We recently held two workshops for groups we’re working with on finding a site and running a development appraisal. These activities sit at the heart of the development process and continually inform one another.
Finding a Site
The first workshop focused on what to look for and how to secure a site.
Firstly, it’s important to set a site criteria which will help you be clear on what you are looking for and why. As a group, it’s good to focus your search whilst being flexible to opportunities as they arise. The best way to search for a site is to walk or cycle around an area. Make sure you record any site or properties on a map, either digitally or physically.
Checking online maps adds a further understanding of the site and can pick up anything you may have missed on the ground. In the workshop, each group used a site search tool called LandInsight to assess sites they have been looking at. We looked at site ownership, its planning history and the comparable sale values.
We then discussed what an offer strategy looks like. Once you are invited or feel it is appropriate to make an offer, it is important that the offer is credible. All landowners will expect that an offer can proceed and proof of funding in place.
The outcomes of the site finding workshop, fed into the development appraisal workshop. A development appraisal helps check that the cost of the development is reasonable and that the project is viable. Assessing and evaluating a development is not just a one-off task, it’s a continuous process which needs constant monitoring and revisions, typically on a spreadsheet.
Our aim was to simplify what can be a daunting exercise, by explaining the different inputs of every development appraisal. We clearly identified the relationship between income and costs and how this is reflected in risk and return. Our groups looked at two examples, the first a private developer appraisal and the second, a community led appraisal. We then looked at how they can differ from each other depending on their exit strategies.
Through the Advice and Feasibility Fund, we’ve funded a number of groups to commission viability modelling which they can use to test different scenarios.
All groups can benefit from detailed financial viability modelling from consultants. The assumptions in the appraisal are important and they should be carried out by experienced valuation surveyors. As a client, you need to understand how they arrived at different costs as the decision to proceed and carry the risk, ultimately rests with you.
We have listened to the feedback from the groups who participated in the workshops and will be running further sessions in 2020. If you would be interested in attending, please contact email@example.com
Insightful and stimulating morning, learning about Development Appraisals with other #communityledhousing initiatives! This ongoing capacity building effort of @CLHLondon empowers us to understand every single step ahead of us, thank you!!! #CLT #SustainableHousing pic.twitter.com/sr4Am6DZuG
— Community Assets for Society & Housing (@ldncash) September 21, 2019