staff and visitors.

12.5%

Notes

  1. An appropriate percentage addition should be chosen from the above table to reflect the extent of external works within the hereditament using plot ratio as an indicative guide only.

  2. The plot ratio is the building GIA (including domestic property within a composite hereditament) expressed as a percentage of the total developed area, including areas of surfaced car parks and roadways, but excluding areas of amenity land and unsurfaced sports pitches.

  3. For hereditaments that include items of site infrastructure that are explicitly costed (e.g. all weather pitches, flood lighting, multi-storey carparks, etc.…) care should be taken that the percentage adopted does not overstate the value of external works through duplication.

Table 4 - contract size adjustment

The adjustment for contract size should be made having regard to the total ERC (after adjustment for location but before the addition for fees) in accordance with the following scales:-

ERC £

Adjustment

Up to 0.25 million

+ 10% max

0.5 million

+ 8%

0.75 million

+6%

1.0 million

+4%

1.5 million

+2%

2.0 million

+1%

3.0 million

ZERO

4.0 million

-1%

5.0 million

-2%

7.0 million

-3%

10.0 million

-4%

15.0 million

-5%

18.0 million

-6%

20.0 million

-7%

25.0 million

-8%

35.0 million

-9%

Over 40.0 million

- 10.0% max

NB: Intermediate figures may be interpolated

Table 5 - professional fees

Fees should be added at the percentages shown in the VOA published Cost Guide at Section 7. For convenience these are as follows:

Contract size

% Addition

Sums up to £750,000

14.0 %

£750,000 to £1,500,000

13.0%

£1,500,000 to £4,000,000

11.5%

£4,000,000 to £7,500,000

10.5%

£7,500,000 to £15,000,000

9.5%

Over £15,000,000

9.0%

Appendix 2

Table 1 - location factors

N.B. The regions referred to are administrative areas and are not significant boundaries.

North East Region

 

Durham County

0.98

Northumberland

1.02

Tees Valley

1.01

Tyne and Wear

0.98

North West Region

 

Cheshire

0.91

Greater Manchester

0.91

Lancashire

0.91

Merseyside

0.91

Cumbria

0.91

Yorkshire and Humberside Region

East Riding and North Lincolnshire

0.91

North Yorkshire

0.97

South Yorkshire

0.93

West Yorkshire

0.91

South Western Region

Cornwall

1.03

Devon

1.01

Dorset

1.03

Gloucestershire

1.02

North Somerset

1.01

Somerset

1.00

Wiltshire

1.02

East Midlands Region

 

Derbyshire

1.06

Leicestershire and Rutland

1.04

Lincolnshire

1.05

Northamptonshire

1.10

Nottinghamshire

1.04

West Midlands Region

 

Herefordshire

0.91

Shropshire

0.93

Staffordshire

0.92

Warwickshire

0.96

West Midlands

0.94

Worcestershire

0.96

East of England Region

 

Bedfordshire

1.03

Cambridgeshire

0.99

Essex

1.04

Hertfordshire

1.07

Norfolk

0.96

Suffolk

0.98

South East Region (Excluding London)

Berkshire

1.12

Buckinghamshire

1.11

East Sussex

1.14

Hampshire

1.09

Isle of Wight

1.08

Kent

1.13

Oxfordshire

1.08

Surrey

1.17

West Sussex

1.12

 

Wales

 

North Wales

 

Flintshire

0.90

Conwy

0.94

Denbighshire

0.91

Gwynedd

0.98

Isle of Anglesey

0.96

Wrexham

0.93

Mid Wales

 

Carmarthenshire

0.98

Ceredigion

1.01

Powys

0.99

Pembrokeshire

0.93

South Wales

 

