Page 136 - Demo

Planning permission, above all, can have a huge effect on value of land. In the context of capital sales it is a key thing in terms of extracting value and the surveyor will be highly focussed on what might be possible in terms of planning possibilities and how to see the charity get a fair value for that.
The thing with planning is that it is uncertain until planning permission and
all related obligations have crystallised and that can take time (during which markets can change) and can cost a lot of money to get. It is also not even certain when permission is granted as there are rights for third parties to appeal (judicially review) decisions. Planning permissions (especially larger ones) can be highly contentious and political and so challenges from third parties do indeed occur.
So there is a lot of risk in pursuing larger planning permissions as many can fail, or at least not produce a permission that is good enough to add value to the site (after development costs). This is therefore the kind of thing that is usually the province of property developers, as specialists and commercial entities trading for pro t.
Not to say that in appropriate circumstances it may not be right for a charity, if advised and recommended by the quali ed surveyor to do so, to seek planning permission itself as a question of investment in its charitable asset akin to repair/alteration or other enhancement to value. However, the cost involved
in getting planning and the risks/uncertainties associated have made this less and less common as an approach over time. It has looked more and more like trading at risk and less and less like investment for a suf ciently certain return.
If a charity does wish to make an approach to planning and the risks are
seen as too high to run within the charity - but the charity wishes to keep a closer rein on the proposal - it may be a trading subsidiary can prove a helpful vehicle (there may also be bene ts in terms of VAT recovery). However, careful consideration and advice is always needed as the trading subsidiary has to be dealt with at arm’s length and the apparent VAT savings can be counterbalanced by costs elsewhere.
132 Chapter 7