[2024] UKUT 26 (LC)

The appeal relates to a first floor mansion flat at 207, Ashley Gardens, Emery Hill Street, London SW1P 1PA, just south of Victoria Street and close to Westminster Cathedral. The block of which the flat forms part occupies a corner position and is arranged over six floors. It has a distinctive corner turret with a domed roof.

A lease of the flat for a term of 177 years calculated from 25December 1898 was granted in on 28 January 1985; the respondents, Mr and Mrs Collins, purchased it in November 2021 for £973,000. Their vendor assigned to them the benefit of a notice served on 7 January 2022 pursuant to section 42 of the 2002, claiming an extended lease. The notice proposed a premium of £146,750. At that date there were 53.96 years unexpired.

The appellant is the head lessee of the block, and the competent landlord so far as the extension of the lease is concerned. It served a counter-notice on 17 March 2022 proposing a premium of £451,470. There is also an intermediate lessee of the block whose lease ends one day later than the appellants’; the intermediate lessee has agreed terms and is not a party to this appeal.

The flat has three bedrooms, a reception room, kitchen, bathroom and an additional separate WC. The plan to the lease shows only one bathroom and a larger kitchen; at some point the kitchen has been reduced in size to make space for the extra WC and a short access corridor. The floor area is agreed between the parties to be 1,407 sq ft. The flat is located to the rear of the block with only the windows in the lounge facing west on to Emery Hill Street. The bathroom, kitchen and two of the bedrooms face east onto Greencoat Row.

The terms of the extended lease have been agreed and only valuation is in dispute.

As to valuation, a number of matters are agreed, as follows:

The following table, helpfully set out in Ms Muir’s skeleton argument, shows where disagreement remains:

It will be seen therefore that the gap between the parties’ positions has narrowed considerably. The points in issue fall into two groups. The first group of issues is about comparables and adjustments, and its impact is on the freehold value with vacant possession and the extended lease value:

There are two issues in the second group, and both affect the existing lease value:

Both parties have instructed expert witnesses on valuation. For the appellants we had evidence from Robin Sharp FRICS, a former director of Keith Cardale Groves who now practices on his own account. The respondents’ expert was James Rangeley MRICS, a director of Egertons. Each produced a report for the FTT and then a supplemental report for the Tribunal.