Thoughts ahead of LD Events Living UK: Viability needs a collaborative solution

Ahead of chairing the viability panel at the LD Events Resi Living Conference, Nick Riley, Managing Executive Director at Whittam Cox Architects, an event partner of Living UK, shares his thoughts on why delivering viable residential development requires a more collaborative approach.

The viability challenge

Urban residential development continues to face viability challenges that cannot be easily resolved, due to the multitude of factors at play.

Land values, construction costs, finance, the planning process, compliance, operational expenditure and achievable rents or sales values all interact differently depending on location and tenure. A scheme can have planning permission, investor interest and strong underlying demand, yet still not be deliverable. The consequences extend far beyond the development appraisal. When schemes stall, so too does the delivery of much-needed homes, investment and the regeneration of places.

A collaborative delivery model

From our recent experience, the projects progressing successfully tend to share one characteristic: the delivery model has been built collaboratively, rather than passed sequentially from landowner to developer, designer, contractor, funder and operator. There has never been a greater need to collaborate properly, from the outset through to delivery.

That means establishing a realistic land position early and designing to an investable cost plan, rather than attempting to value-engineer an unaffordable consent after the event, as we see so often. It also means testing procurement, programme, building safety, operating assumptions and funding requirements together at the design stage. Design is central to that process. It is not simply a line on the cost plan to be reduced when viability comes under pressure. When used strategically, design can unlock value, improve efficiency, simplify construction and reduce regulatory and programme risk, while safeguarding the quality that underpins long-term commercial and social value.

Gateway 2 and joined-up delivery

The Building Safety Regulator’s Gateway 2 process reinforces the need for this joined-up approach. It should not be treated as an approval exercise at the end of the design process, but as a core part of programme and procurement strategy. Design completeness, competence, information management and change control now have direct consequences for financing, contractor commitment and programme certainty.

A change in culture

The route to delivery, and to addressing the viability challenge, is arguably rooted in a change in behaviours and culture across the industry. This is not simply about following established processes or considering commercial, design and technical solutions in isolation.

Viable projects will increasingly be created by teams prepared to engage earlier, share constraints openly and honestly, and make holistic, informed decisions based on the whole-life business case:

• Developers need contractors and operators at the table earlier than ever.
• Lenders and investors need visibility of design and regulatory risk.
• Public bodies need commercial realism alongside policy ambition.
• Landowners must recognise that the most successful outcome may be realised over time, rather than through maximising the initial receipt.
• Designers need to work within clearly defined client requirements and commercial parameters to ensure the best designs are achievable.

The question is no longer simply: “Does the appraisal work?”

It is: “Have we created an informed and responsive delivery approach encompassing design, approvals, procurement, funding, construction and operation?”

Conclusion

Ultimately, we believe the key to unlocking viability lies in working collaboratively, with a clear commercial focus informing an iterative and responsive design process.