The Benefits of Marketing and Viability Studies in the Planning Arena

Proving viability when submitting a planning application can be key to getting to that all-important approval. Our latest blog explores the benefits of marketing and viability assessments within the context of planning applications…

Marketing and carrying out a viability exercise are important parts of the preparation when submitting a planning application – especially when one is proposing a use for an existing building that will result in the loss of an existing community facility, pub, leisure or employment space, for example.

It can also be a useful tool if a proposal has been refused – but as they say, fail to prepare, prepare to fail – so doing this ahead of time is always preferable.

Carrying out these exercises is also a useful way to identify any issues that might cause a problem – such as noise, light, traffic, parking and so on.

You may find that your local authority requires these as standard for any proposal that is affected as mentioned above, for change of use of an office or industrial building that is in employment use, or for any application that would involve the loss of a community facility.

So, what do they entail and who should be carrying these out?

To begin, you will need to employ the services of a qualified professional such as a chartered surveyor or planning consultant.

Marketing Campaigns

These individuals are likely to be required to provide both an independent valuation and proof of the time over which the marketing has been carried out, along with details of where the marketing has appeared – such as publications and the distribution areas of mentioned publications, as well as the details of any on-site marketing boards.

They will also have to detail any expressions of interest, for rental or otherwise, and reasons why offers have not been accepted. For occupied premises, it might be helpful if it is made clear why the occupier is leaving the building – for instance, showing that the current business or leisure use is not viable financially.

Your aim will be to demonstrate that there is no interest in continuing with the property’s current use, in order to show the local planning authority that your proposed development is preferable to an empty lot, and it is unreasonable to expect this to continue.

Marketing the site in its current form must be carried out to show that there is no interest in continuing in its present state. This is time consuming and can take months – and might even take as long as a year or longer, depending on the local authority’s policy.

Marketing can include listing the property with an estate/commercial agent, and the display of ‘for sale’ boards in a suitably prominent position. You will also have to make details of the site available – this is normally achieved via the company and third-party websites and direct mailshots related to a bespoke brochure. Details should include a description of floorspace, existing use, car parking, layout, location, terms of lease or sale, and so on.

The length of a marketing campaign will be determined by the local authority.

For an applicant, the objective is to show that following completion of a marketing campaign that meets all of the local planning authority’s requirements there is no interest in using the property for its authorised use (or, in the case of a property used for employment purposes, a different employment use falling under the broad terms of offices, light-industry, R&D, and general industry/warehousing) therefore a reasonable alternative use should not be prevented.

In the case of community uses and public houses the marketing campaign can be much longer and, with other uses that are acceptable to local planning authorities being more varied, it might not garner the hoped for results – if you are an applicant with intentions for using the property for an entirely new use, such as residential.

Viability Assessments

A viability assessment is used to show the economic viability of the proposed development. If a viability assessment is included with a planning application, it can be useful for influencing the requirements that a local authority might otherwise impose on the planned development. 

The National Planning Practice Guidance (NPPG) states that: ‘Viability assessment is a process of assessing whether a site is financially viable, by looking at whether the value generated by a development is more than the cost of developing it. This includes looking at the key elements of gross development value, costs, land value, landowner premium, and developer return’.

They are often used by housing developers to seek a reduction in the amount of affordable housing and or development obligations which would usually be required, according to the authority’s policies. For example, if you can show that having to provide 40% affordable housing within a development makes it financially non-viable, this can help your argument when negotiating a reduction.

It can also be used to gain an exemption from planning obligations that would usually be required, such as financial contributions to health, maintenance of open space, public art etc.

A viability assessment for the proposed new business should include the gross value of the development, costs involved, land value and expected returns to the developers and landowners. They should be prepared following the guidance provided by the Royal Institute of Chartered Surveyors. It should be noted however that such arguments must meet a high bar. In addition, viability reports will be subject to independent review, the cost of which is passed onto the applicant by the local planning authority, which will engage its own expert, who is often a third-party, outsourced consultant.

Apex Planning Consultants has recent experience of marketing and viability reports, achieving planning permission for non-employment uses within office/industrial buildings, and securing planning permission for a flatted development with no on-site affordable housing and a reduced off-site payment in lieu of such affordable housing.

If you would like to discuss your own new project with us, or just find out more about what we do, please continue to browse the website or drop us an email to: info@apexplanning.co.uk without obligation.