[2024] UKUT 216 (LC)

Mr Radley-Gardner KC invited the Tribunal to update what has become the standard consideration for an unexceptional rural site for inflation but otherwise to leave its previous approach undisturbed. He submitted that the guidance in Dale Park arose from the Tribunal’s analysis of consideration using the three stage approach, and the cross check by reference to consensual transaction evidence was no more than that. The Tribunal has already said that Code rents are a poor analogue for a paragraph 24 valuation and Mr Williams was wrong to rely on them. The Dale Park figure of £750, updated in line with RPI to £1,000, is consistent with the base rent of £1,000 at Station Road. He described this as a respectable valuation position.

Mr Watkin KC submitted that the low figure of £750 referred to in Dale Park had been influenced by the very earliest decisions, in Fothringham and in Islington,which were later superseded by a much higher figure in London and Quadrant. In Stephenson the Tribunal simply applied the Dale Park figure, so the “pattern” for rural sites consists now of a single figure. In this case, for the first time, the Tribunal had been provided with useful evidence of small rural lettings for non-telecommunications uses and its previous decisions on unexceptional rural sites should be revisited in the light of it.

He criticised Mr Cottage’s approach in applying the Tribunal’s figure of £750 without expressing any valuation judgment.

Mr Watkin KC submitted that the evidence of open market lettings of small sites was relevant, because the principle of substitution would apply (i.e. that a prudent buyer will not pay more than the cost of acquiring an equivalent substitute). He suggested that where there is no shortage of sites, a prospective tenant will not pay more than they need to and will look elsewhere if a landlord asks too much. Landlords would be bidding against each other, until the rent reached a point below which no landlord would consider it worthwhile letting. The Site may have only nominal alternative use value, but the minimum acceptable rent is still required to overcome the landlord’s reluctance to take on the burdens of a letting. This had been demonstrated by Mr Williams’ evidence to be a figure of not lower than £1,000 for a very small site with a very low intensity use.

The real burdens imposed by the new lease must then be taken into account, including the security of tenure slowing down development, and the frequency of access required through the yard and across a field with horses in it - 33 requests for access had been recorded in 2023.