RCA Regeneration confirm savings for its developer clients have now exceeded £15,900,000 (since Jan. 2022), unlocking previously unviable sites through Financial Viability Assessments negotiations with local authorities.
With ever-volatile build costs and uncertainty around values in a post-covid era, development viability is increasingly becoming of paramount importance to our developer clients. We find particularly with those developers taking on challenging brownfield sites, with unknown demolition and remedial costs, that viability is halting deliverability. With pressure on developers to deliver Affordable Housing and financial contributions to communities, the addition of remedial works results in negative land values. In this case, no one is the winner; derelict land remains a blot on communities and developers see no return on their investment.
A successful FVA submission is increasingly becoming the answer to unlocking land, maximising returns, and building better communities.
What is an FVA?
The murky waters of a Financial Viability Assessment can sometimes be unclear and difficult to navigate without the support of a specialist viability consultant. So, it is important to remind ourselves of the basics. In plain terms, an FVA can be submitted with a planning application where a developer does not believe financial contributions can be viably delivered. An FVA is concerned with a simple comparison between your site’s Residual Land Value (RLV) for a proposed scheme (being the difference between cost and revenue after development) and your site’s Benchmark Land Value (BLV) (typically the value of land in its existing use). If your RLV is below your BLV, your site is deemed unviable.
Where an LPA’s independent assessor deems your case to be justified and your site to be unviable, provisions for Affordable Housing and s106 contributions fall away. The difficulty is making a robust argument to an assessor and the devil is in the detail… this is where RCA have succeeded with our developer clients and have the record to show.
In the last 15 months, RCA Regeneration have saved developer clients £15,900,000, made up of both a capital sum of revenue towards policy compliant levels of Affordable Housing and s106 requests for; education, open space, sport, etc.
These are typically for schemes on challenging brownfield land or for 100% Affordable Housing schemes, that cannot viably deliver any further community benefit. A successful FVA can make these schemes viable.
How RCA can help you.
As members of the RICS and the RTPI, our team have a unique and fine grain understanding of the relationship between viability and planning. Acting for multiple LPA as assessors, RCA understand all angles of the planning viability battleground, and seek to pass the benefit of this expertise down to our developer clients.
Our bespoke appraisal models and access to the latest market data and build cost information, enable us to make robust cases that have saved our developer clients millions. We take pride in unlocking previously unviable sites and playing our role in the deliverability of your project.
As our team’s developer savings pass the £15.9m mark (since January 2022), we encourage our developer clients to seek our support and maximise returns on their projects by submitting an FVA with their planning application.
We offer a free initial assessment before determining whether or not an FVA is necessary and can offer our opinion on the strength of case, so do not hesitate to get in contact.
Talk to our team, call 01905 887686 or Email info@rcaregeneration.co.uk
