Viability assessments and the planning process
Viability assessments are used to evaluate the economic viability of a proposed development. See our guidance to find out more.
This guidance has been put together for applicants and agents to:
understand what information is needed for a viability assessment
how the process works
how the information will be held by us.
Applicants should note that any work or documents linked to viability should be prepared on the basis that they will be made publicly available.
Prospective applicants carrying out a viability assessment as part of a planning application process should be aware that:
- the impact of planning policies on development have been considered and are regarded as realistic, bearing in mind that viability assessment was undertaken in preparation of the emerging Local Plan
planning applications that comply with planning policies (including those of the emerging Local Plan) are assumed to be viable
it is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage.
Viability at pre-application stage
If viability is raised at pre-application stage:
there should be initial deliberation on the prospective circumstances to justify the need for undertaking viability assessment
should such assessment be initiated, we will expect viability to be tested with independent consultants (chosen by the Local Planning Authority) at a very early stage and pre-application submission.
Viability assessment submitted with a planning application
Where a viability assessment is submitted to accompany a planning application:
it is up to the applicant or agent to demonstrate whether particular circumstances justify the need for a viability assessment
it should be based upon and refer back to the viability assessment that informed the Local Plan; and the applicant should provide evidence of what has changed since then
it should reflect the government's recommended approach to defining key inputs as set out in National Planning Guidance.
National Planning Policy Framework
In line with the National Planning Policy Framework, "All viability assessments, including any undertaken at the plan-making stage, should reflect the recommended approach in national planning guidance, including standardised inputs, and should be made publicly available."
With regards to review mechanisms and policy compliance where contributions are reduced below policy requirements, government guidance is as follows:
"Plans should set out circumstances where review mechanisms may be appropriate, as well as clear process and terms of engagement regarding how and when viability will be reassessed over the lifetime of the development to ensure policy compliance and optimal public benefits through economic cycles.
Where contributions are reduced below the requirements set out in policies to provide flexibility in the early stages of a development, there should be a clear agreement of how policy compliance can be achieved over time. As the potential risk to developers is already accounted for in the assumptions for developer return in viability assessment, realisation of risk does not in itself necessitate further viability assessment or trigger a review mechanism. Review mechanisms are not a tool to protect a return to the developer, but to strengthen local authorities' ability to seek compliance with relevant policies over the lifetime of the project."
Paragraph: 009 Reference ID: 10-009-20180724
Please note viability assessments and associated documentation will be publicly available on our website. In accordance with government guidance, any viability assessment should be prepared on the basis that it will be made publicly available other than in exceptional circumstances. Even in those circumstances, an executive summary should be made publicly available.
It is up to the applicant to demonstrate whether particular circumstances justify the need for a viability assessment at the application stage. For examples of such circumstances, see National Guidance on Viability at Paragraph: 007 Reference ID: 10-007-20180724.