Blaenau Gwent

0.97

Bridgend

0.95

Caerphilly

0.95

Cardiff

0.96

Monmouthshire

1.01

Neath Port Talbot

0.90

Newport

0.96

Rhondda, Cynon, Taff

0.94

Merthyr Tydfil

0.95

Swansea

0.94

Torfaen

0.94

Vale of Glamorgan

0.98

Central London North

Camden

1.19

City of London

1.11

Hammersmith and Fulham

1.18

Islington

1.16

Kensington and Chelsea

1.23

Westminster

1.19

Central London South

Lambeth

1.17

Southwark

1.17

Wandsworth

1.19

Greater London North East

Hackney

1.15

Haringey

1.18

Newham

1.08

Tower Hamlets

1.15

Barking and Dagenham

1.06

Enfield

1.08

Havering

0.98

Redbridge

1.05

Waltham Forest

1.07

Greater London North West

Barnet

1.09

Brent

1.11

Ealing

1.16

Harrow

1.06

Hillingdon

1.07

Hounslow

1.06

Greater London South East

Bexley

    1.12

Bromley

1.09

Croydon

1.12

Greenwich

1.13

Lewisham

1.10

Greater London South West

Kingston Upon Thames

1.14

Merton

1.13

Richmond Upon Thames

1.12

Sutton

1.10

Appendix 3

Age and obsolescence allowance

1.0 The Age and Obsolescence allowances to be applied to the individual building blocks are dependent upon the nature of the building and its categorisation. The following three age –related scales are intended to provide a degree of uniformity of allowance for building groups that share common patterns of depreciation and obsolescence.

2.0 The choice of the appropriate scale follows the Building Use Classifications provided by Table 2 Appendix 1.

Scale 1 - Obsolescence Allowances (principal buildings)

2017

0.00%

1985

40.00%

2016

0.75%

1984

40.75%

2015

1.50%

1983

44.00%

2014

2.50%

1982

47.25%

2013

3.50%

1981

50.50%

2012

4.75%

1980

53.75%

2011

6.00%

1979

54.50%

2010

7.25%

1978

55.00%

2009

8.50%

1977

55.50%

2008

10.00%

1976

56.00%

2007

11.25%

1975

56.50%

2006

12.75%

1974

56.75%

2005

14.25%

1973

57.25%

2004

15.75%

1972

57.50%

2003

17.25%

1971

58.00%

2002

18.75%

1970

58.25%

2001

20.25%

1969

58.50%

2000

21.75%

1968

58.50%

1999

23.25%

1967

58.75%

1998

24.50%

1966

59.00%

1997

26.00%

1965

59.00%

1996

27.50%

1964

59.25%

1995

28.75%

1963

59.25%

1994

30.00%

1962

60.00%

1993

31.25%

1961

60.00%

1992

32.50%

1960

60.00%

1991

33.75%

1959

57.50%

1990

35.00%

1958

55.00%

1989

36.00%

1957

55.00%

1988

37.00%

1956

55.00%

1987

38.00%

1955 and earlier

55.00%

1986

39.00%

 

 

Scale 2 - Obsolescence Allowances (secondary buildings)

2017

0.0%

1981

31%

2016

0.5%

1980

32%

2015

1.0%

1979

33%

2014

1.5%

1978

34%

2013

2.0%

1977

35%

2012

2.5%

1976

36%

2011

3.0%

1975

37%

2010

3.5%

1974

38%

2009

4.0%

1973

39%

2008

4.5%

1972

40%

2007

5.0%

1971

41%

2006

6.0%

1970

42%

2005

7.0%

1969

43%

2004

8.0%

1968

44%

2003

9.0%

1967

45%

2002

10.0%

1966

46%

2001

11.0%

1965

47%

2000

12.0%

1964

48%

1999

13.0%

1963

49%

1998

14.0%

1962

50%

1997

15.0%

1961

50%

1996

16.0%

1960

50%

1995

17.0%

1959

50%

1994

18.0%

1958

50%

1993

19.0%

1957

50%

1992

20.0%

1956

50%

1991

21.0%

1955

50%

1990

22.0%

1954

50%

1989

23.0%

1953

50%

1988

24.0%

1952

50%

1987

25.0%

1951

50%

1986

26.0%

1950

50%

1985

27.0%

1949

50%

1984

28.0%

1948

50%

1983

29.0%

1947

50%

1982

30.0%

   1946 and earlier

50%

Scale 3 - Obsolescence Allowances (temporary buildings and huts)

