Reading Your Development Risk Review
A guide to what the 20,000-path simulation actually tests, how to read each result, and what it deliberately does not tell you.
A single number is easy to produce and easy to misread. This explains what’s underneath it.
One path, one coherent story, run 20,000 times.
A conventional development appraisal gives you a single central case: one set of assumptions about planning, cost, sale price and programme, producing one answer. It tells you almost nothing about how those assumptions interact, or what happens when several of them move against you at once, which is how real schemes actually go wrong.
The Development Risk Review takes a different approach. It simulates 20,000 independent versions of your scheme, and in each one, the planning outcome, the construction cost path, the sale price path, the programme duration and the eventual exit route are all generated together, as one coherent story, rather than tested separately against a fixed central case. A path where planning comes with conditions and costs run hot and the market softens by completion is a genuinely different, worse story than a path where any one of those happens in isolation, and the review is built to capture that difference rather than average it away.
The review doesn’t predict your outcome. It shows you where your scheme’s risk actually concentrates.
Six things happen, in sequence, on every simulated path
You don’t need to follow the mechanics in detail to use your results, but knowing roughly what each stage represents helps you read the output properly.
Planning outcome
Each path is assigned a planning result, granted as submitted, granted with conditions, refused but won on appeal, or refused outright. Conditions and appeals both carry a cost increase, a value reduction and a delay. Refusal ends that path with a defined loss.
Cost and price, together
Construction cost and sale price are simulated month by month, and they’re deliberately linked, when the wider market turns, cost pressure and price softness tend to move together, not independently. Occasional cost shocks, ground conditions or building control issues, are layered on top.
Programme duration
How long the build actually takes isn’t a separate guess, it’s derived from how many cost shocks that path happened to hit. A path with more disruption takes longer, consistently, rather than duration and cost being unrelated inputs.
Facility and the term test
Given the cost and programme that path produced, the facility size, drawn debt and interest are calculated, and tested against your actual facility term. Running over that term triggers a penal rate and an extension cost, not just a note that it happened.
The stage-gate decision
Partway through the build, the model asks a genuine question, is it worth stopping now and recovering what’s left, or continuing to completion, based on a proper valuation of each choice rather than a fixed rule. In our current testing, continuing is virtually always the better answer, worth knowing rather than assuming.
Exit: refinance or sale
Both exit routes are priced properly for every path, refinance against a genuinely separate income and yield calculation, sale against realised value with a discount that only bites when the market’s soft at completion, and the better feasible one is taken.
What each of the four result areas is actually telling you
Your report groups results into four areas. Here’s what each one means and the kind of action it should prompt.
How much of your scheme’s downside comes specifically from the planning branch it lands on, conditions, appeal, or refusal, rather than from construction or market risk.
If this is where your risk concentrates: the priority is strengthening the planning position itself, pre-application advice, addressing likely conditions before submission, or reconsidering reliance on an appeal route, rather than trying to fix it through the facility structure.
How much your outcome depends on the build actually finishing close to your base programme, versus how much a realistic run of delay would erode the result.
If this is where your risk concentrates: the priority is contractor selection, contingency, and honest programme assumptions, and worth checking your facility term genuinely allows for realistic delay, not just the base case.
How much margin sits between what the facility actually needs to advance across simulated paths and what’s been agreed, and how often the facility term itself gets breached.
If this is where your risk concentrates: the priority is the facility structure itself, size, term, and rate, before construction starts, since this is far cheaper to fix at application stage than to renegotiate mid-build.
How often refinance is genuinely available as a fallback if sale conditions are weak at completion, and how much the exit result depends on the market being kind at that specific moment.
If this is where your risk concentrates: the priority is having a real, credible refinance route in place as a second exit, not just a sale plan with no contingency if the market’s soft when you complete.
The limitations are part of the output, not a footnote.
Every input in this model is asserted from professional judgement and general market patterns. None of it is fitted to a dataset of completed developments with known outcomes, that remains the single largest gap in its evidentiary basis, and we say so plainly rather than let a confident-looking number imply otherwise.
