England and Wales Lands Tribunal

[2003] EWLands ACQ_195_2000 (14 February 2003)

ACQ/195/2000

LANDS TRIBUNAL ACT 1949

COMPENSATION – compulsory acquisition of long leasehold flat on a system built estate – comparables – compensation of £41,000 awarded

IN THE MATTER of a NOTICE OF REFERENCE

BETWEEN ROGER DDUNGU Claimant

and

COMMISSION FOR THE NEW TOWNS Acquiring

Authority

Re: 77 Hollydown Way

Cathall Road Estate

Leytonstone E11

Before: P H Clarke FRICS

Sitting at 48/49 Chancery Lane, London WC2A 1JR

on 4 February 2003

The claimant did not appear and was not represented

Miss K Olley of Sharpe Pritchard, solicitors, for the acquiring authority


 


DECISION OF THE LANDS TRIBUNAL

1. This is a reference to determine the compensation payable for the compulsory acquisition of a long leasehold flat in Leytonstone.
2. The claimant did not appear and was not represented at the hearing. The acquiring authority were represented by Miss K Olley, solicitor, of Sharpe Pritchard, who called one witness, Mr Damian Macnair MRICS.

Facts

3. From the evidence I find the following facts.
4. On 30 November 1998 the Secretary of State for the Environment confirmed The Waltham Forest Housing Action Trust (77 Hollydown Way, Cathall Road Estate) Compulsory Purchase Order 1998 which authorised the compulsory acquisition of 77 Hollydown Way, Leytonstone E11 ("the subject property"). On 15 October 1999 the acquiring authority made a general vesting declaration and took possession of the subject property on 6 December 1999. This is the date of valuation.
5. 77 Hollydown Way was on the Cathall Road Estate situated close to Leytonstone High Road. The Estate was a large system-built development of 7-storey blocks of flats linked by concrete podia with underground car parking. At one end of the Estate were two 20-storey tower blocks. The Estate was developed in about 1970. The properties were system-built of large panel construction with concrete stairwells and access balconies providing a system of walkways. The roofs were of flat concrete and asphalt construction. Elevations were pebbledash finish with glazed timber panelling and timber casement windows. Each stairwell had a communal rubbish chute. There was limited landscaping and a few local shops on the podium level.
6. The Cathall Road Estate was subject to a level of deterioration typical in system-built large panel construction including rain penetration and dampness, poor thermal and sound insulation, corrosion of exposed metal work. Mr Macnair said that the level of vandalism and graffiti on the Estate made it one of the more notorious in the London Borough of Waltham Forest. He attached to the his expert evidence a report dated 10 January 2002 by Mr Peter Butler BSc CEng MICE of Campbell Reith Hill LLP on the condition of the subject property and the Estate. This emphasised, with photographs and lists of disrepair and remedial measures needed, Mr Butler's "perception that the overall and environmental condition of the estate made it unattractive to both tenants and potential purchasers of properties. …The condition of the fabric and structure of the buildings, at Hollydown Way was considered to be poor, with a requirement for extensive repairs to maintain a reasonable future life for the property." (paras 10 and 11). Mr Butler stated that an outline schedule of repair works was prepared at 1990 prices at an estimated costs of £38,000 per flat (para 6).
7. I was told that the subject property and the Cathall Road Estate have now been demolished and the area largely redeveloped.
8. The subject property was a third floor flat with an entrance from the second floor communal walkway. The accommodation comprised three bedrooms, reception room, kitchen, bathroom and separate WC with a gross internal floor area of 79.2 sq m (852 sq ft). Heating was provided by a district warm air heating system; hot water was provided by an immersion heater.
9. The subject property was held on a long lease on full repairing terms from the London Borough of Waltham Forest for a term of 125 years from 1 April 1982 at a rent of £10 per annum plus an insurance rent and service charge. The lease was originally granted under Right to Buy provisions. At the time of the making of the compulsory purchase order the subject property was occupied by sub-tenants who had vacated the property by the date of valuation. The property has been valued with vacant possession.

