Viability at appeal: how inspectors handle rival appraisals

Viability appeal evidence rarely turns on the profit percentage. It turns on whether the inspector can follow your model, whether the inputs are sourced, and whether the disputed items were narrowed before the event rather than argued from scratch at the inquiry. Two appraisals of the same scheme can differ by seven figures, and the party that explains the difference item by item usually comes out ahead of the party defending a conclusion.

Narrowing the inputs before the hearing

Most viability disputes involve perhaps forty inputs, of which four or five actually matter. Identifying those early is the single most useful thing either side does.

Work through the other party's appraisal line by line and mark each input agreed, agreed subject to a point of principle, or disputed. Then exchange that schedule. Build costs, sales values, benchmark land value, finance and the developer's return are the usual survivors, and everything else can be agreed or set aside.

The discipline pays off twice. It shortens the evidence, and it exposes the items where the other side has no support, because an input nobody can source is obvious once it is the only thing left on the list.

The statement of common ground

At inquiry, and often at a hearing, the inspector will expect a statement of common ground on viability. It should record the agreed inputs with their values, the disputed inputs with each party's figure and the reason for the difference, the appraisal methodology and software used, the date of the appraisal and the evidence base for values, and the outputs under each party's case.

Put the rival figures in a single table. Inspectors read a great deal of material under time pressure, and a table that shows the two appraisals side by side with the delta on each line does more for your case than a well-written paragraph.

Where the parties cannot agree the methodology itself, say so and explain both. A statement of common ground that pretends to more agreement than exists unravels under cross-examination, and the inspector notices who overstated it.

Transparency and publication of appraisals

National viability guidance starts from the position that assessments should be publicly available, with only limited redaction where real commercial sensitivity is demonstrated. That applies at appeal as much as at application stage.

Plan for it. An appraisal drafted on the assumption that nobody outside the negotiation will read it produces awkward moments when a residents' group cross-refers your build cost to a tender you filed elsewhere. Redaction requests need to be specific and justified rather than blanket, and a party that seeks to withhold the whole appraisal should expect the inspector to give that less weight, not more.

The practical approach is to write the report for publication from the first draft, keeping sensitive material such as contract sums in a clearly identified appendix with the justification for restricting it.

Where inspectors have tended to prefer one benchmark

Benchmark land value is the most contested input, and the approach in national guidance is existing use value plus a premium, with alternative use value considered where there is a real prospect of that use.

Decisions in this area have generally favoured the guidance route over a market value benchmark that reflects policy non-compliant assumptions, on the reasoning that allowing a land price paid on the expectation of reduced affordable housing would let the market set policy. Appeal decisions are indicative of how inspectors have approached the issue rather than binding precedent, so cite them as illustration and be ready for a different reading on different facts.

Two practical consequences follow. If you paid too much for the site, saying so is better than constructing a benchmark to justify the price. And where an alternative use is relied on, evidence that it could actually be delivered, with its own consent position and appraisal, is what makes the argument stand up.

A Viability Assessment that sets out the benchmark derivation transparently, showing the existing use value calculation and the premium with its reasoning, survives scrutiny better than one that states a figure and moves on.

Expert evidence and professional standards

Members of the Royal Institution of Chartered Surveyors preparing viability evidence are bound by the professional statement on financial viability in planning, which requires objectivity and transparency of assumptions whoever gives the instructions. At an inquiry that obligation is tested directly.

Expect cross-examination on the instructions received, on inputs that changed between drafts, on whether the model has been run with the other side's figures, and on the difference between the appraisal and any internal board approval document for the same scheme. That last one is uncomfortable and it comes up.

What helps:

• A model that can be audited, with formulas visible and no hidden sheets.
• Every input sourced to a document, with the document in the appendix.
• Sensitivity tables already run, so questions about a 5 per cent movement have answers.
• A clear statement of what has changed since any earlier version and why.
• The willingness to concede a point that is not worth defending.

An expert who concedes two small points early is believed on the large one. An expert who defends everything is believed on nothing.

Review mechanisms as a way through

Where the dispute is about uncertainty rather than principle, a review mechanism sometimes resolves it. Early stage and late stage reviews built into a section 106 agreement allow the affordable housing contribution to be recalculated if values or costs move, which addresses the council's concern that the appraisal is pessimistic and the developer's concern that the scheme cannot carry policy compliance today.

Offer the mechanism with its drafting rather than in principle. A proposed clause with the trigger dates, the formula, the cap and the payment mechanism gives the inspector something to impose. An offer to agree a review mechanism later usually attracts a condition nobody likes or no weight at all.

The affordable housing position needs to align with the Affordable Housing Statement and any tenure or transfer evidence, and the way councils account for what they collect is explained in our note on infrastructure funding statements.

Costs applications on viability grounds

Costs can be awarded where a party has behaved unreasonably, and viability appeals generate a particular pattern of unreasonable behaviour: a case advanced without evidence, an appraisal withdrawn or substantially revised at the last moment, a refusal to engage with the statement of common ground, or a council that maintains an objection its own adviser does not support.

If you are on the receiving end of that, keep a dated record of requests made and responses received, and make the application in the proper form at the right time. If you are at risk of it, revise your case early and say plainly that you have.

Preparing an appraisal that survives cross-examination

Work backwards from the questions. Assume the other side's expert will ask where each number came from, whether it is current, whether it is consistent with your other documents, and what happens if it moves by 5 per cent. Then build the file so each answer is a page reference rather than a recollection.

Practical steps, in order.

1. Fix the valuation date and state it on the front page.
2. Source values to comparables with dates and addresses.
3. Price costs from a quantity surveyor's estimate keyed to the drawings.
4. Document abnormals separately with their own evidence.
5. State the finance structure as it actually is, not as a convention.
6. Derive the benchmark land value transparently.
7. Run and publish the sensitivities.
8. Reconcile the appraisal against any other written version of the same scheme's numbers.

Sector-specific arguments, such as those covered in our note on student accommodation planning contributions, have their own evidence base and should be prepared on the same basis.

This is general guidance, not legal advice; viability evidence for an appeal should be prepared by a suitably qualified valuer, with planning and legal advice on procedure. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.