Development Appraisals

Question 1

What is CIL?

Answer 1

Community Infrastructure Levy.
A payment made to the LPA in order to obtain planning permission to raise funds infrastructure improvements to support new development.
Based on a formula, relating to the size of a development based on net floor space.
Can be educational centres, roads, flooding issues

Question 2

What is a S106?

Answer 2

A legally binding agreement, required before consent is granted. Negotiated and case by case.
Community gain, specific works or a payment to LPA. New school, community facility, open space/

Question 3

What are the differences between a CIL and S106?

Answer 3

S106:
- case by case
- site specific charge
- negotiation, no fixed formula
- specific use, either providing something or capcon
- can be used to secure affordable housing

CIL
- Formula to work figure out.
- charge can cover the whole area.
- fixed cost
- can be used for anything.
- Cant be used to secure affordable housing

Question 4

How can a development appraisal be used in valuing developments?

Answer 4

It can be used to determine the residual site value or the residual development profit, and other outputs.

Question 5

Tell me about planning in relation to a development appraisal?

Answer 5

Planning costs can include:
- s106
-CIL
- S278
- Planning Consultancy fees
- Planning Application fee
- % of affordable housing
- Provision of open space/playground and public space

Question 6

Tell me about costs in relation to a development appraisal?

Answer 6

Costs associated with a development appraisal include:
Site Clearance
Planning
Construction Costs
Professional Fees
Contingency
Marketing

Question 7

Tell me about GDV in relation to a development appraisal?

Answer 7

GDV is the gross development value. Market value of proposed development, assuming up and built on valuation date in current prevailing market conditions.

Question 8

Tell me about site clearance in relation to a development appraisal?

Answer 8

Could include:
- Demolition
- Remediation
- Clearance
- Landfill tax
- Lvelling
Provision of services

Obtain a contractors cost plan for these.

Question 8

What is a Monte Carlo simulation?

Answer 8

Models probability of different outcomes, using software such as ‘crystall ball’

Question 8

What is a sensitivity analysis?

Answer 8

Calculations resulting from the residual appraisal, involving one or more variables that are varied to show the differing results.