Case Study Flashcards
What were the key pieces of planning policy (local and national) that impacted your advice in this case?
NPPF, Hambleton Local Plan.
Was the project impacted by the substantial economic changes that
occurred a month after your instruction?
September 2022 mini-budget occured. No it did not. This uncertainity is often accounted for in contingencies or profit level. I was due dillgent throughout the process and aware of the econimc projections of recession for the UK.
How did you cope with the economic uncertainty of Q4 2022 when
advising your client on scheme viability?
My role was to review the applicants apprisal. I advised that the profit levlel provided a buffer for this.
In your experience, are smaller schemes more or less likely to be viable
for affordable housing?
Completely dependant on the nature of the scheme and the site that is being developed. In my experince it’s a mix 50/50
What was the policy aspiration for affordable housing tenure split?
Did you consider a Payment in Lieu of affordable housing?
Affordable housing tenure split is defined in the hambleton local plan. 25% first homes. remaining 55% S/O 45% IR. In this scernio the applicant did not put foward a policy compliant scheme. I present the client the results as a surplus on scheme.
How did you determine that a profit of 17.5% was reasonable?
Did you differentiate between profit levels on affordable vs market
I had consideration to providing a blended profit rate, I often use 20% Market housing. 7-8% affordable. In this case a policy compliant scheme was not provided.
Did you cross-check your residual land value against other development
land transactions? Why/ why not?
I used EUV + as per policy
Did your appraisal include any allowances for VAT?
no
How did you calculate CIL?
I calculted CIL from the charging schedule within from Hambleton District Council. I think it was held within the local plan or possibly a SPD
What was included in the abnormal costs.
Abnormal costs were for the remedation works on the site, site clearance, demolition of existing dwelling etc
How did you determine a reasonable finance rate?
even though finance costs are dependant on the applicant, its ussaual to assume all costs will be debt financed. I agreeded with the 8% put forward.
What were the timescales inputted into your appraisal? How would these
have impacted residual land value?
The timesccales inputed by the developer were accepted, and effected the borrowing costs
What is the definition of EUV in this case? How does this differ against the Red Book definition of EUV?
EUV or EUV + is a method used in viability assessmnets. It disregards hope value & is not the price paid for the land. The + premium, a incentive for the landowner to relase the land .
The red book definition of EUV + is ‘existing use value’ (EUV) describes what property or land is worth in its current form. In other words, the price that it can be sold for on the open market, assuming it will only be used for the existing use for the foreseeable future. The difference is that EUV (NPPF) is not price paid and EUV (redbook) can be price paid, subject to proper marketing/arms length transaction etc
Was this a Red Book valuation? Why/ why not?
A viability report is a
non-Red Book valuation which is itself regulated by RICS guidance. It relies on a separate basis of valuation known
as the EUV+ which is then compared against the Market Value for the property as a development site to determine whether a scheme is viable
How did your inspection of the site impact your advice?
It confirmed the abnormal costs present on the site, helped inform my market revune review
What did you observe about location on inspection that influenced your
GDV?
I saw the development done by the applicant located adjacent to the subject property
