Through the Association of Planning Officers Wales, local planning authorities across Wales have worked in partnership alongside Town Planning and Development consultants Burrows-Hutchinson Ltd, to produce and distribute to all authorities an all-Wales version of the Development Viability Model (DVM) assessment tool. The DVM has been created as a comprehensive, user-friendly model that can be used for the purpose of assessing the financial viability of a development proposal. This model is used to help make decisions on certain planning applications or site allocations in the Local Development Plan.
The DVM is endorsed by the Authority as an appropriate tool for submitting required viability assessments in instances where the viability of a development is questioned at the planning application stage.
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.
What is the purpose of assessing the financial viability of a development?
The main purpose of the financial viability appraisal (FVA) is to show whether a proposed development is likely to be “viable”, in terms of providing affordable housing, on site or off site (as a commuting amount).
Development Policy 30 of the Eryri Local Development Plan – “If it can clearly be demonstrated that the above indicative affordable housing targets cannot be met due to site viability, or could be exceeded in some cases, the Authority will negotiate an appropriate affordable housing contribution on individual sites, which could include an appropriate commuted payment.”
Further advice can be found in Supplementary Planning Guidance 4: Affordable Housing. Paragraph 9.28 in particular states – “It is for the applicant to provide convincing evidence that demonstrates unviability when submitting an application. A financial viability appraisal will need to be provided by the Applicant to prove the case regarding the unviability of providing affordable housing. Any evidence would be considered on a site-by-site basis.”
Who can access the Development Viability Model (DVM)?
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.
What are the relevant fees?
A tiered fee structure applies, which is based on site size and scale of the development. The standard fees cover 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.
Viabiltiy challenges during the determination of a planning application- DVM submission to evidence the financial viability of a development
- Sites with 1- 9 units: £850
- Sites with 10-19 units: £1050
- 20+ Dwellings: By Agreement
All charges are subject to VAT
Additional fees may apply if more officers’ time is required as a result of the site promoter carrying out further discussions with the Authority relating to the initial appraisal submitted, and/or if the supporting evidence submitted is insufficient.
The Authority may need to call 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 Authority will discuss such costs if and when additional work is required.
How does the Authority assess a DVM submission?
The Authority will carry out a high-level review of a completed DVM submission and 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:
- evidence supplied to support costs and values used in the submitted FVA is sufficient and proportionate;
- the suggested timescale for the development are realistic; and
- 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 statement to the site promoter/agent/applicant to indicate the extent to which it considers the submitted financial viability appraisal meets the tests outlined above.
How do I request a DVM?
Should you need to undertake a Development Viability Appraisal for your development, you should contact the relevant case officer who has been assigned to your planning application.
A member of the team will provide you with details on how to pay and the processes on issuing the model to you.
Will my DVM submission be a public document?
We recognise that 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.
How to do I complete the DVM submission?
A detailed DVM 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. Each copy of the DVM also incorporates a ‘Quick Guide’, which is aimed at those undertaking an assessment of a purely residential development site of no more than 5 or 6 acres. ‘Help Notes’ are also built into the model, embedded within the worksheets themselves, which remind the user what to do on each sheet.
Below 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.