How Residual works

The method

One engine runs every appraisal as a monthly cash flow of up to 240 months, in three modes: viability assessment, residual land value and affordable housing valuation. Identical inputs always return an identical result.

The method follows the Homes England Development Appraisal Tool User Manual v4.1. Residual is independent and is not affiliated with or endorsed by Homes England.

How it differs from the DAT spreadsheet

On five points the DAT spreadsheet (v4.02) differs from Residual. Each is a convention, not an error.

• Gross area. Residual uses net × (1 + p). The DAT uses net ÷ (1 − p).
• Fee base. Residual charges fees and contingency on build cost. The DAT also charges fees on car parking.
• Interest. Residual charges r ÷ 12 a month. The DAT uses (1 + r)^(1/12) − 1.
• Rent year. Residual takes 52 weeks. The DAT takes 52.18.
• Months. Residual counts calendar months. The DAT counts 30.5-day months.

Optional settings reproduce the first three. They are off unless chosen, and reports say when one is on.

The assumption library

Every assumption shows its source, the date it applies from and a confidence tier. The library is small and holds no build costs: you enter your own.

What it doesn't do

• Scottish and Welsh land taxes. Stamp duty uses England and Northern Ireland rates.
• Build costs. You enter them.
• CIL for most authorities. You enter the rate.
• First Homes as a tenure.
• A benchmark land value. You can enter one; Residual doesn't derive it.
• A separate build rate for each tenure within a built form.

The full method note, with the library table, is available on request: hello@residual.space.