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Planning Viability Assessment

The Government states that viability should be primarily at the plan making stage. In relation to planning applications the expectation is that development proposals should meet the requirements of the local plan, that has been viability tested, and it is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. It is up to the Local Planning Authority to decide how much weight to give to a viability assessment.  

If a viability assessment is submitted it should follow the standardised approach set out in the Planning Practice Guidance (PPG)  and required by the National Planning Policy Framework (NPPF) (paragraphs 34 and 57).

The standardised approach is Existing Use Value plus a premium (benchmark land value) compared with the residual land value to determine viability. Under no circumstance will price paid for land be a relevant consideration.

Planning practice Guidance (PPG) states:

  • Para. 6 - Developers should have regard to the total cost of the relevant planning policies when buying land.
  • Para.8 - the viability assessment should refer back to the information that supported the Local Plan making and explain the differences.
  • Para. 10 states that any viability assessment should be supported by appropriate evidence and that the viability assessment should be proportionate, simple, transparent and publicly available.
  • Para. 13 states that the benchmark land value should primarily be based on Existing Use Value (EUV) plus a premium (EUV+).  The premium for the landowner should reflect the minimum return at which it is considered a reasonable landowner would be willing to sell their land.
  • Para. 14 expands upon this to say that the EUV should reflect the implications of abnormal costs, infrastructure, professional fees and market evidence can inform existing use values.
  • Para. 15 states that the EUV is the value of the land in its existing use without hope value.
  • Para. 16 advises that the premium to be applied to the EUV should be a reasonable incentive to the land owner to bring forward the development whilst allowing for policy compliance.

In addition, all submissions will be expected to comply with the RICS Financial Viability in Planning: Conduct and Reporting May 2019.

Following submission the viability assessment will be assessed by our independent assessors at the applicant’s cost.

As required by the NPPF and PPG, all planning viability assessments will be published alongside other information supporting the application and the Council’s consultant's assessment of the viability appraisal. In the rare circumstance where the applicant has made the case that “the public interest in maintaining the exemption outweighs the public interest in disclosing the information.” (paragraph 10 of Schedule 12 to the 1972 Act) the specific section would not be published but a version of the assessment where this information is aggregated would be required for publication.

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