United Kingdom Upper Tribunal (Lands Chamber)

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URL: http://www.bailii.org/uk/cases/UKUT/LC/2009/ACQ_570_2008.html
Cite as: [2009] UKUT 190 (LC)

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	UPPER TRIBUNAL (LANDS CHAMBER)



	UT Neutral citation number: [2009] UKUT 190 (LC) LT Case Number: ACQ/570/2008 ACQ/571/2008 TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007 COMPENSATION – compulsory purchase – dwelling house – absent and untraceable owners – valuation of freehold reversion and long leasehold interests – compensation assessed at £15 and £35,000 respectively IN THE MATTER of a NOTICE OF REFERENCE

	BETWEEN JERROLD & HENRY MERCER (1) BLUEBLAZER INVESTMENTS LIMITED (2) Claimants and BURNLEY BOROUGH COUNCIL Acquiring Authority Re: 173 Accrington Road, Burnley, Lancs

	Determination on the basis of written representations under Rule 27 of the Lands Tribunal Rules 1996 (as amended)

	© CROWN COPYRIGHT 2009

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	DECISION Introduction 1. This is a reference to determine the amount of compensation payable in respect of the compulsory purchase of the freehold reversion and long leasehold interests in 173 Accrington Road, Burnley, Lancs (the subject property). The interests were acquired under the Burnley (173 Accrington Road, Burnley) Compulsory Purchase Order 2008 (the CPO) by means of a General Vesting Declaration dated 11 September 2008. The property vested in the acquiring authority on 13 October 2008 which is the valuation date for the purposes of this determination. 2. The acquiring authority tried but failed to contact the owners of both the freehold reversionary interest, and the long leasehold interest (respectively Jerrold and Henry Moser, formerly of Manchester, and Blueblazer Investments Limited, a company registered in the Isle of Man). Consequently, no representations have been submitted by the claimants. I have read the affidavit of John Stephen Killion, a project officer in the council’s Housing Unit, dated 27 April 2009, setting out the actions taken to trace the owners, and I am satisfied that all reasonable steps were taken in that regard. Evidence 3. Mr Robin Forshaw MRICS, a chartered surveyor employed by the council as a valuer engaged principally in acquiring residential properties under Burnley’s Housing Market Renewal Projects, produced expert reports, dated 26 June 2009, on the two interests. He had inspected the subject property on 13 October 2008. 4. 173 Accrington Road is a house in the middle of a terrace of nine similar properties, some of which are shops, including the adjacent unit which trades as a Chinese Take-away. The house, which has a gross external area of 109.7 sq m, contained two rooms and a kitchen at ground floor, and three bedrooms and a bathroom on the first. It had been unoccupied for some 9 years and was in very poor condition at the vesting date, and requiring extensive repair, refurbishment and modernisation. The council prepared a schedule of repair which was costed at £36,000 and this was submitted to the Secretary of State as part of the CPO. 5. The property was acquired under the council’s Vacant Property Initiative, administered by the Housing Department, with the intention of bringing it back into use by undertaking the required repairs and refurbishment prior to offering for sale in the market. 6. As to the freehold reversionary value, Mr Forshaw said that whilst the full details of that interest were unknown, it was considered that it had would have been the subject of a lease for 999 years from about the end of the nineteenth century at a fixed ground rent of approximately £2 per annum, as was the case with many properties within the immediate vicinity. He

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	referred to a number of similar properties in Burnley where acquisitions had been agreed at sums that reflected a years purchase of between 6 and 8, together with auction results of blocks of ground rents (which were significantly higher) in Liverpool, Lancashire, Derbyshire and Newcastle upon Tyne that reflect years purchase multipliers of between 9.5 and 14.4. In his view, although they were settlements rather than open market transactions, the local comparables were more appropriate as the blocks would have been more attractive to the market, having higher rents and being easier to manage than individual units. Mr Forshaw therefore adopted a YP of 7 which, applied to the rent of £2 pa, produced a reversionary value of £15. 7. Regarding the long leasehold interest, Mr Forshaw considered, and set out the details of, a number of local comparables, both modernised and unmodernised, that were either on the market or sold at and around the valuation date. From these, he concluded that if it had been fully refurbished and modernised the subject property would have had a value of approximately £70,000. This was supported particularly by a house in Westmorland Street that had also been modernised and was marketed by a local agent in February 2008 at £60,000. Mindful of the fact that it would cost in the region of £36,000 to effect the necessary works, he concluded that the value of the long leasehold interest was, say, £35,000. This figure was, he said, supported by the large number of unmodernised properties that had been available or were sold at the appropriate date. Conclusions 8. I am satisfied that Mr Forshaw’s assessment of the freehold reversionary value at £15 is correct for the reasons that he has given. As to the long leasehold value, he produced comprehensive support for his opinion by way of comparables, and I accept his conclusion. 9. I therefore determine the open market value of the long leasehold interest at £35,000 and the freehold reversionary interest at £15 and award compensation accordingly. DATED: 28 September 2009

	P R Francis FRICS

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