Development Viability Model (DVM)

The Authority has worked alongside Town Planning and Development consultants Burrows-Hutchinson Ltd, in partnership with other Councils across the region, to establish the Development Viability Model (DVM) assessment tool. The DVM has been created as a comprehensive, user-friendly model for the purpose of assessing the financial viability of a development proposal. It 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 downloaded below.

The DVM is a ‘site-specific’ appraisal tool. Each copy of the model that is issued by the Authority 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 endorsed by the Authority as an appropriate tool for submitting required viability assessments in support of LDP ‘Candidate Site’ submissions.  National Guidance in Planning Policy Wales (PPW), 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” (PPW, para 4.2.19).  

The Authority 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 Authority receiving payment of a standard fee. 

The standard fees that will apply covers the Authority’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 Authority 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 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 – £195

Sites of 10-50 units – £345

Sites 51-100 units – £495

Sites of more than 100 units – £cost to be agreed with Authority depending on size and complexity of proposal

Please note that the above fees relate to DVM submissions in support of LDP Candidate Sites.   The DVM can also be used as a tool to evidence the financial viability of a development proposal at the planning application stage. Please contact the Authority on ldp@beacons-npa.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 Authority 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:

  1. evidence supplied to support costs and values used in the submitted FVA is sufficient and proportionate;
  2. the suggested timescale for the development are realistic; and
  3. the FVA accords with policy requirements of the Authority 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 Authority 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 abovecovers the release of the model and high level review at the Candidate Site Stage and does not allow for any time that a site promoter might wish to spend debating the findings of the Authority’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 Authority relating to the initial appraisal submitted, and/or if the supporting evidence submitted is insufficient.  As the Authority’s Revised Local Development Plan (RLDP) moves towards the Deposit Stages, the evidence base will evolve, providing further clarity on the potential requirements of the RLDP, such as the likely level of S106 contributions that will be sought. This emerging evidence may require a re-assessment of viability by the developer/site promoter to determine if a site is viable and can meet the requirements of the emerging evidence base. The Authority may need to call upon its Chartered Valuation Surveyors or draw upon the expertise from a third party i.e. the District Valuer (DV) especially in relation to, for example, assessing abnormal costs. The cost of reviewing the updated viability assessment would need to be met by the developer/site promoter, and the Authority will discuss such costs if and when additional work is required.

The Authority 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 Authority 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 Authority’s LDP, the Authority will discuss with the site promoter the extent to which such information may be released.

A detailed User Guide (or instruction manual) has been produced to describe how the DVM works; and to set out the information that the user is required to input in the relevant cells. It is available via this link. 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.

Also provided are links to some ‘how to’ videos 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 Authority on ldp@beacons-npa.gov.uk

1. Project Introduction

2. Resi Overview

3. Resi Elements

4. Costs incl Land

5. Appraisal and Cashflow