Viability assessment competence and RICS standards

A viability assessment submitted with a planning application is a valuation exercise, and national guidance expects it to be prepared by someone competent to value. In practice that means a chartered surveyor holding RICS Registered Valuer status, working to the Red Book valuation standards and to the RICS guidance on assessing viability in planning. An appraisal produced by a developer's in-house spreadsheet will be read, and then it will be reviewed by someone who does hold that status, at the applicant's cost.

The competence question matters more here than in most technical disciplines, because the output is contested by definition. Every input is an opinion that reduces or increases what the scheme contributes.

What national guidance expects

The Planning Practice Guidance on viability sets the frame. Viability should primarily be tested at plan making stage, so that applicants and authorities work to a known policy position, and assessments at application stage should be the exception rather than the norm.

Where an assessment is submitted, the guidance expects standardised inputs, a benchmark land value established on the existing use value plus a premium basis, and a developer return that reflects risk. The guidance indicates a return in the region of 15 to 20 per cent of gross development value as a suitable return to developers in many circumstances, with a lower figure for the affordable housing element.

It also expects transparency. Assessments should be made publicly available in full, with redaction the rare exception rather than the default. An applicant unwilling to publish the appraisal is in a weak position before the analysis has even been read.

Registered valuer status and what it signals

The RICS Registered Valuer scheme applies monitoring and compliance requirements to members carrying out valuations under the Red Book. For planning work, the practical signals are membership grade, registration, relevant local market experience and a declared basis of valuation.

Independence is the part applicants underestimate. The RICS material on viability in planning is explicit that the assessor owes a duty of objectivity even when instructed and paid by one side, and that the appraisal should reach the same answer whoever commissioned it. An assessment written to a required conclusion tends to reveal itself through the inputs rather than through the conclusion.

Ask three things before appointing. Whether the valuer is registered and what their recent planning viability work covers. Whether they have acted for authorities as well as applicants, which usually improves the quality of the argument. And whether they will sign the assessment personally, since an unsigned corporate document is harder to test and easier to dismiss. The professional directory is one route to a reviewer who can check an appraisal before it goes in.

The inputs that carry the argument

Four inputs decide most viability cases, and each needs evidence rather than assertion.

• Gross development value, supported by comparable evidence for the specific unit types and location rather than a blanket rate per square metre.
• Build costs, benchmarked against a recognised cost source and adjusted for the specifics of the scheme, with abnormals itemised and evidenced.
• Benchmark land value, derived from existing use value plus a premium, with the premium reasoned rather than assumed.
• Finance, professional fees, marketing and contingency, each at a rate the market would recognise.

Abnormal costs are where reviews most often bite. A claimed abnormal for contamination remediation needs the site investigation behind it, and a claimed abnormal for a basement needs a design that requires one. Items that appear in the appraisal but not in the drawings are removed by the reviewer.

The other recurring issue is the price actually paid for the site. National guidance is clear that the price paid is not the benchmark land value: a purchaser who overpaid on an assumption about policy cannot pass that decision to the authority as a reason to reduce affordable housing.

An illustrative example of how quickly this moves: a scheme with a claimed abnormal for piling across the whole footprint, where the geotechnical report recommended piling to part of the site only. The reviewer allowed the evidenced part and removed the rest, and the affordable housing offer moved by several units on that single line.

Benchmark land value and its evidence

Existing use value plus a premium sounds simple until you apply it. Existing use value needs the current lawful use, the current condition, and evidence of what that produces. The premium has to be enough to persuade a reasonable landowner to sell, judged against policy requirements rather than against the best offer the landowner has received.

Market evidence of land transactions is useful only where the policy requirements applying to those transactions are known. A comparable sale of a site that was later granted permission with no affordable housing tells you very little about a policy-compliant benchmark.

Where a site was bought with an overage or a conditional contract, say so. Reviewers ask, and a structure that emerges late undermines everything else in the appraisal.

Review consultants and how the process runs

Most authorities instruct an independent review, and most require the applicant to pay for it. The reviewer works through the inputs, produces their own appraisal, and reports where the two diverge.

Sensible practice is to anticipate that review. Provide the appraisal in an open format with formulae visible, include the assumptions schedule, and set out the sensitivity analysis showing how the conclusion moves with changes in value and cost. A submission that arrives as a locked summary invites a longer and more sceptical review.

Where the gap between the two appraisals is narrow, negotiation follows, usually about the affordable tenure mix or a review mechanism. Where it is wide, the issue is nearly always benchmark land value or an unevidenced abnormal.

Challenging an assessment you disagree with

Objectors, parish councils and members ask how to test an appraisal they think is wrong. Four practical steps.

1. Ask for the full assessment, since guidance expects publication rather than summaries.
2. Check the benchmark land value reasoning and whether the price paid has crept in as the benchmark.
3. Compare the build cost allowance against a recognised published cost source for the building type and location.
4. Look for a review mechanism: where viability is marginal at the date of permission, a late stage review can capture improved values later.

A review mechanism is often the practical answer to a disputed appraisal. It converts an argument about a forecast into a calculation done when the outcome is known.

The competence point runs through all of this in the same way it does in technical disciplines, where the question is who ran the model and against what standard, as in wind microclimate assessment and who runs the model. For the valuation side specifically, RICS registered valuers and viability assessments in planning covers the registration position in more detail.

PlanScope drafts a Viability Assessment structured to the sections authorities expect, with every figure flagged as a fact to be supplied by your valuer rather than generated. Councils expect a suitably qualified author for this report type and professional review is strongly advised. Browse the full list of report types to see what else a major application needs. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.

This is general guidance, not legal advice. Check the current Planning Practice Guidance and RICS standards, or take advice from a qualified valuer, before relying on it.