NPPF 2026 viability mechanic (Policy DM5)
The Aug 2026 NPPF rewrote the framework into lettered plan-making and decision-making policies, so the old paragraph 58 no longer exists. Viability is now resolved primarily at plan-making. At the decision stage, Policy DM5 assumes a scheme complying with up-to-date contribution policies is viable [NPPF (Aug 2026)]. A site-specific viability assessment is admissible only in defined circumstances: a development type or site materially different from what the plan viability evidence tested, demonstrable costs the plan evidence did not account for, or a significant change in economic circumstances such as a recession. Ordinary movements in build cost, GDV or interest rates cannot reopen the plan assumptions. The burden stays on the applicant, and cases that assert a deficit without RICS FVP-compliant working will be rejected.
Residual land value versus benchmark land value
Residual land value (RLV) is calculated as GDV minus build cost, fees, finance, contingency, profit and S106 / CIL load. Benchmark land value (BLV) is the existing-use value plus a landowner premium, capped under RICS FVP guidance [RICS Financial Viability in Planning]. Where RLV is below BLV at the policy-compliant load, the contribution shortfall is the viability case.
Threshold-test profit
Typically 15% to 20% on GDV for development-finance-backed schemes. Build-to-rent and bespoke schemes may run lower because finance terms and exit assumptions differ. The threshold figure is negotiated with the LPA viability consultant; the policy default is the higher end of the published range.
Open-book review mechanism
Where a viability case reduces the contribution at consent, the LPA typically inserts an open-book review trigger: re-appraise at a defined milestone (50% sales, practical completion) and uplift the contribution if scheme economics outperform the original appraisal. Camden and RBKC are notable for late-trigger reviews.