Competing viability appraisals at appeal

When two viability appraisals of the same scheme reach opposite conclusions at appeal, the inspector does not split the difference. They decide which inputs to accept, one by one, and the appraisal follows arithmetically from those findings. A viability appeal is therefore won or lost on a handful of contested figures, usually benchmark land value, build costs, sales values and the developer return, rather than on the model itself.

Appraisals diverge because almost every input is a judgement dressed as a number. Understanding which of those judgements the inspector can actually test is what separates an appeal that narrows the issues from one that produces two documents talking past each other.

Where appraisals actually diverge

Start with benchmark land value. Planning Practice Guidance sets out the existing use value plus a premium approach, and the premium is the single most argued figure in English planning. An appellant with a high land price paid in a different policy environment has to explain why the market evidence supports it, because the guidance is clear that the price paid is not in itself a reason to reduce policy requirements.

Build costs come next. Both sides usually work from published cost data, and divergence comes from the adjustments: abnormals, external works, contingency, professional fees and inflation allowances.

Sales values and rents follow, and they turn on comparable evidence and on assumptions about the product. Then finance costs, sales rates and the programme, which compound in a discounted cash flow.

Last is the developer return. The guidance indicates a return of 15 to 20 per cent of gross development value may be a suitable return for developers of market housing, with a lower figure for the affordable element reflecting the reduced risk. Arguments about where in that band a scheme sits are common and usually resolvable.

Narrowing the inputs before the hearing

The most useful work happens before the inquiry or hearing opens. A statement of common ground on viability should isolate the inputs actually in dispute and record agreement on everything else.

Agree the model itself first. If one side runs a residual appraisal and the other a discounted cash flow, agree which is being used and that both parties can run the other side's inputs through it. An agreed model turns the dispute into a set of discrete factual questions.

Then agree the uncontested inputs line by line: floor areas, unit mix, the affordable housing tenure assumptions, planning obligation costs, CIL liability where it applies, and the programme. Highway works are worth pinning down early, because whether they are delivered as section 278 works or a section 106 contribution changes both the cost and its timing in the cash flow. Record the disputed inputs with each party's figure and the reason for it.

A well drafted statement of common ground also identifies what would change if a disputed input moved, which is the sensitivity analysis the inspector will want anyway.

The district valuer's role

Local planning authorities frequently instruct the Valuation Office Agency's district valuer service to review an applicant's appraisal, and that review often becomes the authority's evidence at appeal.

Treat it as expert evidence rather than as the authority's advocacy. District valuer reviews tend to accept the appellant's model and dispute specific inputs, which is helpful, because it narrows the argument. They also tend to be conservative on benchmark land value and on abnormals that are not supported by a quantified cost plan.

The practical response is to put the supporting evidence in front of the reviewer early. An abnormal cost that appears as a line item with no drawing, no quotation and no site investigation behind it will be discounted, and arguing about it at the inquiry will not recover it.

Transparency and commercially confidential material

Planning Practice Guidance expects viability assessments to be prepared on the basis that they will be made publicly available, with only limited exceptions, and to be presented in a standard, accessible format with an executive summary.

That expectation shapes appeal practice. An appellant who seeks to withhold material has to justify it, and an inspector deciding an appeal on evidence the objectors cannot see is in an uncomfortable position.

Where commercially sensitive material does exist, such as a live contract price, the usual approach is to redact the specific figure, explain the redaction, and provide the underlying analysis in a form that can be tested. Blanket confidentiality claims over an entire appraisal tend to reduce the weight the evidence carries.

How inspectors handle irreconcilable inputs

Where the parties cannot agree, the inspector makes findings. Three patterns recur.

First, the inspector picks the better evidenced figure rather than an average. An input supported by transactional comparables, a measured cost plan or a site investigation beats an input supported by professional opinion alone.

Second, the inspector may accept a range and test whether the scheme's conclusion holds across it. If the scheme is unviable at both ends of the range, the precise figure does not matter.

Third, where the evidence is thin on both sides, the burden falls on the party making the case for departure from policy. An appellant seeking a reduction in policy compliant affordable housing has to prove it, and an unproven case fails.

Review mechanisms are often the pragmatic answer. An early stage or late stage review secured by a section 106 obligation lets permission be granted on a reduced provision now, with a recalculation later if values improve. Inspectors use them frequently, and the drafting of the trigger and the formula matters more than the headline percentage. How the resulting provision is then split is a separate negotiation, set out in the note on affordable housing tenure split.

Costs risk on viability appeals

Appeal costs can be awarded where a party has behaved unreasonably and that behaviour has caused wasted expense.

On viability appeals, the behaviours that attract applications are familiar: producing an appraisal late so the other side cannot test it, refusing to disclose the basis of a figure, abandoning an input at the hearing that has been maintained in writing, and running an argument that has no evidential support at all.

Authorities face the same risk in reverse. An authority that rejects an appraisal without obtaining its own assessment, or that maintains a policy requirement it cannot justify on the evidence, is exposed.

The defence is the same on both sides. Disclose early, evidence every input, and concede the ones you cannot support before the hearing rather than during it.

Preparing an appraisal that survives scrutiny

A Viability Assessment that holds up under cross examination shares certain features. Every input has a stated source and a date. Abnormal costs are supported by a cost plan and by the survey work that identified them. Land value is justified by reference to existing use value and comparable transactions, with the premium reasoned rather than asserted. Sensitivity analysis is run and presented, not hidden. And the executive summary states the conclusion in plain terms.

The RICS professional statement on financial viability in planning sets the conduct and reporting expectations for members, including independence and the treatment of instructions. An appraisal prepared by someone acting under that statement carries more weight than one that reads as advocacy.

One honest caveat: viability evidence ages quickly. An appraisal built on values and costs from 18 months ago will be attacked on that basis alone, and updating it shortly before the hearing is usually worth the fee.

Pull the disputed inputs into a single table, with each side's figure and the evidence behind it, and work out which three actually decide the outcome. Most viability appeals come down to three.

This is general guidance, not legal advice. Viability evidence is specialist work and professional review is strongly advised. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.