Development viability

Development viability forms an integral part of the planning process where Financial Viability Assessments (FVA) are carefully assessed to ensure maximum viable levels of contributions are being achieved for local residents.  The planning department holds dedicated internal development viability expertise to provide market leading advice where developer contributions fail to meet policy requirements.

The outcome of viability testing is to maximise affordable housing for residents, to assist with existing pressures on the housing waiting list and to promote the creation of mixed and balanced communities, considering economic viability in plan-making and determining planning applications.

Tower Hamlets Development Viability Supplementary Planning Document (SPD)

The development viability SPD offers guidance on applying Development Plan policies in the context of development viability for planning applications, prioritising sustainable development and providing clarity to applicants and the public. Applicants are encouraged to use this as a frame of reference in preparing their submissions.

Development Viability SPD

An error has been noted in the existing SPD. Please check the correct wording of the formulae in the amended Development Viability SPD.

SPD Error

A notable error has been identified (Formula 3) to calculate the additional financial contribution payable to the council. In calculating the Developer’s profit on the surplus GDV the previous formula wanted to compare the GDV with build costs.

This was inaccurate and the gross development value is to be compared. Component ‘G’ has since been replaced with ‘C’ in the SPD. The revision is consistent with the Mayor of London’s Affordable Housing & Viability SPG.

Incorrect formula:

P = (A + B – G) * YDeveloper profit on surplus GDV (£)

Revised corrected formula:

P = (A + B – C) * YDeveloper profit on surplus GDV (£)


A - GDV achieved on sale of at least 75 cent of residential units and GDV from other parts of the development sold / let and other income receipts.

B - Estimated GDV for parts of the development that are yet to be sold/ let and other income sources.

C - This includes

  • Application Stage GDV as determined at the time planning permission was granted or
  • Where it was agreed at application stage that there was a deficit against the BLV, a ‘breakeven’ GDV can be used, i.e. the application stage GDV can be inflated to the extent of the agreed deficit.

G - Total build costs determined as part of the assessment of viability at time planning permission was granted (or as determined in previous Review - e.g. early review).

Y - Developer profit as a percentage of GDV (per cent)

When is a FVA required?

Residential or mixed-use development which are seeking planning permission without offering the policy requirements of developer contributions must submit a FVA for review by the Council under the Viability Tested Route (VTR). Schemes which do satisfy planning policy in terms of developer contributions may proceed without submitting an FVA and progress under the Fast Track Route (FTR).  

All FVA’ s submitted to the council will be made publicly available, including reviews undertaken by the Council (or external consultants). Developers are to reasonably expect this to be the case. Should an applicant be of the view any information should not be made publicly available, a formal case must be submitted with their FVA to justify their reasoning. This will be determined and assessed against the public interest test and a determination will be made. 

Viability Procedure Practice Note 

Applicants must review the procedure the council will follow when applications are made for viability purposes. The practice note outlines the process where viability is a consideration at all stages which includes pre-application, application stage and at the point of future reviews. 

Public Sector Consultancy

In an overarching ambition to assist the public sector in reaching their borough’s housing targets, Tower Hamlets Viability (THV) now offer a full range of services that provides viability advice to fellow planning authorities as part of planning applications. Sufficient capacity has enabled the team to undertake external work which will begin the formation of a resilient public sector position. Services may be procured via a framework set up by individual boroughs or alternatively through Request for Quotes (RFQs) as part of individual tender submissions. THV will seek to procure/subcontract specialist cost consultants that feed into any submissions as instructed.

Services include

  • Pre-application advice
  • Application stage FVA reviews
  • S106 negotiations
  • Review mechanisms
  • Committee attendance
  • Appeals/Inquiries as expert witnesses
  • Co-living, Build to Rent, small sites contributions, student accommodation, mixed-use development.

Contact details

Telephone: 020 7364 5009 (Lines open between 9am-1pm, Monday-Friday)