THE UNITE GROUP PLC Annual Report and Accounts 2024 178 FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS continued Fair value sensitivity analysis A decrease in net rental income or occupancy will result in a decrease in the fair value, whereas a decrease in the discount rate (yield) will result in an increase in fair value. There are inter-relationships between these rates as they are partially determined by market conditions. These two key sources of estimation uncertainty are considered to represent those most likely to have a material impact on the valuation of the Group’s investment property (owned and development) within the next 12 months as a result of reasonably possible changes in assumptions used. The potential effect of such reasonably possible changes has been assessed by the Group and is set out below: Fair value at 31 December 2024 +5% change in estimated net rental income -5% change in estimated net rental income +25 bps change in net initial yield -25 bps change in net initial yield Class of asset £m £m £m £m £m Rental properties London 1,286.7 1,338.5 1,208.5 1,204.4 1,350.7 Prime regional 1,314.2 1,369.1 1,236.8 1,240.7 1,372.0 Major regional 1,346.7 1,402.7 1,267.1 1,278.3 1,396.6 Provincial 100.7 105.9 95.6 98.0 103.8 Development properties London 269.5 281.7 257.6 256.8 284.0 Prime regional 157.7 166.3 150.6 150.3 167.5 Major regional 13.0 12.8 11.6 11.7 12.8 Build-to-rent London 69.8 71.6 64.8 64.7 72.1 Prime regional 11.2 11.8 10.6 10.6 11.9 Market value 4,569.5 4,760.4 4,303.2 4,315.5 4,771.4 3.2 Inventories Accounting policies Inventories are shown at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and selling expenses. All costs directly associated with the purchase of land, and all subsequent qualifying expenditure is capitalised. 2024 2023 £m £m Interests in land 13.5 25.3 Other stocks 0.1 0.9 Inventories 13.6 26.2 At 31 December 2024 and 31 December 2023 interests in land includes conditionally exchanged schemes.