Session 3: The Mechanics of
viability testing
A simple development viability
appraisal
•
•
•
•
•
Data Collection
Calculation (Residual Value, Cashflow)
Reality Check
Interpretation
Use of data
Note: Will discuss consultation later – it is vital
and required!
Data Collection
Rubbish in = Rubbish out
All inputs MUST be sourced!
Ask for information early
Landowners and site promoters should be prepared to
provide sufficient and good quality information at an
early stage……. This will allow an informed judgement
by the planning authority regarding the inclusion or
otherwise of sites based on their potential viability.
Harman Guidance – Page 23
Income Data
INCOME
Av Size
m2
%
Number
87
Price
£/m2
GDV
£
GIA
m2
Market Housing
95.0
70%
61
2,500
14,463,750
5,786
Shared Ownership
95.0
9%
8
1,750
1,301,738
744
Affordable Rent
95.0
21%
18
1,200
2,082,780
1,736
Social Rent
95.0
0%
0
900
0
0
0
0
0
0
0
0
Grant and Subsidy
SITE AREA
Shared Ownership
Affordable Rent
Social Rent
2.50 ha
35
/ha
17,848,268
8,265
Income Data
• Basic Prices by £/m2
• Residential Prices – House v flats
• Commercial / non-residential
• Affordable Prices
• New v existing
• Incentives and discounts
• Variance by location or situation?
• Grants, subsidies
Gross internal area?
• BCIS (the costs) as ‘Rate per m2 gross
internal floor area for the building’
• Direct from developers
• Calculate – it will be an estimate
Income Data - Residential
•
•
•
•
•
Land Registry
Hometrack
Rightmove / Zoopla / Mouseprice
Halifax / Nationwide
CORE
• Developers and RPs
Developer
Scheme
Place
Units
Earls court Farm
Worcester
Hampstead
Oxford
Kenilworth
Richmond
Cambridge
Cheltenham
Westminster
Warwick
Beds
Internal Gargarge
Separate Gararge
Floors
House
sqft
Flat
sqft
House
m2
Flat
m2
Price
House
£/m2
Flat
£/m2
£/Bedroom
Worcestershire
Redrow
Redrow
Redrow
Hamlet Place
Great Park
Barratt 01299 288640
waters Edge
5
4
4
4
4
5
4
3
Stourport on Severn Pembroke
Salisbury
Cambridge
4
4
4
Rubery B45
4
4
Stratford
Oxford
Ruthin
Hampstead
Salisbury
Stourport on Severn Trent
Kent
Leven
River View
River View
Beaulieu House
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
1
12
4
3
11
11
3
3
3
3
2
1
2
3
2
3
2
2
3
2
2
1845
1261
1095
2024
1330
1600
1013
359995
284995
204995
469995
299995
444995
394995
239995
2
2
2
1112
1564
1330
2
2
2
3
2
1096
1261
3
3
2
1
1
1
196
100
1845
1330
100
90
74
57.5
40
52
d
d
d
d
d
d
d
d
#DIV/0!
#DIV/0!
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#DIV/0!
#DIV/0!
2270.383
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
71999
71248.75
51248.75
117498.8
74998.75
88999
98748.75
79998.33
239995 d
339995 d
289995 d
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
59998.75
84998.75
72498.75
249995
267995
269995
354995
379995
d
d
d
d
d
#DIV/0!
#DIV/0!
2699.95
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
62498.75
66998.75
#DIV/0!
#DIV/0!
#DIV/0!
188000
186000
171000
150950
130950
169950
t
t
t
F
f
f
1880
2066.667
2310.811
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0! 62666.67
#DIV/0!
62000
#DIV/0!
57000
2625.217
75475
3273.75
130950
3268.269
84975
ASHLEY Barratt Homes
Whether you are looking for your perfect first home or looking for a more manageable
property this two double bedroom home has everything you need. With an open plan
lounge/dining area with separate fully fitted kitchen provides the perfect entertaining
space on the ground floor which also has a useful downstairs WC. The first floor is
home to two double bedrooms and separate bathroom.
