viability a-z

Question 1

Term

Answer 1

Definition

Question 2

Abnormal costs

Answer 2

Costs associated with abnormal site conditions such as contamination, flood risk, or listed buildings.

Question 3

Affordable housing

Answer 3

Housing for sale or rent for those whose needs are not met by the market, as defined by the NPPF.

Question 4

Alternative use value (AUV)

Answer 4

Value of land for alternative uses that comply with up-to-date development plan policies.

Question 5

Area-wide assessment

Answer 5

See Viability in plan making.

Question 6

Assessor

Answer 6

A surveyor or qualified practitioner instructed to undertake financial viability assessments.

Question 7

Benchmark land value (BLV)

Answer 7

Value established from the EUV plus a premium or from the AUV (where premium is already included).

Question 8

Comparable transaction evidence

Answer 8

Transaction evidence used to support the valuation of another property, adjusted for plan policies.

Question 9

Construction cost

Answer 9

Costs of base construction from project start to completion, as referred to in PPG paragraph 012.

Question 10

Cost projection or change

Answer 10

Projections of growth or decline in development costs as part of a financial viability assessment.

Question 11

Date of valuation

Answer 11

The date on which a planning authority or Secretary of State resolves to grant or refuse an application.

Question 12

Decision-taker

Answer 12

The body, usually the LPA, responsible for making planning decisions based on evidence.

Question 13

Deliverable

Answer 13

Sites available now with a realistic prospect of housing being delivered within five years.

Question 14

Development appraisal

Answer 14

A financial appraisal to calculate residual site value, development profit, or other outputs.

Question 15

Development contributions

Answer 15

Contributions expected from development, often secured through s.106 obligations or CIL.

Question 16

Development cost

Answer 16

Total cost of undertaking development, excluding developer profit and land costs.

Question 17

Development/developer profit/return

Answer 17

Profit exceeding total outlay on a project, typically assumed at 15-20% of GDV for plan-making.

Question 18

Development plan

Answer 18

A local or neighbourhood plan detailing policies for an area’s future development.

Question 19

Development risk

Answer 19

Risks associated with site assembly, planning, construction, and post-construction processes.

Question 20

Emerging policies/plan policies

Answer 20

Policies in emerging plans going through the statutory procedure.

Question 21

Existing use value (EUV)

Answer 21

Value of land in its current use, excluding hope value, as advised in PPG paragraph 015.

Question 22

Financial viability assessment (FVA)

Answer 22

Assessment of a development’s viability, determining if the value generated exceeds costs.

Question 23

Gross development value (GDV)

Answer 23

Aggregate market value of a development as if complete on the date of valuation.

Question 24

Hope value

Answer 24

Value exceeding EUV based on future development potential.

Question 25

Infrastructure

Answer 25

Infrastructure secured through s.106 obligations or CIL, including roads, schools, and medical facilities.

Question 26

Minimum return

Answer 26

The premium above EUV that incentivizes landowners to sell while complying with policy requirements.

Question 27

Planning obligation

Answer 27

A legal obligation entered into to mitigate the impact of a development proposal.

Question 28

Planning purposes

Answer 28

A financial viability assessment for planning purposes as per the NPPF and PPG guidelines.

Question 29

Plan policy-compliant

Answer 29

A development that fully complies with up-to-date plan policies.

Question 30

Premium

Answer 30

The minimum return landowners expect as an incentive to sell their land for development.

Question 31

Return on cost/value

Answer 31

The ratio of profit to costs or value of a completed development, assumed at 15-20% of GDV.

Question 32

Scheme typology

Answer 32

Development schemes with similar characteristics such as use, location, or value.

Question 33

Site-specific assessment

Answer 33

Viability assessment of a specific development site or project.

Question 34

Site typology

Answer 34

Sites with similar characteristics, such as land use, location, or brownfield/greenfield classification.

Question 35

Standardised inputs

Answer 35

Appropriate inputs underpinning valuations, as outlined in PPG paragraphs 010-019.

Question 36

Value change or projection

Answer 36

Projections of growth or decline in the capital or rental value of a project.

Question 37

Viability in plan making

Answer 37

Assessing viability during plan-making to ensure value exceeds development costs.

Question 38

Viability in decision taking

Answer 38

Assessing viability at the decision-taking stage to ensure value exceeds development costs.