2017

0.0%

1996

31.5%

2016

1.5%

1995

33.0%

2015

3.0%

1994

34.5%

2014

4.5%

1993

36.0%

2013

6.0%

1992

37.5%

2012

7.5%

1991

39.0%

2011

9.0%

1990

40.5%

2010

10.5%

1989

42.0%

2009

12.0%

1988

43.5%

2008

13.5%

1987

45.0%

2007

15.0%

1986

46.5%

2006

16.5%

1985

48.0%

2005

18.0%

1984

49.5%

2004

19.5%

1983

51.0%

2003

21.0%

1982

52.5%

2002

22.5%

1981

54.0%

2001

24.0%

1980

55.5%

2000

25.5%

1979

57.0%

1999

27.0%

1978

58.5%

1998

28.5%

1977

60.0%

1997

30.0%

Pre 1976

By Agreement

Notes:

  1. The above scales have been agreed to represent the combined age related physical depreciation along with functional obsolescence and technological redundancy exhibited by buildings of each age typical for their quality/specification and condition. It is anticipated that the stated allowances will be adopted in the majority of cases and only either moderated or increased in exceptional circumstances.

  2. Extensions are to be given an allowance appropriate to their age unless of a lower specification than would be expected of a building of that age in which case the allowance should be increased to a level appropriate to reflect the specification of the building as a whole.

  3. In respect of physical depreciation, the above scales are intended to reflect normal wear and tear and/or deterioration due to the age of the building. The scales assume an average degree of cyclical refurbishment work will have been undertaken, to include whole or partial renewal of building sub-components, most particularly relating to mechanical and electrical services and internal fit-out, but also including periodic renewal of roof coverings and windows.

  4. It follows from the above that no adjustment away from the scales is required in the majority of cases where older buildings have been subject to modernisation and refurbishment works, as these are explicitly assumed to have occurred. An exception to this would be for a building taken back to shell and reconstructed with significant renewal of structural elements, where an abatement of age-related physical obsolescence may be required.

  5. An example of a building requiring an abatement of the allowances provided by the scales (due to the mitigation of physical depreciation) would be where a major renovation has occurred utilising the original building foundations, frame (including upper floors) but with comprehensive replacement of the external envelope (walls, windows), a complete internal refit and wholescale replacement of mechanical and electrical services.

  6. Conversely, the above scales will be insufficient to reflect physical obsolescence in cases where buildings are substantially un-modernised and in any case, the scales do not apply in instances where the hereditament is not repairable at reasonable cost and where it falls to be valued rebus sic stantibus.

  7. To qualify as a substantially un-modernised building it is expected that the building will predominantly have the following:

  • Single glazed windows
  • original internal layout
  • original ceiling height, with no suspended ceilings
  • original external walls
  • pre 1980 internal finishes (flooring, ceiling and walls, internal doors and fixtures and fittings)

This is not intended to be applicable to prestige buildings that add character and esteem to the hereditament.

  1. In respect of functional and technological obsolescence, for buildings that remain in operational use, the scales include adjustments to reflect functional and technological deficiencies observable in buildings typical of their original period of construction but taking account of the level of assumed cyclical refurbishment reflected in the physical depreciation element of the scales.
  2. The type of functional and technological obsolescence factors already reflected in the scales include the following:
  • poor energy efficiency and/or environmental sustainability
  • inappropriate layout inhibiting flexible and efficient space utilization
  • modern health and safety, fire or building regulations that preclude or limit the original purposes of the building
  • dated design practices that restrict modern usage (such as lack of/or minimal floor and ceiling voids)
  • the absence of modern space heating or air conditioning systems within a building
  1. It follows that only where buildings display specific functional deficiencies or issues of technological redundancy, that are atypical for their age, the age-related allowances provided by the scales should be increased.
  2. One indicator that additional functional obsolescence is present such that the allowance provided by the scales should be adjusted is the presence of new and/or replacement facilities making the existing building surplus. Such replacement or other material redundancy should be considered and may result in the total redundancy of the pre-existing building, i.e. 100% obsolescence.
  3. If at the Antecedent Valuation Date, where there are buildings, or parts of buildings, that through an established pattern of use have been unused for a number of years the area of these buildings, or parts of buildings, is to be excluded from the GIA.