What this means for you, practically
The review is genuinely useful for identifying where your scheme’s risk sits, planning, programme, funding, or exit, and for stress-testing a structure before you commit to it. It should not be read as a scored prediction of your specific transaction’s probability of success. Two schemes that look identical in their central-case appraisal can carry very different risk once cost, price and planning are allowed to move together, and that difference is exactly what the review exists to surface, not to resolve for you.
A few other things worth knowing plainly: planning probabilities in the model reflect national averages, actual approval and appeal-success rates vary considerably by local planning authority, and that local variation isn’t currently built into every part of the review. Interest rate risk on the facility itself isn’t modelled as something that can move during the build, it’s treated as fixed. And the stage-gate abandonment option, while genuinely present in the model, has only been tested at a single decision point partway through the programme, not the rolling reappraisal a developer would actually carry out through a live build.
None of this is a reason to disregard the results. It’s the reason to treat them as what they are, a rigorous, honest tool for identifying where to focus diligence, not a substitute for it.
What to bring to the conversation
Your results are most useful as the starting point for a proper conversation, not the end of one.
- Your report, with the four result areas visible
- Which area shows the most concentrated risk, and why, in your own judgement
- The actual base assumptions you used, land cost, build budget, budgeted GDV and programme
- Your planning position and any pre-application advice already obtained
- Your intended exit strategy and whether a genuine refinance fallback exists
- Any specific results that surprised you, those are often the most useful to discuss
For a practical guide to the information and documents lenders normally need before considering a development-finance proposal, read What Lenders Need Before They Will Offer Development Finance.
Questions about your Development Risk Review
Does the review predict whether my scheme will succeed?
No, and it isn’t intended to. It’s built to show where your scheme’s risk concentrates, planning, programme, funding or exit, so you and we can focus diligence and structuring where it matters most. It should not be read as a scored prediction of outcome for your specific transaction.
Why do the four result areas matter more than a single overall score?
A single score tells you how risky a scheme looks without telling you why. Two schemes can carry similar overall risk for completely different reasons, one from a difficult planning position, another from tight funding headroom, and those need different responses. The four areas exist so the result points toward an action, not just a number.
Is the review calibrated against real completed developments?
No, and we say so directly rather than imply otherwise. Every input is asserted from professional judgement and general market patterns, not fitted to a dataset of completed schemes with known outcomes. This is a genuine limitation, worth knowing when you’re weighing how much confidence to place in any specific result.
Does the review account for my local planning authority specifically?
Planning outcome probabilities in the review reflect national averages. Actual approval and appeal success rates vary considerably by local planning authority, and that local variation isn’t currently built into every part of the model. Worth discussing your specific authority’s track record with us directly alongside your results.
What should I do if my results show high risk in one area?
Treat it as a prompt to focus diligence there before committing further, rather than a verdict on the scheme. High planning exposure points toward strengthening the planning position, high programme sensitivity toward contractor and contingency planning, low funding headroom toward revisiting the facility structure, and weak exit resilience toward securing a genuine refinance fallback.
Can I discuss my results with EAS Finance before applying for finance?
Yes, that’s exactly what the review is designed to lead into. Bring your results and your base assumptions, and we’ll talk through where your scheme’s risk actually sits and what that means for how the facility should be structured.
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Talk through your Development Risk Review results.
Send us your report, your base assumptions and your planning position, and we’ll talk through where your scheme’s risk concentrates and what that means for structuring the facility.
This page explains how to interpret the Development Risk Review and does not constitute personal financial advice. The review is a diligence and risk-identification tool; every input is based on professional judgement and general market patterns and is not fitted to a dataset of completed schemes with known outcomes. It should not be read as a prediction of outcome for any specific transaction. EAS Finance is a trading name of Elite Admin Services Ltd (FRN 1044838), an appointed representative of White Rose Finance Group Ltd (FRN 630772), authorised and regulated by the Financial Conduct Authority. EAS Finance is a credit broker, not a lender.