1. Generic Questions

Question 1

What is the RICS Professional Standard relating to development appraisal?

Answer 1

RICS Professional Standard: Valuation of devleopment property, 2019

Question 2

Describe RICS Professional Standard: Valuation of devleopment property, 2019

Answer 2

• A financial appraisal of a development
• It is normally used to calculate either residual site value or the residual development profit
  It can also be used to calculate other inputs

Question 3

What factors can you calculate profit on?

Answer 3

• Cost
• GDV

Question 4

What is the difference between profit on cost and profit on GDV?

Answer 4

Profit on cost is more accurate as the calculation of GDV is more subjective.

In addition, accurate construction costs may have been provided by the client.

Question 5

What is the RICS PRofessional Standing surrounding financial viability?

Answer 5

Financial Viability in planning: conduct and reporting, 2019

Question 6

IS VAT Payable on all professional fees?

Answer 6

Yes

Question 7

What is overage?

Answer 7

Also known as claw back.

Arrangement for the sharing exrtra of ectra receipts raised over the profits origninally expected.

Question 8

What is a profit erosion period?

Answer 8

Relates to the length of time it will take for the development profit to be eroded by holding charges follwing the completion of the scheme.

Due to interest changes and the scheme is loss making.