A feasibility study answers one question before money is committed: is this worth doing, and if so, which way? It might be for a buyer deciding what to pay, an owner deciding what to do with land or a building, or a developer deciding whether a scheme stacks up.
What it covers
- The site or building. Access, ground conditions, services, flood risk, trees and ecology, and anything in the title that limits what can be done.
- Planning. The existing use, the planning history, local policy, and what a new consent or change of use would involve, including affordable housing and other obligations.
- What could be built. A capacity test of how many homes or how much floor space the site could take, often a simple layout from an architect.
- Cost and time. Build costs, abnormal costs such as demolition, contamination or new utility connections, fees, and a realistic programme.
- Value and demand. What the finished homes or space would sell or let for, and how quickly, based on local evidence and agents’ advice.
- The appraisal. All of the above brought together to show the profit, the land value it supports, and how sensitive those are to the assumptions.
- A recommendation. Which option to pursue, the main risks, and what to do next.
Who contributes
An architect may draw the capacity layout, a cost consultant may price it, and agents advise on values. Planning consultants and surveys come in where the site needs them. The feasibility study brings those inputs together into one decision, so they are judged against each other rather than separately.
What affects the fee
The size of the site, the number of options to test, and how much survey and design work is needed. A single building with two options is a smaller job than a multi-phase site. The scope should be agreed in writing before work starts.
What it costs to skip one
- Paying too much for land because abnormal costs or planning obligations were not priced in.
- Designing the wrong scheme, then paying to redesign it when the numbers or the planners say no.
- Missing a constraint such as a sewer, an easement, a flood zone or a protected habitat that changes what can be built.
- Choosing the obvious option when another one, such as converting rather than rebuilding, or selling with consent rather than building, would have been worth more.
In Kent, a feasibility study for a buyer of three industrial units compares occupying one, and selling, converting or letting the other two. Read the case study.