Discounted market sale
Valuation of land for affordable housing 2nd edition, April 2016, published by the Royal Institution of Chartered Surveyors (RICS) in 2016, defines discounted market sale (DMS) as: ‘An intermediate tenure product that sees the registered provider or developer offer the unit for sale to prospective purchasers (who meet specific affordability criteria) at a specified discount to the market value of the unit. This is typically around 80% of market value, with the purchaser buying the whole 80%. In order to ensure that these units are maintained as affordable into perpetuity, when the purchaser sells the unit on, it must be at 80% (or whatever the original percentage purchased was) of the current market value. The provision of DMS is driven by local policy, where a local authority may accept the provision of this product as part of the affordable housing obligation. Often covenants will be built into DMS leases to ensure that if the property is re-sold in the future the discount to market value is maintained into perpetuity.’
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