Development appraisals Lv1 Flashcards
What is CIL?
Community Infrastructure Levy is a charging schedule, published by local authorities based on location, development type and the charge per m2
What is S106?
“Flexible tariffs based on a broad policy
e.g. for developmentd fo more than 15 houses, 40% must be affordable housing
3 criteria:
Necessary to make development acceptable in planning terms
Directly related to development
Fair and reasonable in scale and kind “
What are the differences between CIL and S106?
S106 are put in place to make it possivle to approve a planning proposal whereas CIL is a general levy on all development designed to riase funds
How can a development appraisal be used in valuing developments?
Gross development value - development cost = developer’s profit. Viability
“Tell me about planning/costs/GDV/individual site elements in relation to
a development appraisal?”
These are development costs (build cost, Land value, professional fees, bank fees, letting/sale costs, contingencies, finance costs, planning Obligations)
What is a Monte Carlo simulation?
This is a mathematical technique that predicts possible outcomes of an uncertain event
What is a sensitivity analysis?
Reappraisal with one factor altered
How do you carry out a sensitivity analysis?
Using Kel Delta sensitivity analyisis
What variables might you change and why?
I used sensitivity anaysis by changing factors for example the build costs and sales value, capitalisations and yield
“Tell me about your understanding of RICS Financial Viability in
Planning/Valuation of Development Property.”
“Viability
viability in a national planning policy context
National planning policy framework
CIL regulations
Use of viability apprasails
Appraisal framework
Definition of Site value
How to use viability assessments to aid professional judgement
What to include in a viability assessment “
What is an S curve?
Repayment model = quick & easy, half of the interest rate or half the period to reflect staggered draw down
“Tell me about your due diligence when undertaking a development
appraisal.”
Physical inspection of the site and related enquiries e.g. flood risks, rights of way, geotechnical, contamination
How do you calculate developer’s profit?
GDV- (build costs + land value + professional fees + bank fees + Letting and Sale costs + contingencies + Finance cost + Planning obligations)
“What is the difference between a residual valuation and a development
appraisal?”
DA measures development profit, Residual is the reisdual land value. GDV - costs including profit
Tell me about software you have used.
KEL Delta
