If challenges are found early, they don’t remain challenging for long. Through a process of mapping options, risks, challenges and opportunities – developers can ensure that a scheme is viable and appealing to the market. The feasibility study is a key part of this process.
This article provides an overview of feasibility studies and their role in the early stages of a development.
The feasibility study forms a key component of the development appraisal.
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What will a feasibility study investigate?
Planning, designing and constructing buildings often has an impact on a wide variety of stakeholders and will be subject to the controls of various bodies. A feasibility study will analyse the potential risks, limitations and opportunities that arise due to these entities. These interested parties may include:
- Owners of neighbouring properties
- Local Business Owners
- The local planning authority
- Governmental Regulators and Building Control
- Archaeological, Conservation and Heritage Interests
- The highways agency
- Flood and Environmental Constraints
- Utilities and Services Providers
An architect will usually visit the site in person and also analyse from aerial views.
A developer also needs to ensure that a scheme will be viable when taking into account the likely development costs and GDV (gross development value). The developer also needs to be aware of their exit strategy. The feasibility study will therefore also investigate the following:
- Assessing overall site capacity
- Considering planning policy
- Selecting an appropriate use/ use-mix for the site
- Selecting a target specification based on local demographics
- Estimating gross development value
- Considering the building’s design, access and materiality
- Assessing ongoing maintenance and operational costs
A site analysis and sun path diagram is often produced in a feasibility study.
Depending on the scale of the site and the level of due diligence that a developer wants to commit to, both external and internal interests can be covered within a feasibility study.
At the early stages, an outline design feasibility can be extremely useful. Although it doesn’t usually cover legal and financial issues in detail, the study can be used to establish the development potential and possible end-values.
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When is the right time to carry out a feasibility study?
In an industry where time has an acute relationship with capital expenditure, it is essential to quickly formulate possible strategies for how to progress a scheme.
Feasibility studies should therefore be carried out as early in the development process as possible. They can help clarify options in advance of purchasing a site and also assess new constraints that have emerged after a site purchase.
Later in a project, a developer may need to reassess options after having a planning appeal dismissed. A new feasibility study for a new design based on the inspector’s reasoning will be useful in setting a clear path forward.
A variety of building massing options are usually investigated.
How can I appoint an architect to assist?
It is usually advisable to work with an architect who is experienced in similar schemes and also with the local authority in question.
Understanding relevant local and national planning policy is key.
Review the architect’s work and determine whether their values appear to be paralleled with your own. Ascertain their level of success in planning and designing for similar contexts, high-streets, back-land plots, conservation areas etc. When you are satisfied that they might be a good fit, reach out and start the conversation.
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One or two massing options may be developed in more detail to create a sketch design proposal.
Can a feasibility study be submitted for pre-app advice?
Feasibility studies may form the basis of an application seeking pre-application advice. Usually, the feasibility study will need to be developed in more detail. This will include producing formal drawings and other documents to present to the scheme in as clear a manner as possible.
Pre-app advice allows developers to receive indicative (non-binding) feedback from the local authority about what may be supported on the site.
For these conversations to be meaningful it is often useful to present a range of options that outline the building use, outline design and unit mix.
How much will it cost?
Costs depend on the level of detail required, the scale and complexity of the site and the number of design options being prepared. As a rough guide, however, a feasibility study for a housing scheme in London may cost between £2,000 and £4,000. An architect may decide to subsidise part of this cost if there is some certainty that they will be appointed on the project at a later date.
Typical plans are usually produced as part of the feasibility study
The best way to face challenges is far in advance and with viable solutions in mind. By commissioning a feasibility study; you can create a basis for solid decision making. The study will consider the impact of each option on financial targets, design quality and ultimately on the end-user. The document is an asset that will give a developer confidence and clarity for the project ahead.
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A feasibility study will analyse the potential risks, limitations and opportunities of a site. It will assess the likely planning potential and viability of development.
Feasibility studies therefore be carried out as early in the development process as possible. They can help clarify options in advance of purchasing a site.
As a rough guide, a feasibility study for a housing scheme in London may cost between £2,000 and £4,000.