Mid-Terrace, Cloakroom, 624 Square feet
http://www.barratthomes.co.uk/new-homes/warwickshire/H438401-Bluebell/plot-125
A 4 bedroom 3 storey house for sale in Leicester
The Cheltenham is a 4 bedroom 3 storey house for sale in Leicester which is set over
3 levels offering great flexibility in accommodation, ensuite to master bedroom a
further family bathroom and shower room on the second floor. A spacious kitchen also
with utility and living room. Good sized garden parking with a single garage
Income Data – Non-Residential
• EGi Data / EGI Property Link
• Agents
• Valuation Office Agency
• Developers
EGI – Propertydata
EGi -- Comparable Deals Data Transaction
type
Lease
Exported 17/09/2012
Street
Weldon Road
Town
Loughborough
Postcode
LE11 5RF
Deal date
18/07/2012
Property type
Office
Property
sub type
Office (B1a)
Size
265
Total space
UoM
Net sq m
Size(sq ft)
2,850
Sale
Address
Suite 1, Bank Court, Weldon Road, Loughborough, Leicestershire,
LE11 5RF
Ground,
28 Factory Street, Loughborough, Leicestershire, LE11 1AL
Factory Street
Loughborough
LE11 1AL
01/07/2012
Office
Office (B1a)
42
Net sq m
454
£25,000
Lease
1a Bakewell Road, Loughborough, Leicestershire, LE11 5QY
Bakewell Road
Loughborough
LE11 5QY
01/07/2012
Office
Office (B1a)
34
Net sq m
362
Not quoted
£4,000
£118.94
£11.05
Lease
Unit 13, Industrial Units, Prince William Way, Loughborough,
Leicestershire,
5DD
Unit
6, IndustrialLE11
Units,
Prince William Way, Loughborough,
LE11 5DD
01/06/2012
Industrial / Distribution
Net sq m
4,432
£18
£18,000
£43.70
£4.06
LE11 5DD
30/05/2012
Industrial / Distribution
134
Net sq m
1,437
Not quoted
£9,500
£71.15
£6.61
Leicestershire,
LE11Loughborough,
5DD
37a
Granby Street,
Leicestershire, LE11 3DU
Loughborough
LE11 3DU
15/04/2012
Office
Light Industrial / Business Units
(B1c) Industrial / Business Units
Light
(B1c) (B1a)
Office
412
Loughborough
Lease
Prince William
Way
Prince William
Way
Granby Street
Loughborough
Lease
52
Net sq m
559
Not quoted
£4,800
£92.46
£8.59
Lease
39 Granby Street, Loughborough, Leicestershire, LE11 3DU
Granby Street
Loughborough
LE11 3DU
15/03/2012
Office
Office (B1a)
126
Net sq m
1,360
Not quoted
£11,000
£86.97
£8.08
Sale
17 Forest Road, Loughborough, Leicestershire, LE11 3NW
Forest Road
Loughborough
LE11 3NW
02/03/2012
Office
Office (B1a)
148
Net sq m
1,593
£175,000
Not quoted
Sale
202 Ashby Road, Loughborough, Leicestershire, LE11 3AG
Ashby Road
Loughborough
LE11 3AG
01/01/2012
Office
Office (B1a)
140
Net sq m
1,511
£265,000
Not quoted
Lease
Long Office, One Ash, Loughborough Road, Loughborough,
Leicestershire,
LE12
Long Office, One
Ash,8UE
Loughborough Road, Loughborough,
Leicestershire,
LE12 8UE
Gelders
Hall Industrial
Estate - Matrix House, Gelders Hall Road,
Loughborough
Road
Loughborough
Loughborough
LE12 8UE
01/12/2011
Office
Office (B1a)
32
Net sq m
Loughborough
Road
Gelders
Hall Road Loughborough
LE12 8UE
01/12/2011
Office
Office (B1a)
Sale
LE12 9NH
15/11/2011
Lease
Shepshed,
Loughborough,
Leicestershire,
LE12 9NH
35
Granby Street,
Loughborough,
Leicestershire,
LE11 3DU
Granby Street
Loughborough
LE11 3DU
03/11/2011
Office, Industrial /
Distribution
Office
Office (B1a), Industrial Park
(B1/2/8)
Office
(B1a)
Lease
Shepshed Road, Hathern, Loughborough, Leicestershire, LE12 5LZ
Shepshed Road
Loughborough
LE12 5LZ
02/11/2011
Office
Lease
Unit M, Little Moor Lane, Loughborough, Leicestershire, LE11 1SF
