What Are Financial Viability Assessments?
For anybody pursuing any property development, having an understanding of whether this investment will serve you well enough on your return to warrant a follow-up is absolutely paramount. What exactly is a Financial Viability Assessment? How will it safeguard your investment, and how will it better your chances of success with your project? These are precisely the questions we hear day in and day out at Blackacre Surveyors, answered diligently and with knowledge of experience by our expert team.
Understanding Financial Viability Assessment
A financial viability assessment is a thorough financial review; the ultimate evaluation relates to whether your project for property development will produce enough returns to merit the investment. The House-Building Finance site also explains: an FVA is a detailed financial assessment of whether your proposed property development will make enough return to repay the cost. Our assessments at Blackacre Surveyors leave no stone unturned. We cover everything from construction costs and potential income to trends and finance.
In the end, we want to ensure that it is or will be valuable – valuable enough for you to survive, valuable enough for your investors to meet their obligations to their investors, valuable enough to not even have to raise the issue of whether you might be worth saving.
Key Components of a Financial Viability Assessment
A Blackacre Financial Viability Assessment covers several core areas:
Costs Analysis: We identify and cost up all the expenditures that we expect at the outset, including land acquisition, construction, material, labour, and planning obligations, such as affordable housing contributions.
Revenue Forecast: We estimate the income potential of your development.
Market Analysis: We will look at what has been selling or renting in your local market to provide you with an upfront projection as to whether your development will command a profitable rent or selling price.
Profit Margin: We determine the expected profitability of your project so your investment reaches considerable returns.
Why Are Assessments Crucial?
Informed Decision-Making for Developers
If you’re unsure the project will make any money once launched, the last thing you need is a pretty piece of paper, but instead an assessment of viability. Otherwise, all you risk is not attracting sufficient finance for feasibility, let alone at launch to take that idea all the way. If you don’t cover these aspects and, as a result, the money doesn’t complete the operation, you will find that you can’t take the steps you need to take to make it work. If any of that resonates with you, then do call us at Blackacre Surveyors, so you can also feel as sure as you can about the financial side of things.
Securing Investment and Financing
Investors and lenders might be willing to part with their capital only when given the assurance that your project is financially robust. FVAs from Blackacre Surveyors will give you that assurance and help to entice the finance you need to put your development into action. A robust FVA from Blackacre Surveyors could be the start of bringing your development to life.
Meeting Planning Obligations
An FVA can be a condition of planning permission imposed by the local authority to make sure that development will satisfy community obligations like affordable housing or infrastructure improvements. Blackacre Surveyors can confirm that your scheme will be viable, both financially and in relation to meeting planning obligations. We will make sure that unexpected costs or other surprises do not scupper your scheme.
Mitigating Financial Risks
While you and your team handle the day-to-day demands of your program, we at Blackacre Surveyors act as a detective who searches for problems that haven’t happened yet – problems such as swings in construction costs, delays, changes in projected demand, and so on. By identifying risks early, we equip you with the advanced warning necessary to adjust strategy, secure additional funding, or change course, ensuring a smoother development process.
When is Viability Assessments Needed?
While FVAs are normally a requirement during the planning application stage, these documents can help your project at different times in the development process:
Prior to buying the land, an FVA can help determine whether to purchase a piece of property.
To schedule the project: Are you assigning the right amount of money and manpower to the job? During the conceptual phase: Creatively and critically analysing a client brief in order to develop new ideas and concepts. Are the materials, design, and size of the building consistent with a financially sustainable outcome?…
Across all stages: A thorough FVA can secure construction financing by verifying the financial feasibility of the project. At the pre-consulting stage, An FVA examines whether the project functions properly. At the marketing stage, Superficial FVAs might attract visitors, but a comprehensive FVA is required to encourage them to stay. At the financing stage: A thorough FVA can secure construction financing by verifying the financial feasibility of the project.
Conclusion
From its inception, a Financial Viability Assessment at Blackacre Surveyors is more than a mechanism to assess viability against financial criteria: it is your route map. Through our holistic examination, we can help you avoid costly mistakes, meet your responsibilities as a developer under the National Planning Policy Framework, and ensure the eventually completed development scheme delivers the returns it should. Whether you are a developer or investor looking to commence building works on a site or simply looking to make a smart investment, a robust understanding of the financial feasibility of your proposal is key.
Is Blackacre Surveyors right for your next property development? Simply contact us at info@blackacresurveyors.com or give us a call at 0203 476 956 for our expert advice.