Glossary definition
Pre-Planning Risk
The risk that a development site fails to secure planning permission, or that the consent granted is materially different from the scheme envisaged, undermining the project's financial viability. Pre-planning risk is one of the principal reasons lenders offer lower leverage on sites without an implementable consent, typically capping at 60–65% LTV compared with 70–75% for sites with full planning.
Definition
The risk that a development site fails to secure planning permission, or that the consent granted is materially different from the scheme envisaged, undermining the project's financial viability. Pre-planning risk is one of the principal reasons lenders offer lower leverage on sites without an implementable consent, typically capping at 60–65% LTV compared with 70–75% for sites with full planning. Developers can mitigate pre-planning risk through pre-application discussions with the local authority, engagement with planning consultants, and commissioning specialist reports such as heritage assessments, ecology surveys, and transport studies.
See also
Closely related terms.
Outline Planning Permission
A form of planning consent that establishes the principle and scale of development on a site without approving the detailed design, which is dealt with subsequently through reserved matters applications.
Planning Permission
Formal consent from the local planning authority required before carrying out most types of development, including new construction, material changes of use, and significant alterations to existing buildings.
Residual Land Value
The value of a development site calculated by taking the gross development value of the completed scheme and deducting all development costs including build costs, professional fees, finance costs, and developer profit.
Site Acquisition
The process of purchasing a development site, including negotiation, due diligence, exchange of contracts, and completion.
Further reading
Guides that touch this term.
Guide
How Does Development Finance Work? A Complete Guide for UK Developers
A ground-up guide to how development finance is structured in the UK, covering loan mechanics, drawdown schedules, monitoring surveyors, and what lenders look for in your application.
5 min read readReadGuide
Using a Bridging Loan to Buy at Auction: A Step-by-Step Guide
Buying at auction requires completing within 28 days. Bridging loans are the go-to funding solution. This guide covers how to get pre-approved, what it costs, and how to plan your exit.
4 min read readReadGuide
Development Finance Application Checklist: Documents You Need
A comprehensive checklist covering every document lenders require for a development finance application, from development appraisals to contractor tenders and planning evidence.
11 min read readRead
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