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CHAPTER 3 OF 5 · THE NUMBERS
CHAPTER 3 · INCOME GROWTH OVER TIME

Target income today. Indexed income tomorrow.

How target income could grow over 25 years as the rent is indexed at . Two inflation scenarios, because indexation follows CPI and can move up or down.

CPI averages 3% (income +4% a year) CPI averages 1% (income +2% a year) Years 1, 5, 10, 15, 20, 25
£39,188 £24,590 £15,288
YEAR 15101520YEAR 25
YEAR 1 TARGET£15,28812% Target Net Rent Yield on £127,400
YEAR 25 · CPI 3%£39,188About £19,278 in today's money
YEAR 25 · CPI 1%£24,590Still about 1% a year ahead of inflation
CUMULATIVE TARGET INCOMEYear 8Passes the £127,400 purchase price under either scenario
In both scenarios the target rent stays about 1% a year ahead of inflation — that is the purpose of CPI + 1%. It protects the real value of the income; it is not a promise that income will rise every year.

Illustrative only. Year n income = Year 1 target × (1 + CPI + 1%)^(n−1), assuming a constant average CPI, rounded to the nearest pound. "Today's money" deflates by 3% a year. Actual indexation follows CPI each year and can be lower, or negative. Income depends on , eligibility, funding rules and operational performance. Not a forecast.

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