Viability evidence at the plan making stage
Whole plan viability testing decides what policy a scheme can be asked to carry. Applications that comply with an up-to-date plan are assumed viable, which changes where the argument happens.
Viability is settled once, at plan making, and national guidance then expects applications that comply with up-to-date policies to be assumed viable. That single sentence does more work than any appraisal spreadsheet. It moves the argument from the application to the examination, puts the burden on the applicant who wants to depart from policy, and makes the plan's own evidence base the document you should be reading before you write a site specific appraisal.
Most consultants read the plan. Fewer read the viability study behind it.
Why viability is tested when the plan is made
Section 38(6) of the Planning and Compulsory Purchase Act 2004 requires decisions to be taken in accordance with the development plan unless material considerations indicate otherwise. A plan that asks for 40 per cent affordable housing, a carbon standard, a play space contribution and a levy rate that no scheme can carry is not a plan that will be delivered, so the examination has to test the cumulative effect of the policies before adoption.
Planning Practice Guidance on viability sets the approach. Plan makers should assess whether the policies in the plan, taken together, allow development to come forward, using a proportionate assessment rather than a site by site exercise. The outcome is a set of policy requirements the evidence says are deliverable, and a statement of the circumstances in which the authority will accept a viability case at application stage.
Get the plan stage wrong and every application becomes a negotiation. Get it right and most do not.
Typologies and standardised assumptions
Whole plan viability testing works through typologies rather than through real sites. A typical study will model a dozen or so cases: a small brownfield infill, a mid-sized greenfield extension, a large strategic allocation, flatted development in the main town, a rural scheme, and one or two commercial typologies.
Each typology carries standardised inputs. Build costs from a published cost index with an allowance for abnormals. Sales values by value area, usually from registered transactions. Professional fees, finance, marketing and contingency as percentages. Policy costs including affordable housing, the levy rate being tested, and the cost of any carbon or space standard the plan proposes.
The assumptions are where the argument lives. A study that applies a single build cost across a borough with an eight-fold range in sales values will produce a conclusion that works in the strong areas and fails in the weak ones, and the typology set has to be fine-grained enough to show that.
Benchmark land value
The benchmark land value decides most outcomes. National guidance sets out an existing use value plus a premium approach: establish what the land is worth in its current use, add a premium sufficient to persuade a reasonable landowner to sell, and test whether the scheme can carry the policy costs and still beat that figure.
The premium has to be evidenced, and the guidance is explicit that the price actually paid for a site is not a justification for failing to meet policy. That rule only works if it is applied at plan making, where the benchmark is set in the abstract, free of any particular deal.
Developer return is the other standard input. The guidance refers to a return in the region of 15 to 20 per cent of gross development value as a suitable figure for market housing, with a lower figure appropriate for the affordable element because the risk profile differs. Expect those numbers to be argued at examination, and expect an inspector to want the reasoning rather than a convention.
| Input | Plan stage treatment | Application stage treatment |
|---|---|---|
| Land value | Benchmark from existing use plus premium | Same benchmark, not the price paid |
| Build cost | Published index plus abnormals allowance | Site-specific cost plan, evidenced |
| Values | Value areas from transaction evidence | Scheme-specific, usually agent advice |
| Policy costs | Full policy package being tested | The policies that apply to the scheme |
| Return | Standard percentage range | Argued on the scheme's risk |
What the plan stage assessment settles
It settles three things. Whether the affordable housing percentage and tenure split in the draft policy can be carried. Whether the levy rate in the draft charging schedule leaves enough headroom alongside site specific obligations. And the circumstances in which the authority will entertain a viability case at application stage, which the plan should state rather than leave to practice.
That third point is the one applicants overlook. Where the plan says viability will only be revisited in defined circumstances, submitting an appraisal outside them invites the officer to give it little weight before reading it.
Why site specific appraisals are the exception
If an up-to-date plan has tested the policy package and the scheme complies, the starting assumption is that it is viable. An applicant seeking to depart has to show something about the site that the typologies did not capture: abnormal costs with a quotation behind them, contamination remediation, an unusual infrastructure requirement, or a value position the value areas got wrong.
A Viability Assessment submitted on that basis has to be transparent. National guidance expects assessments to be publicly available, with only narrowly drawn exceptions, and an appraisal marked commercially confidential in its entirety tends to be given short shrift. Where the departure is agreed, a review mechanism usually follows, and our note on affordable housing review mechanisms in section 106 explains how those are drafted.
The Affordable Housing Statement and the appraisal have to tell the same story. Officers compare them.
Changed circumstances and the reopening argument
Plans age. Build cost inflation, interest rates and a soft sales market can all open a gap between the adopted policy and what a scheme will carry, and the honest question is whether that gap is a site matter or a plan matter.
Where values and costs have moved across the whole authority, the proper answer is a plan review, not a succession of individual appraisals. Where the movement is specific, an application case is legitimate. Inspectors are alive to the difference, and our piece on when an inspector reopens viability at appeal covers how that plays out.
The weakest version of the argument is the one that starts from the price paid. It fails at plan making and it fails on appeal.
Using the plan evidence in an application
Read the viability study before you write anything. It will tell you which typology your site resembles, what build cost the authority accepted, what value area it sits in, and what policy costs were assumed. If your appraisal departs from those, say where and why, line by line.
An illustrative case: a 60 unit brownfield scheme in a district whose plan was examined three years earlier. The applicant's appraisal showed a deficit against 35 per cent affordable housing. Rather than argue the whole model, the consultant took the authority's own typology, substituted a quoted piling cost and a measured contamination allowance, and left every other input untouched. The officer agreed 22 per cent with a late-stage review. That approach works because it makes the disagreement small and specific.
Browse the report types PlanScope drafts if you need a viability or affordable housing document structured to UK planning policy before a specialist reviews it.
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.
Frequently asked questions
What is whole plan viability testing?
It is the assessment carried out when a local plan is prepared, testing whether the cumulative cost of the plan's policies allows development to come forward. It works through site typologies with standardised cost and value assumptions rather than through individual sites, and it supports the soundness case at examination.
Does an up-to-date plan mean my scheme is assumed viable?
If the scheme complies with the policies the plan tested, yes, that is the starting assumption in national guidance. An applicant who wants a reduced contribution has to show something the typologies did not capture, such as evidenced abnormal costs or remediation, rather than reopening the plan's general assumptions at application stage.
How is benchmark land value set?
National guidance uses existing use value plus a premium: establish what the land is worth in its current use, then add an evidenced premium sufficient to persuade a reasonable landowner to release it. The price actually paid for the site is not a justification for failing to meet policy, which is why the benchmark is set in the abstract.
Are viability assessments public?
National guidance expects them to be made publicly available, with only narrowly drawn exceptions for commercially sensitive material, usually handled through an executive summary. An appraisal submitted in full confidence tends to be given little weight, and objectors and members will ask why it cannot be read.
What developer return is accepted?
Guidance refers to a return in the region of 15 to 20 per cent of gross development value as potentially suitable for market housing, with a lower figure appropriate for the affordable element because the risk differs. These are starting points for argument rather than fixed rules, and an inspector will want the reasoning behind the figure chosen.
Sources and further reading
This article is general guidance about the planning system in England and, where stated, the rest of the UK. It is not legal or professional advice. Check your local planning authority’s validation requirements and take professional advice for your specific site.