Viability assessments: who may prepare and who reviews

A viability assessment author review is decided by two appointments, and applicants usually pay proper attention to only one of them. The person preparing the assessment needs to be a valuer, working to the professional valuation standards, with the registration that goes with that. The person the authority appoints to review it will be a valuer too, often the public sector valuation service or an independent consultant, and the review will test judgement rather than arithmetic. A spreadsheet produced by a development manager will be taken apart in a fortnight.

The reason is simple. And almost every number that matters in a viability appraisal is a valuation opinion: benchmark land value, gross development value, sales rates, yields, finance cost, the return the scheme needs. Arithmetic is the easy part.

Why the work needs a valuer rather than an appraiser

Development appraisal and valuation overlap but they are not the same discipline. An appraisal models a scheme's cash flow. A valuation forms an opinion of value to a defined basis, with a defined date, on defined assumptions, and carries professional responsibility for that opinion.

Planning viability sits in the second category, because the local planning authority is being asked to accept reduced policy compliance on the basis of valuation judgements. The guidance on viability expects assessments to be prepared on standardised inputs and to be transparent, and the professional statement that governs this work for chartered valuers requires objectivity and impartiality even where the valuer is instructed by the applicant.

In practice the markers to look for are chartered status with the relevant institution, registration under the valuer registration scheme, demonstrable development valuation experience in that use class and that market, and a written statement of the basis of valuation and the assumptions used. A Viability Assessment without that statement is not reviewable.

Benchmark land value and the judgement inside it

Benchmark land value is where most disputes live, and it is a judgement rather than a calculation.

The guidance approach is existing use value plus a premium for the landowner, with alternative use value relevant only where that alternative use has an implementable permission or would clearly obtain one. The premium has to reflect what would reasonably persuade a landowner to release the land, adjusted for policy requirements, which means a price actually paid is not itself a benchmark. Paying too much for a site is not a planning argument.

Three questions a reviewer will ask about the benchmark:

1. What is the existing use, what is it worth in that use, and what evidence supports that figure.
2. What premium has been applied, on what reasoning, and how does it compare with the premium adopted in the authority's plan-wide viability evidence.
3. Has any policy requirement, including affordable housing and the levy, been reflected in the land value rather than treated as a cost on top of the price paid.

The developer's return gets similar treatment. The guidance refers to a return in the region of 15 to 20 per cent of gross development value as a reference point for a competitive return, with a lower figure appropriate in some circumstances such as build to rent. Check the current wording of the guidance, because it is periodically revised, and expect the reviewer to challenge a return at the top of the range on a low risk scheme.

How the authority's review actually runs

The reviewer's fee is normally recovered from the applicant, and that cost should be in the budget from the start rather than arriving as a surprise. Review is not a rubber stamp: the reviewer is advising the authority on whether to accept a departure from adopted policy, and the officer's report will record the reviewer's conclusion rather than the applicant's.

What shortens a review is completeness. Supply the full cash flow, the input assumptions with sources, the cost plan with its basis and date, the sales or rental evidence, the finance assumptions and a sensitivity analysis. What lengthens it is a redacted appraisal with an invitation to trust the output.

Where two valuers reach honestly different conclusions, a joint statement setting out agreed facts and remaining differences saves everyone time, and that discipline is covered in the note on statements of common ground and expert conferencing.

Transparency and publication

Viability assessments submitted with applications are expected to be made publicly available, with an executive summary, so that the public can see the basis on which policy requirements are being reduced. Redaction is for narrow cases rather than a default.

Plan for that. An assessment written on the assumption it will stay confidential reads badly when published, and an applicant who fights publication spends credibility that would be better used on the substance. Where commercially sensitive data really has to be withheld, identify it early, explain why, and provide enough for the conclusion to be followed without it.

Review mechanisms are the other transparency tool. Where viability is marginal, authorities commonly secure an early stage or late stage review in the section 106 agreement, recalculating the position against actual costs and values and capturing additional affordable housing or contributions if the scheme outperforms. Negotiating the trigger points and the formula carefully at the outset matters more than arguing the original appraisal to the last pound.

Conflicts of interest

Declare them. The valuer's professional obligations require disclosure of any interest that could affect objectivity, including prior work for the landowner, an interest in the site, a contingent fee arrangement, or a relationship with a party to the transaction.

Contingent fees are the one that catches people. A fee dependent on the outcome of the viability negotiation undermines the impartiality the professional statement requires, and a reviewer who discovers it will say so in writing to the authority.

On the authority's side the same principle applies, and an applicant is entitled to ask whether the appointed reviewer has acted for a competing landowner on an adjacent site.

Preparing for a review rather than reacting to one

The habit that separates smooth cases from painful ones is assembling the assessment as if the reviewer were already reading it.

• Write the assumptions schedule first, with a source for every input.
• Date the cost plan and say who prepared it.
• Set out the benchmark land value reasoning in full, including what was rejected.
• Include a sensitivity analysis on sales values, build costs and finance.
• Reconcile the appraisal against the authority's own plan-wide viability evidence and explain the differences.
• Say what policy compliance the scheme does deliver rather than dwelling on what it cannot.

That last point is underused. An assessment that opens with the affordable housing the scheme can support, and the review mechanism offered, puts the officer in a position to recommend something. One that opens with a nil contribution invites a fight.

Where a weak appointment costs the applicant

The costs are rarely the fee difference. They are the determination period lost to a review that found the inputs unsupported, the reduction in officer confidence that follows, the committee that defers for further work, and the appeal where a non valuer is cross examined on valuation evidence.

Check the appointment the way you would check any expert: the credential, the comparable scheme experience, and the track record when the work has been tested. The note on checking a consultant's appeal track record sets out how to do that in an afternoon. If you need a reviewer to look over a draft before it goes in, the professional directory is the route to one.

PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. For specialist technical reports, qualified professional input may be required, and a viability assessment is valuation work that needs a qualified valuer rather than a draft alone.