RICS Guidance on Viability in Planning

The RICS has issued new guidance for financial viability assessments in planning (FVAs).  The new guidance supports the aims set out in the NPPF and PPG in trying to ensure developers commit to adequate infrastructure and affordable housing levels, irrelevant of the cost of land.

Developer contributions are a contentious topic, with many developers arguing that requirements to provide contributions and affordable housing are stunting development potential. The guidance seeks to overcome the circularity created by the previous guidance issued in 2012 whereby developers used high land prices to justify low developer contributions and low developer contributions leading to higher land pricing.

In line with the NPPF and PPG, the emphasis is on viability being established at the plan making stage via typology and strategic site testing.

The new guidance seeks to make it clear that planning contributions should be part and parcel of the development equation and not negotiable at the decision making stage where an up to date plan is in place.

Whilst the new guidance doesn’t completely rule out viability arguments at the decision making stage, listing a number of circumstances where viability arguments might be put forwards, the onus is firmly on the developer to justify their case with no compunction on the decision maker to accept such arguments.

To read more of our Viability Team’s takeaway from the RICS guidance, click here.

Debbie Lloyd

Development Consultant