Little Moor Lane
Loughborough
LE11 1SF
15/10/2011
Industrial / Distribution
Lease
Granite Way
Loughborough
LE12 7TZ
15/09/2011
Lease
The Point, Granite Way, Mountsorrel, Loughborough, Leicestershire,
LE12
7TZ 29 Biggin Street, Loughborough, Leicestershire, LE11 1UA
1st
Floor,
Biggin Street
Loughborough
LE11 1UA
Lease
34 Woodgate, Loughborough, Leicestershire, LE11 2TY
Woodgate
Loughborough
Lease
North Road
Loughborough
Lease
Unit 14, Charnwood Business Park, North Road, Loughborough,
Leicestershire,
LE11
1LE
44b
Church Gate,
Loughborough,
Leicestershire, LE11 1UE
Church Gate
Lease
44 Church Gate, Loughborough, Leicestershire, LE11 1UE
Lease
28 Factory Street, Loughborough, Leicestershire, LE11 1AL
Sale
Yield %
per annum
Not quoted
Rental income
per sq m
per sq ft
Not quoted
£4,200
£132.18
£12.28
32
Net sq m
342
Not quoted
£4,200
£132.18
£12.28
1,368
Net sq m
14,720
£1,100,000
Not quoted
172
Net sq m
1,847
Not quoted
£16,000
£93.22
£8.66
Office (B1a)
103
Net sq m
1,110
Not quoted
£9,000
£87.19
£8.10
102
Net sq m
1,094
Not quoted
£6,500
£63.94
£5.94
Office
Light Industrial / Business Units
(B1c) (B1a)
Office
381
Net sq m
4,097
Not quoted
£39,000
£102.47
£9.52
30/08/2011
Office
Office (B1a)
102
Net sq m
1,102
Not quoted
£9,000
£87.83
£8.16
LE11 2TY
04/08/2011
Office
Office (B1a)
111
Net sq m
1,194
Not quoted
£10,500
£94.62
£8.79
LE11 1LE
15/07/2011
Office
Business Parks (B1b)
95
Net sq m
1,018
Not quoted
£12,000
Loughborough
LE11 1UE
11/07/2011
Office
Office (B1a)
138
Net sq m
1,490
Not quoted
£13,000
Church Gate
Loughborough
LE11 1UE
01/07/2011
Office
Office (B1a)
181
Net sq m
1,943
Not quoted
£18,000
£99.67
£9.26
Factory Street
Loughborough
LE11 1AL
01/06/2011
Office
Office (B1a)
42
Net sq m
454
Not quoted
£6,000
£142.19
£13.21
Hawcliffe Road
Loughborough
LE12 7AH
13/05/2011
Office
Office (B1a)
225
Net sq m
2,426
£183,600
Not quoted
Sale
88 Hawcliffe Road, Mountsorrel, Loughborough, Leicestershire, LE12
7AH
Offices,
3 Cossington Road, Sileby, Loughborough, Leicestershire,
Cossington Road Loughborough
Lease
LE12
7RW Way, Loughborough, Leicestershire, LE11 1LS
11
Hanford
£177.50
£16.49
Lease
342
Price
Not quoted
Not quoted
£93.86
£8.72
LE12 7RW
31/01/2011
Office
Office (B1a)
140
Net sq m
1,509
Not quoted
Not quoted
Hanford Way
Loughborough
LE11 1LS
21/12/2010
Retail
Car Showrooms (B1c)
444
Net sq m
4,784
Not quoted
£41,000
251 Loughborough Road, Mountsorrel, Loughborough, Leicestershire,
LE12
7AS Gate, Loughborough, Leicestershire, LE11 1TG
Investment Sale 19
Baxter
Loughborough
Road
Baxter Gate
Loughborough
LE12 7AS
13/12/2010
Office
Office (B1a)
17
Net sq m
188
Not quoted
£3,100
Loughborough
LE11 1TG
01/11/2010
Office
Office (B1a)
167
Net sq m
1,800
£185,500
Not quoted
Lease
Unit B2, Loughborough Motorway Trading Estate - Illuma House,
Gelders
Road, Shepshed,
Loughborough,
Leicestershire,
LE12
Unit
B3, Hall
Loughborough
Motorway
Trading Estate
- Illuma House,
Gelders Hall Road Loughborough
LE12 9NH
27/09/2010
Office
Business Parks (B1b)
245
Net sq m
2,638
Not quoted
£23,750
£96.88
£9.00
Gelders Hall Road Loughborough
LE12 9NH
24/09/2010
Office
Business Parks (B1b)
120
Net sq m
1,289
Not quoted
£11,500
£96.01
£8.92
Loughborough
Road
Loughborough
Loughborough
LE12 8UE
13/08/2010
Office
Office (B1a)
40
Net sq m
433
Not quoted
£3,600
£89.45
£8.31
Lease
Gelders
HallOne
Road,
Shepshed,
Loughborough,
Leicestershire, LE12
