The Council’s preference for viability assessments is to utilise the Development Viability Model (DVM) produced by consultants Burrows-Hutchinson Ltd. which can be made available to developers, site promoters, or any other individual/organisation, for the purpose of undertaking a financial viability appraisal (FVA) of a proposed development. The DVM has been created as a comprehensive, user-friendly model that can be used by site promoters and decision makers for the purpose of assessing the financial viability of a development proposal.
The DVM is a ‘site-specific’ appraisal tool that has been produced to work with Microsoft Excel for Office 365, running on Microsoft Windows. Further details on the specifications of the DVM are set out in the User Guide, which can be downloaded here. Each copy of the model that is issued by the Council will be ‘locked’ to relate to a specific development site. The same copy of the model can, however, be re-used to assess more than one proposed scenario for development of that specific site.
The DVM is an appropriate tool for submitting required viability assessments in support of the RLDP Second Call for Candidate Site submissions. National Guidance in Planning Policy Wales (PPW12), requires that when submitting Candidate Sites ‘land owners/developers must carry out an initial site viability assessment and provide evidence to demonstrate the financial deliverability of their sites’(PPW12).
The Council can make the DVM available to developers, site promoters, or any other individual/organisation, for the purpose of undertaking a financial viability appraisal (FVA) of a proposed development. The model will be released subject to the Council receiving payment of a standard fee.
The standard fees that will apply cover the Council’s administrative time necessary to personalise and issue the model for the specific site, as well as officer time required to carry out a high-level review of the submitted FVA for a Candidate Site. A tiered fee structure applies, which is based on site size and scale. The fee will be determined by the Council having regard to what it considers to be an appropriate number of residential units that could reasonably be accommodated on the site. This tiered approach to fees recognises that the scale and scope of a development proposal will influence the amount of officer time likely to be required to carry out a high-level review of a completed DVM submitted.
The standard fee schedule is as follows (all charges are subject to VAT and may change over time):
- Sites of 1-9 units or mixed use comprising gross floor space <1000 sqm or site area < 0.5 hectares: £195 plus VAT (£234 at 20% VAT)
- Sites of 10-50 units or mixed use comprising gross floor space ≥1000 but <2000 sqm or site area ≥ 0.5 hectares but <1.0 hectare: £345 plus VAT (£414 at 20% VAT)
- Sites of 51-100 units or mixed use comprising gross floor space ≥2000 but <10,000 sqm or site area ≥ 1.0 hectare but <10 hectare: £495 plus VAT (£594 at 20% VAT)
- Sites of more than 100 units or mixed use exceeding 10,000 sqm floor space or 10 hectare site area: cost (not exceeding £7500 plus VAT) to be agreed by officers depending on size and complexity of proposal. It is highly unlikely that a scheme will be of sufficient size to reach this cap.
Please note that the above fees relate to DVM submissions in support of RLDP Second Call for Candidate Sites. The DVM can however also be used as a tool to evidence the financial viability of a development proposal at the planning application stage. Please contact the team via email at planningpolicy@monmouthshire.gov.uk if you wish to discuss further the use of the DVM for this purpose, including information on the fees that will apply.
The high-level review that the Council will undertake of a completed DVM submission in support of a Candidate Site will check the appropriateness of the information provided by the site promoter as part of the appraisal. This process will also ensure that the cells in the DVM’s spreadsheets have been appropriately completed. The review will consider whether:
a) evidence supplied to support costs and values used in the submitted FVA is sufficient and proportionate;
b) the suggested timescale for the development is realistic; and
c) the FVA accords with policy requirements of the Council and with other guidance and/or policy statements that are pertinent to the assessment of Viability in a Planning context.
Following completion of the high-level review, the Council will issue a simple statement to the site promoter to indicate the extent to which it considers the submitted FVA meets the tests outlined above. It is stressed that the standard fee schedule above covers the release of the model and high level review at the Second Call for Candidate Sites Stage and does not allow for any time that a site promoter might wish to spend debating the findings of the Council’s initial high-level review. Additional fees may apply in instances where further officer time is necessary as a result of the site promoter entering into further exchanges with the Council relating to the initial appraisal submitted, and/or if the supporting evidence submitted is insufficient and requires re-submission. The Council may need to call upon Chartered Valuation Surveyors or draw upon the expertise from a third party, for example where it is necessary to undertake comprehensive assessments of abnormal costs submitted. The cost associated with this would need to be met by the developer/site promoter, and the Council will discuss such costs if and when additional work is required.
The Council recognises some information required to demonstrate viability may be considered by the site promoter as commercially sensitive. However, as stated in the Welsh Government’s LDP Manual, this issue of sensitivity is not a sufficient reason to avoid providing the appropriate evidence (LDP Manual, para. 5.96). Each submitted FVA will not be made publicly available, and will be treated as confidential between the Council and the person or organisation that has submitted it. The primary purpose of the FVA is to demonstrate whether or not a development proposal and/or proposed site for allocation is likely to be “viable”. Where it may be either necessary or appropriate for information from an FVA to be released as evidence, for example to support a specific site allocation in the Council’s LDP, the Council will discuss with the site promoter the extent to which such information may be released.
A detailed User Guide has been produced to describe how the DVM works; and to set out the information that the user is required to input in each of the relevant cells.
Each copy of the DVM also incorporates a “Quick Guide”, which is aimed at those undertaking an assessment of a purely residential development site not significantly in excess of 5 acres (2 Hectares).
Users are also advised that ‘Help Notes’ are built into the model, embedded within the worksheets themselves, which remind the user what to do on each sheet.
A number of ‘how to’ videos are also available on the use of the model. These are provided as another means of helping the user understand how the DVM works in a step by step guide.
To obtain a copy of the model for a specific site, and/or to discuss matters relating to the DVM more widely, please contact the Council on planningpolicy@monmouthshire.gov.uk