Multi-storey building allowances and flat roof adjustments

Table 1 - buildings with inadequte or no passanger lifts
Floors Percentage deduction
2 main floors Nil
3 main floors 5% overall
4 main floors or above 10% overall

Notes

  1. This allowance is intended to reflect the operational difficulties of housing a university in a multi-storey building. In particular, they reflect the problems of students moving between different storeys. Where the lower floors of a building are larger than the upper floors, the valuer will need to make a judgement as to the extent to which the extended parts of the lower floors should also benefit from the multi-storey allowance. This will depend on the use of the extension in the context of the use of the building. Where the use in the extension is related to the use in the building then it will be appropriate to apply the allowance to the extended part.

  2. It is recognised that lift provision is rarely ideal, and normal deficiencies (such as the inability to cope fully with peak time movements of students) in the operation of multi-storey buildings will be present. It is also recognised, however, that in some instances lift provision may be inadequate to cater for the number and size of floors served and in such circumstances the allowances in Table 1 should be applied.

  3. Buildings completed in 2005 and afterwards are assumed to have adequate lifts to comply with the Disability Discrimination Act and relevant Building Regulations. In the absence of evidence to the contrary, it is to be further assumed that pre-1980 buildings have inadequate or no lifts, but those completed between 1980 and 2005 have adequate lifts. In assessing the adequacy (or otherwise) of pre-2005 buildings each principal building should be considered separately and 2 lifts are to be considered adequate for a building up to an overall GIA of 6,000 m2, with an additional lift required for each additional 6,000 m2.

Table 2 – Buildings with flat roofs

Buildings with a flat roof are to receive an allowance as follows:

a. £80/m2 reduction applied to the footprint of the flat roof for buildings constructed up to and including 2004.

b. £60/m2 reduction applied to the footprint of the flat roof for buildings constructed after 2004.

Where a building has varying roof types a reasonable apportionment should be made to arrive at the adjustment.

Appendix 4

Site values

Table 1 - developed land

Region

Developed land

North East

4.25%

North West

9.00%

Yorkshire and Humberside

7.75%

South West

9.75%

East Midlands

4.25%

West Midlands

7.50%

East of England

14.25%

South East (excluding London)

13.50%

Cardiff

16.25%

South Wales (excluding Cardiff)

8.25%

Mid and North Wales

6.00%

Central London North

43.50%

Central London South

26.25%

Greater London NE

15.00%

Greater London NW

15.25%

Greater London SE

19.50%

Greater London SW

25.50%

Table 2 - undeveloped land

Undeveloped land should be valued by reference to prevailing amenity land values in the locality.

Notes:

  1. For Central and Greater London regional definitions refer to Appendix 2 Table 1.

  2. Where a HEI hereditament is sited within or contiguous to a NHS hospital site (other than in Central London regions) reference should be made to the relevant %ARC addition provided by the appropriate guidance for the valuation of NHS sites.

  3. For rurally located specialised university facilities such as observatories, field stations and certain sports facilities it would be appropriate to value the developed land by reference to prevailing amenity land values in the locality.

Appendix 5

Valuation of Category B Hereditaments

1. Hereditaments wholly used for domestic purposes

1.1 Hereditaments which are wholly used for domestic purposes do not need to be valued for rating purposes.

2. Hereditaments wholly or mainly used for holiday and/or conference letting

2.1 When such property is used in whole or part for the provision of holiday or conference accommodation for short periods (or a succession of short periods) to persons not associated with the HEI, it must be valued, since property so used may be non-domestic. When Category B hereditaments have to be valued for such use their value should be found in accordance with the paragraphs below.

2.2 Where the holiday/conference use/short course use is of self-catering accommodation which is available for letting for periods totaling less than 140 days in the preceding year, it will be regarded as domestic property (s. 66 (2B) LGFA 1988). In all other circumstances property used for these purposes should be valued on the following basis:

  1. a) Where more than 500 bednights are notified, the following relevant prices per bednight should be applied to the number of additional bednights notified.

