NPPF para 58 mechanic
NPPF Dec 2024 para 58 retains the position that policy-compliant tariffs are presumed deliverable unless viability is demonstrably an issue [NPPF (Dec 2024)]. The burden is on the applicant. Viability cases that simply assert a deficit without RICS FVP-compliant working will be rejected.
Residual land value versus benchmark land value
Residual land value (RLV) is calculated as GDV minus build cost, fees, finance, contingency, profit and S106 / CIL load. Benchmark land value (BLV) is the existing-use value plus a landowner premium, capped under RICS FVP guidance [RICS Financial Viability in Planning]. Where RLV is below BLV at the policy-compliant load, the contribution shortfall is the viability case.
Threshold-test profit
Typically 15% to 20% on GDV for development-finance-backed schemes. Build-to-rent and bespoke schemes may run lower because finance terms and exit assumptions differ. The threshold figure is negotiated with the LPA viability consultant; the policy default is the higher end of the published range.
Open-book review mechanism
Where a viability case reduces the contribution at consent, the LPA typically inserts an open-book review trigger: re-appraise at a defined milestone (50% sales, practical completion) and uplift the contribution if scheme economics outperform the original appraisal. Camden and RBKC are notable for late-trigger reviews.