Park
View,
Ash,
Loughborough
Road, Loughborough,
Leicestershire,
LE12
Long Office, One
Ash,8UE
Loughborough Road, Loughborough,
Loughborough
LE12 8UE
13/08/2010
Office
Office (B1a)
64
Net sq m
684
Not quoted
£9,600
£151.02
£14.03
Lease
Leicestershire,
43a-43b
ChurchLE12
Gate,8UE
Loughborough, Leicestershire, LE11 1UE
Road Gate
Church
Loughborough
LE11 1UE
01/07/2010
Office
Office (B1a)
167
Net sq m
1,800
Not quoted
£12,000
£71.69
£6.66
Investment Sale 12 Southfield Road, Loughborough, Leicestershire, LE11 2UZ
Southfield Road
Loughborough
LE11 2UZ
15/06/2010
Office
Office (B1a)
402
Net sq m
4,327
£712,000
£49,760
£123.79
£11.50
Lease
Unit Q, Little Moor Lane, Loughborough, Leicestershire, LE11 1SF
Little Moor Lane
Loughborough
LE11 1SF
21/04/2010
Industrial / Distribution
Net sq m
1,268
Not quoted
Units R & S, Little Moor Lane, Loughborough, Leicestershire, LE11
1SF
Unit K, Little Moor Lane, Loughborough, Leicestershire, LE11 1SF
Little Moor Lane
Loughborough
LE11 1SF
12/04/2010
Industrial / Distribution
448
Net sq m
4,822
Not quoted
£11,000
Lease
Little Moor Lane
Loughborough
LE11 1SF
01/03/2010
Industrial / Distribution
61
Net sq m
655
Not quoted
Not quoted
Lease
5 Hanford Way, Loughborough, Leicestershire, LE11 1LS
Hanford Way
Loughborough
LE11 1LS
01/03/2010
Office, Retail
Light Industrial / Business Units
(B1c)
Light Industrial / Business Units
(B1c) Industrial / Business Units
Light
(B1c)
Office (B1a), Car Showrooms
118
Lease
1,246
Net sq m
13,412
Not quoted
£20,000
Lease
Lease
Lease
(B1c)
6.61
£6,500
EGI Property Link
Residential vs. commercial
Residential
Commercial
Purchaser usually buying a
home they intend to
occupy themselves
One customer: Usually a
purchaser looking for a
new home.
Purchaser usually buying a
rental stream as well as the
property itself
Two customers: Tenant
looking for suitable
premises and investor
looking for a rental stream.
Usually valued using NIA
Usually valued using GIA
What is the ‘yield’?
• The rent as a proportion of the purchase price
• There is an inverse relationship between yields &
values, i.e. a higher yield means a lower value & a
lower yield means a higher value.
• Yields are often used in development appraisals to
estimate the value of the completed development
when it is expected to be rented to a tenant (or
tenants). This consequently usually applies to
commercial property, although it can apply to
residential property where it is also rented.
What affects yields?
• Risk & future growth prospects (rental stream & capital
value of property). High risk = high yield. But, the
higher the future growth prospects = lower yield
• Low risk = lower return e.g. savings in an ISA. In a
casino you would be aiming for a higher 'yield' to
compensate for the probability of failure
• For the main investment classes Government Bonds
(gilts) are low risk whereas stocks & shares are more
high risk. Returns on property investment tend to be in
the middle, offering more income & capital growth
potential than gilts and less risk than shares
What affects property yields?
• The tenant - Is it a strong tenant in terms of security of
income (or rent)? Security is something you would
normally expect to pay for, perhaps by accepting a
lower initial return on your investment.
• The area - Is the location suitable for a building of this
quality? Is it declining or improving? Is the access
good?