Accommodation

England (price per bednight)

Wales (price per bednight)

Non En-Suite Accommodation

£2.57

£2.08

En-Suite Accommodation

£2.99

£2.41

  1. b) Appropriate allowances (if any) should be made by reference to the scales and adjustments provided in Appendix 3.
  1. c) Where the living accommodation remains in assessment for the whole year, whether as a separate hereditament or as part of a larger hereditament (whether or not a composite), no further adjustment is needed and the result of steps (a) and (b) produces the appropriate RV. However where the hereditament containing the living accommodation falls to be entered in the Rating List only for the duration of the holiday/conference/short course use, the following formula:

(Number of bednights notified / Number of days used) x 365

should be applied to the relevant bednight prices, in order to produce the appropriate RV to be entered only for the duration of the holiday/conference/short course use.

2.3 For the purpose of this appendix short courses should be regarded as courses taking place within vacations or for durations not exceeding 100 days for persons who have main residences elsewhere.

Appendix 6

Oxford and Cambridge Universities

1. Introduction

1.0 The provisions of other parts of the Memorandum apply to the Universities of Oxford and Cambridge, subject to the adaptations in this appendix.

1.1 For the valuation of the Colleges of the Universities of Oxford and Cambridge please refer to the Supplementary Memorandum of Agreement.

2. Unit Costs, External Works, Professional Fees and Building Use Classification

2.0 In place of the Unit Costs in Table 1a of Appendix 1, the following costs apply.

Table 1 - Oxbridge unit costs

Building classification

Cost £/m2

Advanced science buildings

£4,056

Post graduate science and tiered auditoria

£2,909

Teaching science buildings

£2,005

Superior academic buildings

£2,436

Standard academic buildings

£1,951

Office and administrative buildings

£1,317

Museum and ceremonial – principal accommodation

£5,152

Museum and ceremonial – secondary and functional accommodation

£2,479

Museum and ceremonial – below ground storage

£1,489

Residential accommodation (En-suite)

£1,326

Residential accommodation (Non En-suite)

£1,144

Wet sports facilities - standard pool

£2,089

Wet sports facilities - 50m pool

£2,432

Dry sports facilities – with changing

£1,470

Dry sports facilities – without changing

£1,252

Notes:

  1. Advanced Science, Post Graduate Science/ Tiered Auditoria, Teaching Science Buildings as defined in Table 2 of Appendix 1.

  2. For all Other Academic Accommodation (as defined in Table 2 of Appendix 1, but excluding those libraries which fall into the Museums and Ceremonial Category below).

  • a) Superior – this rate should be applied to the superior standard of accommodation of this type that is typically present in Oxford and Cambridge Universities.

  • b) Standard – where the accommodation is manifestly similar in construction to that of other HEIs covered in the main memorandum and costed as “Other Academic Buildings” then this rate should be used.

  1. Museums and Ceremonial Buildings (i.e. buildings used in connection with University ceremonies and/or of particular historical or architectural importance to the University).
  • c) Principal Accommodation available to the public and/or members of the University.
  • d) Secondary galleries and functional accommodation primarily available for use by members of the department.
  • e) Below Ground Storage

2.2 The cost of external works should be added in accordance with Table 3 of Appendix 1.

3.0 Location factor

3.1 The Location Factor for Oxfordshire and Cambridgeshire should be applied to the respective universities in line with the treatment for other HEIs.

4.0 Site values

4.1 In place of the Developed Land %ARC additions provided in Appendix 4, the following capital values shall be ascribed to Developed Land in accordance with Table 2.

Table 2 - Oxbridge developed land additions

Site values zone

Capital Values per Ha in Oxford

Capital Values per Ha in Cambridge

Central

£9,900,000

£10,800,000

Intermediate and Edge

£2,060,000

£3,076,000

Notes - Oxbridge developed land additions

  • i) The ‘Central’ zone site value is intended to be applied to University buildings which by virtue of their historic importance and function could not be located away from the central core of the cities. This is primarily intended to apply to the Museum and Ceremonial Buildings categories only.

  • ii) The overall average allowance applied to the buildings by way of obsolescence allowances and multi-storey allowances should be applied to the developed land values produced by the above table.

