[2025] UKUT 00335 (LC)

I have two pieces of valuation evidence provided by the authority, each stating that it provides an opinion of the market value of the property for compensation. The Red Book valuation, dated 26 July 2022, placed a value on the property at 29 April 2022 of £150,000. This followed an inspection on 1 July 2022 and relied on the Bruton Knowles building condition report dated 22 July 2022. It is the valuation upon which the authority relied in its negotiations, and which it asks the Tribunal to award.

The expert report, undated but filed with the Tribunal on 16 April 2025, placed a value on the property at 2 August 2022 of £120,000. Ms Beaney had reinspected the property on 4 April 2025, but also relied on notes and photographs from the earlier inspection, together with the Bruton Knowles building condition report dated 22 July 2022. In her expert report Ms Beaney made reference to having provided a Red Book valuation of the property in July 2022, but not to her opinion of value in that report and there is no explanation of reasons for the difference.

The correct date for the valuation of the property for compensation is the assumed vesting date of 2 August 2022, rather than 29 April 2022, but it would be surprising if the market value of the property had fallen from £150,000 to £120,000 over that short period. The authority has not sought to amend its case to reduce the compensation sum to £120,000, but some reconciliation of the two figures is needed to identify reasons for the difference. The key information from each report is summarised below.

It is apparent that in the expert report a smaller floor area is reported. The original floor area of 1,050 sq ft included the garage at 117 sq ft, while the later one did not.

The value of the property (assuming good condition) in the Red Book valuation is derived from an analysis of five sales of three-bedroom semi-detached properties between May 2021 and March 2022. Three were located in Springhill Road and two in neighbouring roads. The prices ranged from £200,000 to £270,000 and Ms Beaney settled upon a value for the property of £235,000.

In the expert report the valuation is derived from analysis of five sales of three-bedroom semi-detached properties in Springhill Road between May 2021 and July 2022. Only two of the sales were used in both reports, although only one sale post-dated the earlier valuation date. The range of prices is from £195,000 to £220,000, with the highest price achieved in July 2022. Ms Beaney settled on a value of £200,000 for the property in good condition, which sits £35,000 below her previous opinion.

In the Red Book valuation the total cost of repair, taken from the building condition survey, was estimated at £69,860 before VAT. 15% was added for overhead and profit (OH&P) and a further 5% for contingencies, to reach a total of £84,356, which was deducted from the market value of £235,000. In the expert report the same estimated costs of repair were used, but without the addition of 5% for contingencies, so a smaller deduction of £80,339 was made. The figures deducted for costs in both valuations excluded VAT, which would have been recoverable by a VAT registered business, such as a local builder or developer, but not by a private purchaser commissioning the repair works.

It is apparent that care should be taken in adopting this approach to valuation, which produces a market value based on subjective deductions. It should also be mentioned that in some cases, although not here, there may be evidence that properties requiring refurbishment are sought after by buy-to-let landlords and builders/speculators. In Lloyds Banking Group plc v Burnley Borough Council [2024] UKUT 020 (LC), where expert evidence was adduced for the claimant, the Tribunal (Mr Peter McCrea FRICS FCIArb) said at [23]:

“In my judgment it is misleading simply to deduct the cost of refurbishment work ... from a refurbished value to arrive at a value in poor condition. The market seems more nuanced than that. ... It appears that developers/landlords are prepared to spend time and effort refurbishing a property with a view to letting it, without the need to immediately recover their costs. ...”

Ms Beaney was entitled to change her opinion of the value of the property in 2022, with the benefit of hindsight and more evidence, but it is disappointing to have no explanation or rationale for the different use of comparable evidence and different approach to the deduction for repairs. However, the authority have made no submissions that the value provided in the expert report should be preferred to the earlier valuation on which they based their negotiations with the claimant, and which they have asked the Tribunal to determine. I am also inclined to give more weight to a valuation made close to the valuation date, in the knowledge of market conditions prevailing at the time, than to one made nearly three years later.

I therefore determine the market value of the property for compensation at £150,000.

The authority has provided copies of letters and notices dated 3 February 2022 and 31 March 2022 which were sent to the claimant at her home address requiring her to remove all property and personal items from the property by 21 April 2022. It has also provided a witness statement signed by Mr Dean Pickering, the contractor responsible for the house clearance at the property when the authority took possession, stating that no items of value were found at the property.

I am conscious that none of the documentation provided by the authority deals with the specific allegation by the claimant that items of value were removed in July 2017 when the authority entered the property to carry out cleansing and pest control. But I have nothing from the claimant to explain her claim or to identify items which may have been removed without her consent, nor does that earlier intervention amount to disturbance caused by the compulsory acquisition of the property in August 2022. Any claim relating to it falls outside the Tribunal’s jurisdiction.

Without evidence I am unable to determine any compensation due to the claimant under the heading of disturbance.

I have not received submissions regarding the claimant’s entitlement to a basic loss payment under section 33A of the Land Compensation Act 1973 (“the 1973 Act”) at 7.5% of the value of the interest. It was explained in Pramar v The London Borough of Barnet [2015] UKUT 0510 (LC) at paragraph [46] that under section 33E of the 1973 Act a claim for a basic loss payment must be made in writing to the acquiring authority.

No claim for a basic loss payment has been made so I can make no award of one. It remains open for the claimant to make such a claim.

I determine the value of the property for compensation on the vesting date of 2 August 2022, at £150,000.

The sum of £150,000, plus any statutory interest due from the vesting date, shall be paid to the claimant.