• The building itself - What is it like? If the tenant goes
bust, how easy will it be to find a new tenant? Do
these and other lease clauses protect your investment
e.g. upward only rent reviews etc.?
Yield example
• Offices are normally bought by investors such as
pension funds. Let us assume a pension fund wants
to buy an office when it is fully occupied by a
tenant(s)…
• The developer should have a firm idea of what rent
the building is likely to achieve e.g. £100,000pa.
• In basic development appraisals, the initial rent is
therefore used to help estimate the development
value. The key question is therefore how much
should this rent should be multiplied by to calculate
what price a purchaser will pay.
Yield example (continued…)
• The “multiplier” is calculated as 1 / yield. Therefore:
Development Value = Initial Rent x (1 / Yield) x 100
• Let’s assume the pension fund requires a return of
6% pa. Therefore the value of the rented office
building as an investment is calculated as follows:
£100,000 x (1 / 6) x 100 = £1.6m
Yield example (continued…)
• The previous scenario did not include assumptions
on future rent or prospects for capital growth of the
asset i.e. it assumed the pension fund would receive
a flat £100,000 pa in perpetuity.
• Let us now assume the office is in a good location
with a good tenant and good prospects for rental
growth e.g. up and coming area, office market
looking healthy locally etc. With this information the
pension fund is likely to accept a lower initial yield
e.g. 5%:
£100,000 x (1 / 5) x 100 = £2m
Yield example (continued…)
• Let us now assume the pension fund are less
convinced that the rent will rise in the future and they
are worried that the tenant found by the developer
are unlikely to stay solvent or remain in the area long
term. With this information the pension fund is likely
to want a much higher yield e.g. 10%:
£100,000 x (1 / 10) x 100 = £1m
• These examples demonstrate the inverse
relationship between yields & values. Clearly it would
make no sense for the pension fund to pay over the
odds for a riskier investment.
Rents, Yield and Capital Value
Development Value = Rent x (1 / Yield) x 100
Yield = (Rent / Value) x 100
Years Purchase (YP) = 1/Yield
Rent to Value
Table 5.1 Capitalised typical rents £/m2
Rent£/m2
Yield
Large industrial
Small industrial
Distribution
Large office
Small office
Large retail Convenience
Large retail - Other
Small Retail
Leicester Shops
Other Shops
Hotels
Student Halls
Leisure
41
48
50
93
100
7.0%
7.0%
6.0%
6.5%
7.0%
Capitalised
Rent £/m2
586
686
833
1,431
1,429
130
120
105
236
150
5.0%
7.0%
7.0%
7.0%
11.0%
6.5%
6.5%
8.0%
2,600
1,714
1,500
3,371
1,364
2,150
2,225
938
75
Costs
DEVELOPMENT COSTS
LAND
Land
Stamp Duty
Easements etc.
Legals Acquisition
/unit or m2
42,499
Planning fee calc
Planning app fee
No dwgs
No dwgs under 50
No dwgs over 50
Total
3,697,391
1.50%
184,870
0
55,461
6.00%
1.00%
0.50%
2.50%
16,095
511,275
85,213
42,606
213,031
dwgs
87
37
37
rate
335
100
Total
12,395
3,700
16,095
240,330
PLANNING
Planning Fee
Architects
QS / PM
Planning Consultants
Other Professional
CONSTRUCTION
Build Cost - BCIS Based
s106 / CIL
Contingency
Abnormals
925
5,000
2.50%
7,645,125
435,000
191,128
250,000
Stamp duty calc - Residual
Land payment
125,000
0%
250,000
1%
500,000
3%
1,000,000
4%
above
5%
868,220
Stamp duty calc - Add Profit
Land payment
125,000
0%
250,000
1%
500,000
3%
1,000,000
4%
above
5%
8,521,253
FINANCE
Fees
Interest
Legal and Valuation
10,000
7.00%
7,500
17,500
3,697,391
1%
3%
4%
5%
5%
Total
184,870
700,000
1%
3%
4%
5%
5%
Total
35,000
£/ Unit (all)
Total
87,000
SALES
Agents
Legals
Misc.
2.0%
0.5%
356,965
89,241
5,000
451,207
13,795,901
Developers Profit
% of costs (before interest)
% of GDV
20.00%
0.00%
2,759,180
0
Post CIL s106
1,000
Construction
•
•
•
•
BCIS
Site Costs
Abnormals
Contingency
Rate per m2 gross internal floor area for the building Cost including prelims.
