t!HAP. I.

VALUATION OF PROPEHTY.
1097
But there niny be a fiiril.er expo^iiliture for siir\ey'>rs' charges, solicitors' cliar^ts for
transferring the projierty, and loss of capital by selling out of the funds, wliicli it may
!>e
often necessary to deduct from that amount. A matter also of consideration is wlietlKT
the building is in a good state of repair, both in structure and decoration, as ready for a
tenant.
Wlien the property is hasehold, then, as soon as the clear income has been ascertained, it
will have to be multiplied hy the n\imher of years' purchase at the rate of interest required
for the term (Fourth 'JVilile), to find tlie amount that the property is worth. The number
of years' purchase pi o\ ides for tlie percentage and to get back the ]irincipal, tlie annual
instalments of which must be invested at the same rate of interest to produce tlie total sum
at the end of the term (in lieu of the rebuilding fund in the freehold property). Among
Imvood's Tallies, 16th ediiion, 1855, is one
(p.
177"), whereby to calculate
"
tlie present
value of an income fur a ceitain number of years, wliicli is to pay duiing its continuance a
given rate of interest on the purchase-money, and to replace the purchase-money at the end
of the same number of years at a rate of interest to be selected.
'
F'roin the former method of expressing the valuation, it would appear that a purchaser
may realise 8 per cent, upon his outlay
;
and so indeed he may, for a few years, if" every-
thing connected with the property be very favourable
;
but the latter calculation shows
exactly wluit may be expected, namely, that on capitalising a fiirther sum to form a sinking
fund for certain repayments, then
.'> jier cent, per annum may be appropriated as income,
the remainder of the rent being set aside to supply a fund to meet exigencies of no uncom-
mon occurrence. The rial value of the property, moreover, is found to be much less than
What tlie rough calculation would show it to be worth.
I'lie deductions for losses dejiend entirely upon the class of house. First class houses
in good situations let so readily to responsible tenants, who for their own comlbrt and
display maintain the fabric, that the sums to be deducted for the occasional want of occu-
jiants and expenses of reletting are reduced to a minimum. On the other hand, a much
lower class of house, together with the present unsatisfaetorj' mode of letting houses on
three years' agreements, and the still more ineligible arrangement by the year, throw so
much larger amounts for repairs, decorations, and change of tenancy, upon the landlord,
that the total of the sums to be deducted is raised to a very high estimate. Herein the
best judgment of the valuator is called into requisition, and it requires the knowledge ob-
tained by the practical architect to assist his judgment in such matters.
After tlie actual value has been ascertained, another item for consideration is the additional
sum that a purchaser will be induced to give for some reasonsuch as the property being in
a fashionable neighbourhood; the house possessing arrangements peculiarly suited to his
wishes, and so on : this amount may be called a
"
fancy price," and when paid had better
be considered as money sunk.
For making rough calculations, according to the first instance, the value of freehold
land in the country is generally considered worth from 30 to SS years' purchase, being cal-
culated on the 3 per cent, tables. In a few very exceptional cases as much as 40 years'
jjurchase has been given
;
but the difference constituted a
'
fancy price." F'or town plots
from 25 to 30 years' is more usual. Freehold houses and buildings, 1st and 2nd class, fiom
18 to 20 years' purchase, or 5 per cent.; 3rd and 4th cluss, about 16 years' purcha.se. or 6
per cent.
for Leasehold properly :

1st and 2nd class, from 15 to 16 years' purchase or 6 per cent,

2nd and 3rd

14 to 15 ,, 7
3rd and 4th 12 to 13

8
4th and 5th 11 to 12

9
5th and 6th 10

10
Freehold Ground-rents are valuable in proportion to the extent to which they are
covered by the rack-rent and by the period of reversion. A good ground-rent ought to
be six times covered, that is, five parts are brick and mortar rent, and one part ground-
rent. A reversion, however, unless williin forty years, is not much taken into account.
Some ground-rents in the City of London (where the ground-rent is larger in proportion)
bare sold for Sl^- years' purchase ;
those only covered by three times the rack rent, sold
for 25 years' purchase. Leasehold and freehold giound-rents can only be valued according
to locality, circumstances, length of holding, &c. Unsecured ground-rents are usually
valued at 25 years' purchase, but those well-secured at from 30 to 33 years' purchase.
Jniproved ground-rents are not worth so much as the freehold ground-rent, in consequence
of the covenants of sujierior leases, danger of breaches of covenants, &c.
In the valuation of leases held on lives, the operation, after bringing the rent to a clear
annuity, is conducted by means of the sixth, seventh, and eighth tables, given hereafter, as
the case may require.
In the valuation of warehouses, the only safe inethod of coming at the value of a rentl