Dev App Good Q Flashcards
What impact will the Town and Country Planning Use Classes Amendments 2020 have?
This will enable repurposing of buildings on high streets and town centres. The new Class E allows for a mix of uses to reflect changing retail requirements. It will allow a building to be used flexibly by having a number of uses taking place concurrently or at different times of the day.
What are the proposed changes to permitted development rights?
In August and September 2020 several changes were made, introducing new permitted development rights and changes to use classes through The Town and Country Planning (General Permitted Development) (England) (Amendment). Class G permits shops or financial services to change into mixed use with up to 3 residential units (previously 2). Class MA allows greater scope for converting retail and professional units to residential. Part 20 permits new flats on buildings in Classes ZA, A, AA, AB, AC, AD.
What key market conditions would you highlight when providing Development Appraisal advice to a client?
Rising interest rates and inflation are key. These result in higher borrowing costs, reducing returns. Falling demand for office space post-COVID may lead to lower rental income and reduced GDV. Specialist lenders are pulling back, withdrawing competitive rates. High inflation and demand for labor keep build costs elevated, reducing developer returns.
What is the difference between a residual valuation and a development appraisal?
. Development appraisals account for time (phasing) and use client inputs, whereas residual valuations rely on market inputs. Development appraisals focus on profit, while residual valuation determines land value.
What is the residual method?
The residual method recognizes that a scheme’s value is a function of many elements. It assesses return and residual site value by inputting pre-determined returns. If planning obligations lower returns, land will not be released for development, making the method critical for decision-making.
When is a development appraisal useful?
To establish affordable housing levels, assess planning obligation contributions, review land uses, or advise a potential site purchaser before acquisition.
What are the key stages of the residual method?
Establish the potential for development, assess completed scheme value, calculate development costs (including profit and finance costs), and deduct costs from the completed value to estimate land value.
What is a sensitivity analysis?
Sensitivity analysis involves recalculating the appraisal with changed inputs (e.g., higher build costs or lower GDV) to see how this affects profit and residual land value.
How would you calculate the sum of money available to purchase the land?
The sum of money available for land purchase is the completed development value (GDV) minus all development process costs, including profit.
What are the key components of a site acquisition strategy?
Identify new sites, research population mix, adjoining uses, planning consent, and undertake development appraisal analysis. Negotiate with the landowner, and either acquire or take an option to purchase.
What are the main inputs required to complete a development appraisal using the Residual Valuation method?
Key inputs include completed development value (GDV), construction costs, site acquisition fees, finance costs, land costs, and developer profit. Deduct costs from GDV to arrive at the residual value.
What are some of the disadvantages of the Residual Valuation Method?
Inflexibility with precise timing, hiding uncertainty in single estimates. Small changes in variables can greatly impact residual value.
How much would it cost to build an office, industrial and retail building?
Office: £2,500/m2-£5,000/m2. Retail Warehouse: £1,100/m2-£3,500/m2. Industrial: £1,100/m2-£2,500/m2. Retail Shop: £3,500/m2-£7,500/m2. All vary based on specification and location.
What key market conditions would you highlight when providing Development Appraisal advice to a client?
Rising interest rates and inflation lead to higher borrowing costs, reducing returns. Demand for office space is down post-COVID, lowering rental income and GDV. High inflation keeps build costs elevated.
What are the key stages of a typical development programme?
Pre-construction (site identification, financial modeling, viability, acquisition, design, financing, planning, contractor selection). Construction (enabling works, substructure, superstructure). Post-construction (handover, tenant identification).
