Developer return assumptions

Potential risk is accounted for in the assumed return for a developer within a viability assessment. It is the role of developers, not plan-makers or decision-makers, to mitigate these risks. Although it is acknowledged that the level of return required will vary from scheme to scheme, dependent on the different risk profiles and the stage in the economic cycle, and that overall returns may be balanced by a developer over a number of development sites, it is necessary in the viability assessment process to use a standardised return. In the majority of cases, the assumptions outlined in Figure 4.3 below should be used: Figure 4.3: Developer return assumptions Type Cost Measure Social housing 6% of base costs All other cases 15% of Gross Development Value (GDV)