Evidence

10. I received oral evidence from Mr Damian Macnair MRICS and the written evidence of Mr Butler, referred to above. Mr Macnair is a senior valuer with the London Borough of Waltham Forest and has been employed by the Council since 1986. His duties include the valuation of residential properties. He qualified as a chartered surveyor in 1991. Owing to the demolition of the subject property Mr Macnair's valuation is based upon records relating to the property and his past knowledge of the Cathall Road Estate.
11. Mr Macnair said that he has been unable to identify any private treaty sales of flats similar to the subject property for at least 12 months either side of the valuation date. His comparable evidence is drawn from auction sales before and after the valuation date. Sales from other areas have necessarily been included. I was told that there were no other transactions or settlements under compulsory purchase on the Cathall Road Estate. All other occupiers were council tenants who were rehoused. The subject property was the only flat purchased under the Right to Buy arrangements where acquisition was necessary prior to redevelopment.
12. Mr Macnair referred to six comparables. 34 Raynor Towers is a two-bedroom flat in an 11-storey tower block of non-defective construction on an ample site with only one other identical block on an estate which has been well-maintained. It was sold by auction for £62,000. Mr Macnair could not give the exact date. He included this comparable to illustrate the difference in value between ex-council high rise flats on good and bad estates (the Cathall Road Estate).
13. 54 Curtis House, New Southgate, N.11 is a two-bedroom long leasehold flat on the eighth floor sold by auction in January 2000 for £45,000. Mr Macnair said that this flat is not in a comparable area and is certainly of higher value than the subject property.
14. 16 Cochran Court, Leyton, E.11 is about two miles from the subject property. It is a two-bedroom flat in a five-storey brick-built block with gas central heating which sold for £41,000. Mr Macnair was unable to give the date of sale. He regarded this as the best comparable although the estate is considerably better than the Cathall Road Estate.
15. 45 Twyford House, N.15 is a two-bedroom long leasehold flat on the sixth floor in Tottenham sold by auction in July 1999 for £41,000. Mr Macnair said that this is a more expensive location. He did not know whether the block is system-built. Apart from location this block and estate probably offer little between them in terms of value and is of similar value to the subject property, having regard to the third bedroom but poorer location of the subject property.
16. 97 Colne House in Barking is a one-bedroom long leasehold flat on the 16^th floor which sold by auction in January 2001 for £37,000. Mr Macnair said that this is an inferior location and the price needs adjustment upwards for the smaller size.
17. 43 Law House in Barking is a one-bedroom sixth floor long leasehold flat which sold by auction for £34,500 in November 1999. Mr Macnair said that this is an inferior location and the price needs to be adjusted upwards to reflect the larger size of the subject property.
18. Mr Macnair said that the comparable evidence offered little opportunity to arrive at an accurate valuation but provides a range of values. The comparables demonstrate that "defective" properties and those on large unattractive estates fall well below values for traditional flats sold by private treaty. The comparables lack information regarding service charge and type of construction. Based on the comparables and some assumptions regarding missing information relating to them, Mr Macnair assessed the market value of the long leasehold interest in the subject property in December 1999 at £41,000.

Decision

19. 34 Raynor Towers, E.10, a flat on an estate which has been well-maintained, was sold for £62,000. Allowing for the difference in size this transaction shows that the value of a flat on a good estate provides an upper figure in the region of £60,000. The value of the subject property must be well below this figure. 54 Curtis House, 16 Cochran Court and 45 Twyford House are in better locations but are smaller in size. These comparables show a narrow range of value between £41,000 and £45,000, subject to adjustment for the inferior location but larger size of the subject property. The date of sale of 16 Cochran Court is not known; 54 Curtis House was sold in the month after the valuation date and 45 Twyford House was sold five months before the valuation date. Allowing for the larger size of the subject property but poorer location, these comparables indicate a value for the subject property in the region of £40,000 to £45,000. The two comparables in Barking are in poorer locations and are smaller in size. These flats were sold in January 2001 (over one year after the valuation date) and November 1999 (one month before the valuation date) for £37,000 and £34,500 respectively. These prices must be adjusted upwards for inferior location and smaller size and, in the case of 97 Colne House, for the change in prices over the intervening year. To reflect these changes – upwards from £34,500 and £37,000 and into a bracket of about £40,000 to £45,000 – Mr Macnair has put the market value of the subject property at £41,000. In my judgment this is a reasonable figure and, in the absence of other evidence, I accept it.
20. I determine that the compensation payable for the compulsory acquisition of the long leasehold interest in 77 Hollydown Way, Cathall Road Estate, Leytonstone E.11 under The Waltham Forest Housing Action Trust (77 Hollydown Way, Cathall Road Estate) Compulsory Purchase Order 1998 assessed as at 6 December 1999 is £41,000 (forty-one thousand pounds).
21. Miss Olley did not ask for the acquiring authority's costs and I make no order as to costs.

DATED: 14 February 2003

(Signed) P H Clarke