  • iii) Care should be taken, particularly in the case of intermediate and outer sites to identify only the amount of land actually required for the developed buildings.

  • iv) It is intended that this approach to valuation of developed land at Oxford & Cambridge Universities should produce site values broadly consistent with those indicated by the percentage of ARC approach adopted in the main Memorandum for other HEI’s in the two cities concerned.

  • v) In place of the Developed Land %ARC additions provided in Appendix 4, the following capital values shall be ascribed to Developed Land in accordance with Table 2

4.2 Any undeveloped land should be valued in accordance with rates provided in Appendix 4 of the main memorandum.

5.0 End allowance

5.1 The application of an end allowance should be considered in accordance with the principles set out in paragraphs 4.12 to 4.13.

2017 Supplementary Memorandum of Agreement for the Colleges of Oxford and Cambridge Universities

Valuation for Rating of the Colleges of the Universities of Oxford and Cambridge.

This supplementary Memorandum on the method of valuation of the Oxford and Cambridge Colleges has been accepted by the Chief Executive of the Valuation Office Agency, the Estates Bursars’ Committee of Oxford and the Bursars’ Committee of Cambridge. It is derived from challenge settlements agreed under GPCR reference number: 30929882.

1. Introduction

1.1 The Oxford and Cambridge colleges are to be valued in accordance with the principles as set out in the Memorandum of Agreement in respect of the Higher Education Institutions in England and Wales subject to the following adaptations.

1.2 This brief Memorandum sets out the matters which need to be dealt with to reflect the particular characteristics of the building construction and accommodation provided by the Colleges.

2. Identification of Non-Domestic Use Within the Hereditament

2.1 Care should be taken not to ascribe any value to domestic use of property within each College.

2.2 The non-domestic use within a College will arise from those parts which normally include administrative and academic space, e.g., offices, lecture theatres, seminar rooms, senior common rooms, libraries, etc. but it will exclude those parts providing living accommodation (including middle and junior common rooms) for resident members of the College, that is Fellows, Postgraduates, Undergraduates and resident staff.

2.3 Some facilities, although part of the living accommodation of members of the College, are nevertheless used by non-resident members or staff. These facilities normally include dining halls, kitchens, Porters lodges and chapels. They will contribute to the valuation according to usage by non-residents.

2.4 In addition, some facilities will be appurtenant to both the domestic and non- domestic accommodation. These facilities may include workshops, garden maintenance buildings, sports facilities, music practice rooms and the like. Again, they will contribute to the valuation according to usage by non-residents.

2.5 The non-domestic use within a College may also include the use of facilities described in paragraph 2.3 and 2.4 above for conferences and certain functions.

2.6 Dining halls and kitchens described in paragraph 2.3 above shall be valued thus. The number of non-resident members divided by the total number of both resident and non-resident members of the College is first expressed as a decimal. This is then reduced by applying a factor of 0.54 to allow for the greater propensity of resident members to use these parts of the College than non-resident members. The resultant figure, expressed as percentage, reflects the non-domestic use of these facilities, and this proportion is to be included in the valuation.

2.7 Where Colleges make accommodation available for holiday/conference use and/or for external functions, the following proportions of the full kitchen and dining hall value will be treated as attributable to non-domestic use and included in the valuation of the hereditament, additional to any proportion included in paragraph 2.6:

  • Holiday/conference: 10%
  • External function: 2%

2.8 Chapels which are certified as places of religious worship, will be entitled to exemption where there is sufficient external invitation to public religious worship. Value to be attributable to non-domestic use shall be taken to be the full value multiplied by the proportion of non-resident members at the Antecedent Valuation Date subject to subsequent material changes of circumstances.

3. Building costs

3.1 Building cost rates per square metre have been derived from a gross internal area (GIA) basis. The following costs are to apply to Oxford and Cambridge College buildings, on a GIA basis, as defined in the RICS/ISVA Code of Measuring Practice (Sixth Edition):

Table 1 – Unit Costs exclusive of professional fees

Standard (residential, supervision rms admin, common rooms Etc)

Distinguished halls, auditoria and libraries

Other halls, auditoria and libraries

Kitchens

Distinguished chapels

Other chapels

Hutted and portable buildings, less 12.5% if unheated

£1,951

£3,540

£2,611

£2,461

£3,735

£2,354

£709

3.2 For properties lacking architectural distinction and without particular historic or architectural importance the undistinguished building costs will apply.

