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What happens after you submit Heads of Terms?

What happens after you submit Heads of Terms and how contributions are decided

IN THIS ARTICLE

  • What happens after you submit Heads of Terms
  • Who the Development Team are
  • What contributions are required
  • What is Development Viability

Once a pre-application or planning application is submitted it'll be placed on the agenda for discussion at the corporate "Development Team" meetings.

Who are the "Development team"?

The Development Team is a group of stakeholders with an interest in major developments.

Bringing together this group ensures that all sectors and stakeholders with legitimate land use planning interests are involved in the process of identifying (based on evidence) and setting the various requirements and contributions to be secured.

It also allows obligations to undergo a robust level of scrutiny before any agreements are progressed further.

What contributions are required?

If no Heads of Terms have been offered for a major development proposal then the Development team will set out the list of all the contributions that will be required.

This'll be reported back to you and/or your agent by the case officer handling the enquiry or application.

Any deviation from the list of planning obligations required can only be agreed by returning back to a later "Development Team" meeting, therefore if there are disagreements over the level of contributions being sought this may delay the progress of any planning application.

If agreement can't be reached this may form a reason for refusal of planning permission.

If you or your agent have offered proposed Heads of Terms as to what they are offering in terms of planning obligations that will mitigate the impact of their development then this offer will be considered by the Development Team.

Again, their conclusions will be reported back to the developer by the case officer.

However, the discussions will be further advanced by having seen the Heads of terms and should speed up the process.

If there is a significant gap between what a developer is offering, and what we would require as a Planning Authority, then we will ask for an independent viability assessment in all cases.

Once Heads of Terms is agreed, any application made for the development can proceed through the decision making process.

Provided all other planning issues are also acceptable it would be expected that officers could support the application.

It's worth noting that all planning obligations are subject to Committee resolution to grant planning permission where there are planning obligations being sought and only once the Planning Committee vote to approve an application will the completion of a Section 106 Agreement be carried out. What's this?

Development Viability

The viability of a development scheme has been given greater emphasis in recent years due in most part to an uncertain housing market and the withdrawal of grant funding for affordable housing.

The now defunct Circular 05/2005 acknowledged that it may not always be feasible for a proposed development to meet all the requirements set out in planning policies and still be economically viable. Therefore we will have regard to development viability.

Applicants are advised to raise the issue of unviability at the earliest possible stage in the planning process to enable us to undertake a financial appraisal of the scheme and consider positive changes such that the site may come forward for development.

Some useful information is set out by RICS, who published a "Financial viability in planning" guide (August 2012) to provide a framework for developers. "Viability" is defined by this guidance as:

"An objective financial viability test of the ability of a development project to meet its costs including the cost of planning obligations, while ensuring an appropriate Site Value for the landowner and a market risk adjusted return to the developer in delivering that project".

Site Value, either as an input into a scheme specific appraisal or as a benchmark, is defined in the guidance note as follows:

"Site Value should equate to the market value subject to the following assumption: that the value has regard to development plan policies and all other material planning considerations and disregards that which is contrary to the development plan".

Where we need independent advice to validate an applicant's viability appraisal we will expect that the reasonable costs will be met by the developer/applicant in order to independently test their case.

An independent consultant, appointed by us, will provide neutral advice to assess the information submitted.

Applicants will be required to provide information on matters such as estimated sales values, existing or alternative use value and to build costs and providing sufficient information to substantiate these figures.

Viability appraisals is an iterative process and in such cases it is for the local planning authority to decide which planning aspirations (including but not limited to affordable housing percentage and tenure, planning obligations, market housing mix, density) are more essential and determine the application based on these considerations.

In some cases the planning authority will be unable to support a scheme, despite having undertaken a robust viability appraisal, due to the proposal failing to create a sustainable mixed and balanced community.

Early discussions and an open, transparent collaborative approach are essential to a smooth planning process.

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