- Applicants should take account of Development Plan policies when developing proposals and acquiring land. It is expected that viability testing should normally only be undertaken on a site-specific basis where there are clear circumstances creating barriers to delivery.
- If an applicant wishes to make the case that viability should be considered on a site-specific basis, they should provide clear evidence of the specific issues that would prevent delivery, in line with relevant Development Plan policy, prior to submission of an application.
- Where it is accepted that viability of a specific site should be considered as part of an application, the borough should determine the weight to be given to a viability assessment alongside other material considerations. Viability assessments should be tested rigorously and undertaken in line with the Mayor’s Affordable Housing and Viability SPG.
- When setting policies seeking planning obligations in local Development Plan Documents and in situations where it has been demonstrated that planning obligations cannot viably be supported by a specific development, applicants and decision-makers should firstly apply priority to affordable housing and necessary public transport improvements, and following this:
- Recognise the role large sites can play in delivering necessary health and education infrastructure; and
- Recognise the importance of affordable workspace and culture and leisure facilities in delivering good growth.
- Boroughs are also encouraged to take account of part D in developing their Community Infrastructure Levy Charging Schedule and Regulation 123 list.
The purpose of planning is the delivery of sustainable development, and the statutory basis for this is the plan-led system. The policies in the London Plan have been subject to a viability assessment which has tested the cumulative impact of relevant standards, obligations and requirements to ensure they do not put implementation of the Development Plan at serious risk. Local Development Plan Documents are also subject to viability testing. Therefore, applicants should take account of all relevant Development Plan policies when forming their proposals and when acquiring land. Land owners should also take account of these requirements when applying for planning permission or selling sites.
The assessment of viability on a site-by-site basis has caused uncertainty, increased land prices and undermined the delivery of Plan objectives. There are inherent difficulties in the assessment of viability at the application stage given input uncertainty and the sensitivity of viability appraisals to small changes in assumptions. There is also a risk that site-specific viability testing is used as a device to reduce planning requirements and enhance commercial returns, even where genuine barriers to delivery do not exist.
To avoid these issues, it is expected that the testing of viability of a specific scheme should only be necessary where there are clear barriers to delivery that would make the delivery of obligations unviable. This will speed up the planning process and increase certainty for applicants and planning authorities, whilst supporting the implementation of planning policies and the delivery of sustainable development.
In setting Local Plan policies and associated guidance, boroughs should consider whether there are circumstances in which it may be acceptable to review the viability of a development on a site-specific basis. These may include circumstances where an applicant is required to provide significant infrastructure improvements to facilitate delivery of a development (beyond the level that would typically be required for the scale of development) or where the value generated by a development would be exceptionally low.
If an applicant wishes to make the case that viability should be considered on a site-specific basis they should inform the borough, and Mayor where relevant, prior to submission of the application. Evidence should be provided of the specific issues that would prevent delivery in line with relevant Mayoral and borough policies and guidance. The application should be determined in accordance with the Development Plan, with the decision-maker determining the weight to be given to viability alongside other relevant material considerations.