[2024] UKUT 00301 (LC)

One of the main disputes in the experts’ reports was how the integral garage should be valued. Having rejected no.s 2 and 80 Chester Square as reliable evidence, the point recedes somewhat, as only two of the other seven properties do not have a garage.

Mr Nesbit’s view was since it was of lower specification, the floor area of a garage should attract a lower rate per sq ft than the rest of a house, especially in a high value area - hence his preference to value to net sales area. At the appeal property, Mr Nesbit said, the garage represented 8.81% of the total floor area, and to include it at main space rate would ‘result in an artificially high valuation’ especially compared with a house without a garage. He said that garages do not, for example, have air conditioning, or are fitted out with the same audio/visual or heating facilities.

In Mr Nesbit’s valuation, he applied a capital value rate of £2,400 per sq ft to his floor area of 3,808 sq ft to arrive at £9,139,200; he applied £500 per sq ft to the garage space of 368 sq ft, to produce a value of £184,000. Taken together, his value of the appeal property was £9,323,200, say £9,325,000.

Mr Alderton devalued and valued to gross internal area. He considered the likely purchaser of houses in Chester Square would be a high-net worth individual who would value their privacy and security and would look for off-street parking or a private garage. He made no differential between the garage and the main house. Six of his eight comparable transactions were of houses with integral garages and no adjustment was required. The seventh (no.72) was a development project, and the eighth (no.20) has living accommodation where the garage would be. In his experience, the Prime Central London market works on a gross internal basis and makes no reduction in the value attributed to the garage space. He pointed out that had Mr Nesbit applied his £2,400 to the garage, a value of £9,560,700 would be arrived at, which was only £60,000 higher than the price which the appellant paid for the property six years previously, and before they carried out an extensive refurbishment. Mr Alderton also pointed to the 2015 and 2017 sales of 70 Chester Square, where the developer added a garage, and that the appellant did not convert the garage of the appeal property to ‘more valuable’ living accommodation.

In their later reports, Mr Nesbit was immoveable from his position. Mr Alderton produced evidence of the value of parking spaces in Princes Gate, which ranged from £135,000 to £315,000 depending on size and position. These included a variety of ‘add-ons’, including valet parking, and ‘handmade peach skin vehicle covers giving further protection for your car’ (really). The value of others ranged between £150,000 and 280,000. The level of detail provided prevented proper analysis, but the overall picture was that substantial values were attributed to secure parking spaces. This must be the case to a greater extent if the space is integral to the house, and I have little difficulty in rejecting Mr Nesbit’s view. I accept Mr Alderton’s evidence that the market (and, I should say, many previous decisions of the Tribunal) works on a gross internal basis, and that there is no evidence that the presence of an integral garage is anything other than value neutral. It follows that I agree with Mr Alderton that the comparables should be devalued, and the appeal property valued, to gross internal area including garage space.