[2024] UKUT 00316 (LC)

The split level detached stone house is unchanged from the valuation date and comprises three bedrooms, two reception rooms, kitchen, utility, boot room, larder, conservatory, downstairs shower room, upstairs family bathroom. The floor area of the property is agreed to be 203 sq m using the Valuation Office Agency basis of measurement of Reduced Cover Area (“RCA”), equivalent to gross external area. It has mains electricity and water, private drainage and oil fired central heating. At the valuation date the total area of the property was estimated to be 3 acres, including the length of unsurfaced private driveway, over which there is a public footpath, two parcels of rough grazing and an enclosure with three buildings used as barns/stables/garages.

Mr Cooper had acted for the claimant, and other claimants under the scheme, since its commencement and was able to provide photographs taken in September 2017 just ahead of the valuation date. Ms Bryan was first instructed with regard to negotiations for compensation on the property in September 2022, taking over from a colleague with whom Mr Cooper had been in negotiation and relying on that colleague’s notes for information relevant to the valuation date. She was subsequently instructed to provide an expert report on 5 April 2024.

In her report Ms Bryan analysed nine local property sales which took place between January 2014 and January 2022, using the Nationwide House Price Index for Wales to adjust the sale prices to the valuation date. Two of these transactions concern immediate neighbours of the property, two are located nearby in Forge Row, and the remainder are properties within a quarter of a mile radius. Analysing the adjusted sale prices by floor area, the range of evidence is from £1,191 per sq m for the largest property to £3,194 per sq m,for the smallest property. Ms Bryan’s two preferred comparables were Forge House (£1,464 per sq m) and Dan y Lan (£2,670 per sq m), both of which had a small area of land in addition to the house and garden. This led her to place a value on the property of £2,000 per sq m or £406,000.

The analysed evidence is summarised below, ranked from high to low value per sq m. Mr Cooper’s value for the property is at the top of the range and Ms Bryan’s value sits midway.

Mr Cooper initially provided no evidence to support his submitted value of £700,000, other than comparison with the asking price of £570,000 for the property in sales particulars which appear to be dated 2007. Ms Bryan carried out research into attempts to sell the property, in April 2008 and May 2009 at an asking price on each occasion of £560,000, followed in September 2010 by a reduced asking price of £549,950. She concluded that, as the property was withdrawn from the market unsold on each occasion, the asking price had been ambitious.

In his reply Mr Cooper explained that the house had been placed on the market when a colleague in his firm had been acting for Mrs Jones and her (now late) husband in regard to a proposed blight notice for an earlier version of the road scheme, but the matter was not pursued further after Mr Jones passed away in June 2011. He submitted that the threat of the scheme and its consequences for the property and the local market were being overlooked in Ms Bryan’s valuation figures and analysis. The contractors for the scheme had been appointed in March 2011, the Welsh Government wrote to potential claimants in October 2013 advising of the proposed compulsory purchase order, which was approved in March 2014. The scheme was a major infrastructure project and disruption to local road users and homeowners was inevitable as a result of its construction. This prospect would have had an impact on the sale prices analysed by Ms Bryan as comparable evidence and he submitted that her value of £406,000 did not reflect value in a no-scheme world at 6 November 2017.

Mr Cooper placed some reliance on the adjusted sale price of Riverside, the immediate neighbour to the property which shares its access. It was sold in January 2022, shortly after construction was completed in November 2021, at a price of £3,194 per sq m, when indexed back to the valuation date. However, the floor area of Riverside, at 93 sq m, is very small by comparison with the other detached properties and it would be expected to command a higher price per sq m.

I agree with Mr Cooper that sales of residential property in the immediate locality of construction of a major new road, whether ahead of or during the construction phase, would have been affected by the existence of the scheme. Each property would have been affected differently, depending on proximity to the construction and whether any land was to be taken, but none of the sales took place in a no-scheme world. The evidence analysed by Ms Bryan is helpful, but only as evidence of values in the scheme world. I am not assisted by Mr Cooper’s reference to previous asking prices for the property, some 10 years before the valuation date. Without a transaction they do not provide evidence of value, and speculation as to whether the asking price was too ambitious is no more than that.