Development Appraisals Flashcards
What are the inputs for a development appraisal?
Property areas, no of units or dwellings, property type, build costs, value, duration of build, purchasers costs, site costs, any additional build costs, fees, loan facilities, developers profit, sale costs
what are the benefits of using bespoke development software for sensitivity analysis and project viability?
Efficiency
Accuracy
integration
enhanced decision making
How does the UK planning system work?
The National planning policy framework sets out government policies and how they are expected to be applied. Provides the framework for local plans.
Guided at national level, administered at local level.
What is the Town and Country Planning Act 1990?
Primary legislation governing land use.
its sets out:
Development control: regulating planning applications
local plans: require local planning authorities to prepare development plans
Planning enforcement: addressing unauthorised development
Appeals and legal processes.
What is the minimum affordable housing requitement for new developments in the UK?
Down to the local authority however typically 10% of the development.
What is community infrastructure levy (CIL) ?
A charge local authorities can impose on new development to help fund infrastructure.
What is nutrient neutrality and why has it caused problems in Norfolk?
Its a planning requirement that ensure that new development doesn’t caused nutrient pollution in protected water bodies.
What is the RICS Valuation of development property 1st Edition (PS)?
A professional standard aimed at guiding the valuer in the approach to development property valuations.
Should be read in conjunction with the latest Red Book standards incorporating the definition within IVS 410
It covers the:
development valuation process
establishing the facts
assessing the development appraisal
the market approach
residual approach
land in the course of development
report the valuation
Talk us through your valuation at the land at Hempton, Fakenham?
A parcel of land near Fakenham extending to 4.5 acres
Sought planning advice
carried out Desk top due diligence on planning, etc
conducted a development appraisal for sale purposes.
Talk us through your valuation at the land at 14-16 Lower Goat Lane?
14-16 Lower Goat Lane is a three storey commercial property in central Norwich, I carried out a development appraisal of the upper floors in preparation for a sale.
I looked at potential development for the upper floors after becoming vacant, I believed there was enough space for 5 flats.
I considered development costs to be higher because of its location.
determining that a development wasn’t viable.
What advise did you give your client of Courtenay House Tittleshall?
I carried out a development appraisal on the special assumption that outline planning for a number of 4/5 dwellings had been approved.
I advised them on the optimal number of units and appropriate specification to maximise value.
I also recommended a listing price and marketing strategy.
What advise did you give your client of Nunns Way, Dereham?
The was a feasibility study.
The client had obtained planning for 19 apartment and ground floor retail units.
I advised the client that the development in it current configuration was not viable.
I then advised to increase the number of residential units units, attempt to reduce build costs and remove the commercial units entirely.
Once these steps had taken place, it resembled a viable development.
What are the relevant documents relating to Development appraisals both published by the RICS and by the government?
RICS Valuation of development property 1st Edition (PS)
RICS Financial viability in planning: conduct and reporting 1st edition, May 2019
The National Planning Policy Framework 2012
Town and Country Planning Act 1990
What is the RICS Financial viability in planning: conduct and reporting 1st edition, May 2019
Professional Standard
This professional standard sets out mandatory requirements that inform the practitioner on what must be included within financial viability assessments and how the process must be conducted.
What is a development appraisal?
A tool to assess the financial viability of a development project.
What is a residual value?
The amount remaining once the gross development costs of a project is deducted from its gross development value.
what is an overage?
An overage is a provision or condition in a property sale where the seller retains the right to receive additional payments if the buyer later benefits from an increase in the property value.
what is sensitivity analysis?
how key variables such as build costs or GDV can impact profit or viability.
What are permitted development rights?
Allows certain building works and changes of use without full planning permission.
Examples include:
Class MA - Commercial Class E to Residential C3
Class ZA - demolition and rebuild of commercial buildings
Class Q - Agricultural to residential.
