17 Valuation Tables · 17.1 Valuation tables

17.1.4 Years' purchase: single rate, dual rate and in perpetuity

Years' Purchase (YP) is the multiplier that turns a net annual income into a capital value — capital value = net income × YP — and it is worked out as 1/i in perpetuity, 1/(i + s) on a single rate and 1/(R + s) on a dual rate for a fixed term.

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Key terms

  • years' purchase
  • YP
  • capitalisation
  • single rate
  • dual rate
  • perpetuity 100/i
  • remunerative rate
  • accumulative rate
  • 1/(i+s)
  • 1/(R+s)
  • leasehold
  • tax-adjusted YP
  • YP for life
  • capital value = net income x YP

What this note covers

  1. Core factsFoundation
  2. ExplainedStandard
  3. DeeperAdvanced
  4. Mains writingMains writing
  5. Common trapsFoundation
  6. Quick revisionFoundation

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