Last updated 12-Jan-2013 12:01.
BCIS
Location adjusted to Cumbria (Location index 93, sample 73).
Maximum age of results:
Default period
£/m² gross internal floor area
Building Function
(Maximum age of projects)
Sample
Mean
Lowest
Lower
Quartile
Median
Upper
Quartile
Highest
758
383
638
735
849
1660
641
Generally (15)
739
381
631
721
817
1534
1131
Single storey (15)
814
440
700
786
920
1409
227
2-storey (15)
719
381
625
702
798
1374
817
3-storey (15)
723
477
605
671
808
1534
85
4-storey or above (25)
1038
791
-
949
-
1373
3
744
586
615
668
816
1009
11
Generally (15)
738
385
631
722
825
1409
234
Single storey (15)
861
543
728
861
979
1409
47
2-storey (15)
711
385
623
703
795
1043
176
3-storey (15)
646
512
576
617
704
896
11
Generally (15)
758
382
631
731
856
1534
259
Single storey (15)
805
497
671
752
927
1237
52
2-storey (15)
747
382
634
733
848
1163
171
3-storey (15)
739
482
606
668
780
1534
36
Generally (15)
869
441
724
836
970
2674
646
1-2 storey (15)
835
492
720
807
928
1560
177
3-5 storey (15)
856
441
718
835
965
1761
421
6+ storey (15)
1138
662
872
1075
1280
2674
41
987
495
760
891
1179
2226
48
Generally (15)
1191
523
892
1057
1405
2655
100
Single storey (15)
980
523
852
932
1092
1444
41
2-storey (15)
1236
608
936
1069
1485
2465
42
3-storey (15)
1562
972
1399
1471
1724
2655
13
4-storey or above (25)
1451
947
-
1240
-
2376
4
'One-off' housing semi-
841
561
745
835
932
1228
103
New build
810.
Housing, mixed
developments (15)
810.1
Estate housing
810.11 Estate housing detached
(15)
810.12 Estate housing semi
detached
810.13 Estate housing terraced
816.
Flats (apartments)
818.
Housing with shops, offices,
workshops or the like (15)
820.1
'One-off' housing detached
(3 units or less)
820.2
Construction
• BCIS
• Site Costs –
• Abnormals –
• Contingency –
10% to 20%
site by site
Highways, flooding
demolition, design,
decontamination etc.
2.5% Greenfield
5% Brownfield
+7% on horrible sites
Phasing and Build Rate
• Size of site
• Size of developer
• Availability of mortgages
• Pre 2007
45 to 50 per year
• Now? 30 to 35 per year
• Multiple developers
Variables
• Small Changes of cost or income can have a
huge difference in result – the bigger the
numbers the more sensitive.
– 101-100=1 but 102-100=2
– 1% change in price results in a 100%
change in outcome
• Scenarios – cost and price change
policy requirements
Building the model up
and scenario testing
• Discounted Cash Flow
– NPV
– IRR
• Return On Capital Employed (ROCE)
Monitoring Viability
By reference to indices:
Costs
BCIS
GDV
Land Reg
Halifax / Nationwide
Composite
Academetrics
Hometrack
Rightmove / Zoopla /
BUT – have new build followed wider market?
Assumptions and testing
“make some very
cautious and
transparent
assumptions with
sensitivity testing of
the robustness of
those assumptions
it is important that
variations against
baseline costs, as well
as values, are tested.”
(page 27 – Harman)
PPG: How should changes in values
and costs be treated in plan-making?
Plan makers should not plan to the margin of
viability but should allow for a buffer to
respond to changing markets and to avoid
the need for frequent plan updating. Current
costs and values should be considered when
assessing the viability of plan policy. Policies
should be deliverable and should not be based
on an expectation of future rises in values at
least for the first five years of the plan period.
Gross Development Value
All income from a Scheme
Construction
Fees
Site Remediation Design
Abnormals
Engineer
Etc.
Sales
Etc.
Profit
Land
Policies/CIL
Developers Existing / CIL, affordable
Builders Alternative
housing,
Use Value CfSH, open
+ premium
space etc.
(TLV/EUV+)
Carveth Read:
“It is better to be vaguely right
than exactly wrong”
Logic, deductive and inductive (1898), p. 351