3.3 Hutted and portable buildings will be valued in line with the principal Memorandum.

3.4 The ERC of all domestic residential accommodation is to be valued as ‘Standard’ accommodation in accordance with Table 1.

3.5 These rates take into account the general high quality of building construction of the Colleges.

3.6 The cost of site works/externals should be added in accordance with Table 3 Appendix 1 of the principle Memorandum.

  3.7 Fees should be added at the percentages shown in the VOA published Cost Guide at Section 7. This 4% addition for complexity is applicable and for convenience these are as follows:

Table 2 - professional fees

Contract Size

% Addition

Sums up to £750,000

  16.0%

£750,000 to £1,500,000

15.0%%

£1,500,000 to £4,000,000

13.5%

£4,000,000 to £7,500,000

12.5%

£7,500,000 to £15,000,000

11.5%

Over £15,000,000

11.0%

3.8 An adjustment for contract size should be made having regard to the total ERC (after adjustment for location but before the addition for fees) in accordance with the scales set out at Table 4 of Appendix 1 of the principal Memorandum. The allowance will be determined by the cost of the whole hereditament including that of domestic and exempt areas, after the addition for external works.

4.0 Location

4.1 The Location Factor for Oxfordshire and Cambridgeshire should be applied to the respective university colleges in line with the treatment for other HEIs.

5.0 Allowances

5.1 Obsolescence Allowances are to be applied in accordance with Scales 1 to 3 in Appendix 3 of the principal practice note, subject to paragraph 5.2 below.

5.2 Multi-storey Building allowances should be made according to the principal practice note at Appendix 3, Table 1.

6.0 Site value

6.1 The developed part of the College will be taken as that which lies within the curtilage of the College not to exceed the amount required for normal College building proportions, as provided below, and excluding private gardens (including Master’, Wardens’, Principals’) which are to be regarded as domestic. The developed part of the College will be distinguished from that part providing amenity and playing field areas. Where a College occupies a developed site in excess of a basic density, the element of excess will be calculated having regard to a benchmark of 10,625 square metres per hectare for the Central Area and 8,500 square metres per hectare for the Outer Area. Where the proportion is less, the excess site will be taken as amenity land (for calculation take actual Gross Internal Area divided by 10,625 or 8,500 to give hectare requirement).

6.2 The remainder of the site will be treated as amenity land or playing fields.

6.3 The derived developed site areas will be apportioned in accordance with the non- domestic usage of the College buildings, by reference to GIA.

6.4 The land values to apply are:

Table 6 - site values

Oxford (All Zones)

£2,060,000 per hectare

Cambridge (All Zones)

£3, 076,000 per hectare

6.5 The overall average allowance applied to the non-domestic elements of the College as valued, by way of age-related build cost adjustment, obsolescence allowances and multi- storey deductions, should be applied to the developed land. For the avoidance of doubt this is calculated only on the non-domestic elements and domestic accommodation is ignored.

6.6 The Amenity Land Values should be valued by reference to prevailing amenity land values in the locality

7.0 Decapitalisation rate

7.1 This is to be applied in accordance with the principal practice note.

8.0 Bednights

8.1 The bednight addition for holiday/conference use, where living accommodation is used for periods by persons not associated with the College, is to be applied as set out in the principal practice note.

8.2 The appropriate allowances (age, obsolescence and multi-storey) relevant to the bednight accommodation should be deducted from this addition.

9.0 End allowance

9.1 The application of an end allowance should be considered in accordance with the principles set out in the principal practice note.

R2010: Practice note 1

A Memorandum of Agreement reached between the VOA and both Universities UK and GuildHE has replaced the original practice note prepared for this class for the 2010 revaluation.

R2010: Practice note 2

A Memorandum of Agreement reached between the VOA and both Universities UK and GuildHE has replaced the original Practice Note prepared for the Colleges of the Universities of Oxford and Cambridge for the 2010 Revaluation.