In an increasingly competitive development market, financial viability appraisals are becoming more important than ever to provide accurate figures that can be used in decision making by land owners, developers and planning authorities. By employing a RICS qualified practitioner you can be certain that industry standard practice is followed to ensure objective, unbiased professional advice. A financial viability appraisal can be used to determine the site values or the appropriate level of planning obligation that a development will support or the profit that can be achieved by a developer.
In every case a viability appraisal should analyse the relevant planning policy applicable to a particular site, consider both the positive and negative cashflow over the duration of the development, to produce a Net Present Value of the proposed scheme. These figures should then be manipulated using stress testing techniques, to see how they respond to any changes in assumptions and valuations. This in turn will provide robust information that can be relied upon to make solid investment decisions.