03 Jul 19 by Stephen Maycock
With build costs expected to rise on average by 3.2% a year over the next 3 years (BCIS) and house price growth reportedly beginning to level out as supply increases and concerns over the impact of Brexit continues to cause hesitancy, we are likely to see a further squeeze on the viability of development projects.
EVA’s are central in the development process and a link between satisfying planning policy and delivering viable development. The assessment is carried out in the form of an appraisal and recommendations report to the Local Planning Authority that establishes whether a scheme is ‘optimal’ i.e. provides an appropriate mix and type of housing, the value (GDV) of a proposed scheme, the associated costs of developing the property, the development risk and effect of policy compliant obligation. The different types of planning obligation vary from Local Authority and location/nature of site.
The appraisal method is used to assess either the level of return or site value which is then benchmarked having regard to local market evidence. The viability exercise ultimately determines the level (%) and split (tenure mix) of affordable housing (or off-site contribution) and amount of community contribution (£) that can viably be supported on a scheme.
Seeking professional advice early is important not only in ensuring a scheme is viable but will help avoid delays and untenable planning agreements that threaten the deliverability and success of projects.
EVA’s are only as good as the information used. With offices across the region and a mix of Valuation Surveyors, Building Surveyors and agents active in the market, we are well placed to assist developers and landowners in providing EVA’s and other appraisals.
For further information please contact a member of the development team.