Viability

An RLV is a process for valuing land with development potential. RLV can be used in several ways:

• By calculating the potential receipts (known as Gross Development ValueGDV) from the development, less the development costs (including planning contributions, interest payment and the minimal level of profit required), RLV can be used to calculate what price could be paid for the land.
• By calculating the potential receipts (GDV) from the development, less the development costs (including planning contributions, the cost of the site and interest payment), a RLV can be used to calculate the level of profit that the scheme would generate.
• By calculating potential receipts (GDV), less development costs (including the cost of the site, interest payments) and the required level of profit, a RLV can be used to calculate the amount of money available in the scheme to make planning contributions. For the purpose of discussions around the viability of a housing scheme, this way of setting out an RLV is likely to be most useful: Total Development Value (TDV) of the site MINUS All the Development Costs (including a return for the developer and the cost of land) LEAVES The amount available to pay for Section 106 Planning Obligations (and Community Infrastructure Levy) contributions