Scottish Social Housing Tender Price Index description

Calculation: project indices

The index is based on analysing the costs in accepted tenders or agreed prices for housing projects. The index represents the relationship between the agreed price and consistent modelled base prices.

Modelled base prices

BCIS has developed base cost models for a range of dwellings covering:

• Housing type: detached, semi-detached and terraced houses
• Flat block size by numbers of flats
• Number of storeys
• Number of bedrooms
• Number of occupants
• Size – gross internal floor area of house or flat

BCIS has also produced a range of adjustment factors for common alternative specifications.

The models and adjustments make allowance for current building regulations, standards and typical specifications but are at fixed base date.

Calculating a raw project index

For each project the index is calculated by comparing the cost of the superstructure in the accepted tender or agreed price with a modelled cost for the same mix of houses and flats from the models adjusted for any specification differences between the base models and the project.

Calculating location and project size factors

From the project index BCIS has calculated a time series, location factors (showing the variation in pricing levels by region) and size of contract factors (showing variation in pricing levels by value of contract).  The location and size factors are calculated over rolling 15 quarters.

Calculating a normalised project index

Each project index is adjusted for location and size to give a normalised index. This is advantageous as there is not a stratified sample in each quarter. It allows for the situation where one quarter may have more projects in an expensive region than the following quarter. The location factors are generally those at level 2 (see location table) unless sample size dictates the use of level 1 factors.