Refusal on viability: what to submit on appeal

A refusal on viability grounds almost never says the scheme is unviable. It says the applicant has not demonstrated that the policy compliant affordable housing requirement cannot be met, which puts the burden squarely on the appellant at section 78 appeal. So the appeal turns into a forensic argument about four or five numbers rather than a debate about whether development should happen, and the side with the better evidenced inputs usually wins.

Start by reading the refusal reason literally. If it alleges a failure to demonstrate, your appeal has to demonstrate. If it alleges the appraisal used an unjustified benchmark land value, that single input is the battleground and the rest can be agreed.

What a viability refusal reason alleges

Three forms turn up repeatedly. The first is a straightforward policy conflict: the scheme offers less affordable housing than the adopted plan requires and the shortfall has not been justified. The second attacks the appraisal itself, usually the land value or the developer return. The third is procedural, where the council says the appraisal was not submitted in a form it could assess or publish.

The third sort is the easiest to cure and the most embarrassing to lose. National viability guidance expects assessments to be publicly available, and councils increasingly refuse to engage with appraisals submitted on a confidential basis. If that is the reason, submit the appraisal in full with the appeal and say so in the statement of case.

Set out your response to each limb of the reason in the same order the notice uses. Our note on reading a refusal notice and turning it into a plan covers that discipline across refusal types.

The inputs that are usually in dispute

An appraisal has perhaps twenty inputs and five of them decide the outcome. Agreeing the other fifteen in a statement of common ground saves inquiry time and shows good faith.

Abnormal costs deserve their own warning. A schedule of abnormals with no supporting survey behind it gets discounted entirely by most assessors, and demolition, piling, contamination remediation and utility diversions each need a report rather than an allowance. If the ground conditions drive the case, a geotechnical assessment and the contamination work have to be in the appeal bundle, not described in the appraisal narrative.

Benchmark land value and how it is argued

This is where viability appeals are won and lost. Existing use value plus a premium is the approach national guidance prefers, with market evidence of transactions used as a cross check rather than as the starting point.

The difficulty is circularity. If land has been bought at a price that assumes a policy light scheme, using that price as the benchmark imports the planning judgement into the valuation. The High Court addressed this in Parkhurst Road, where the court upheld an approach requiring market evidence of land transactions to be adjusted to reflect policy compliant development. The practical consequence is that the price paid is not the answer, and saying so in an appraisal invites a short dismissal.

Build the existing use value from the current lawful use, evidenced by rent passing, yields and the condition of the buildings. Then justify the premium by reference to what a reasonable landowner would require to release the site, and test it against adjusted transactional evidence. Expect the council's assessor to put forward a lower premium and be ready to explain the difference rather than restate your figure.

Transparency and the publication question

Viability appraisals submitted with planning applications are expected to be publicly available, in full, other than in exceptional circumstances. Many appellants still ask for commercial confidentiality over build costs and sales rates, and inspectors tend to be unsympathetic.

Treat publication as the default and design the appraisal for it. Where one element really is confidential, such as a commercial pre-let at a rate the tenant will not disclose, deal with it by a redacted appendix and a signed explanation rather than by withholding the appraisal.

Review mechanisms as the alternative to winning outright

Where the dispute is about future values rather than present ones, a review mechanism is often the deal that gets permission. An early stage review triggers if implementation is delayed beyond a set period, and a late stage review recalculates the affordable contribution against actual sales values once a defined proportion of units is sold.

Offer the mechanism in the statement of case with draft heads of terms attached. An inspector who is unpersuaded on the appraisal but satisfied that the scheme carries a properly drafted review has a route to allowing the appeal that does not require accepting your numbers in full.

Three details matter in the drafting. The trigger points have to be objective and measurable. The formula has to say what happens to the uplift, including any cap. And the obligation has to bind successors in title, which means a section 106 agreement rather than a condition.

Our guide to budgeting a viability assessment and its review mechanism sets out what the exercise costs on both sides of the trigger.

Independent assessment and the procedure to choose

Councils almost always refer appraisals to an independent assessor, and on appeal that assessor usually becomes the council's witness. Read their application stage report line by line, because it tells you exactly which inputs the council will defend.

Procedure follows the dispute. A written representations appeal rarely suits a contested appraisal, because there is no mechanism to test assumptions. Most contested viability cases go to a hearing or an inquiry, where a witness can be questioned on the cost plan and the land value. Where the parties can narrow the issues to two inputs, a round table session at a hearing deals with it faster than full cross examination.

Build the bundle around the arithmetic:

1. The appraisal in the same software and format the council's assessor used, with an input schedule and a sensitivity analysis.
2. A statement of common ground listing agreed inputs and the remaining areas of dispute.
3. A valuation proof dealing with benchmark land value, with the comparable evidence as appendices.
4. A cost proof from the quantity surveyor, with the abnormals schedule cross referenced to the surveys that support it.
5. Draft heads of terms for the section 106 obligation, including any review mechanism.
6. An Affordable Housing Statement setting out the offer, the tenure split and the mechanism, so the planning case and the appraisal say the same thing.

Where viability cases fail

Having seen the pattern often enough, the failures are predictable. An appraisal that justifies the land price rather than testing it. A cost plan dated eighteen months before the appeal with no indexation. Abnormals asserted without surveys. A developer return at the top of the national range on a low risk site with no explanation. Sensitivity analysis omitted, so the inspector cannot see how close the case is.

The other common failure is tonal. Viability evidence that reads as advocacy loses credibility quickly, and an inspector who distrusts one input tends to distrust the appraisal. Concede the inputs you cannot defend, narrow the case to what you can evidence, and give the decision maker a defensible figure rather than an optimistic one.

A refusal on viability is also worth testing against the alternative of resubmission with a better evidenced appraisal, since a fresh application avoids the costs risk and the delay of an inquiry. Weigh that before lodging, and set out the chosen route in the Planning Statement that accompanies either course.

This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.