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UPPER TRIBUNAL
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UT Neutral citation number: [2011] UKUT 267 (LC)
Case
Number: ACQ/530/2010
TRIBUNALS,
COURTS AND ENFORCEMENT ACT 2007
COMPENSATION
– compulsory purchase – mid-terrace house – consideration of previous Tribunal
decisions on comparable property – new evidence – compensation assessed at
£52,000.
IN
THE MATTER OF A NOTICE OF REFERENCE
BETWEEN GUY
GRIFFITHS Claimant
and
SALFORD CITY COUNCIL Acquiring
Authority
Re: 23 Hampshire Street,
Higher
Broughton
Salford 7
Manchester
M7
2AQ
Determination
on the basis of written representations under rule 46 of the Tribunal Procedure
(Upper Tribunal) (Lands Chamber) Rules 2010.
by
A
J Trott FRICS
The following cases are referred
to in this decision:
Anthony Griffiths v Salford
City Council [2009] UKUT 154 (LC) (ACQ/352/2008)
Guy Griffiths v Salford City
Council [2010] UKUT 122 (LC) (ACQ/409/2009)
DECISION
Introduction
1.
This is a reference to determine the amount of compensation payable by Salford
City Council (the “acquiring authority” or “council”) for the compulsory
purchase of 23 Hampshire Street, Higher Broughton, Salford 7, Manchester M7 2AQ
(the “Property”). The claimant is Mr Guy Griffiths, the freehold owner of the
Property.
2.
The Property was purchased under the City of Salford (Higher Broughton
Regeneration Area No. 1) CPO 2003, the purpose of which was to assemble land
and properties in order to implement a regeneration strategy for Higher
Broughton. The CPO was confirmed on 4 August 2004 and a general vesting
declaration was made by the council on 21 January 2005. The Property was
vested in the council on 21 February 2005 which is the valuation date for the
purposes of the reference.
3.
The claimant seeks compensation in the sum of £95,000. The acquiring
authority valued the Property at £52,000 in its reply to the statement of case
but reduced this subsequently to £50,000 in its expert’s report. Both parties
rely upon two recent decisions of this Tribunal which dealt with similar references
in respect of 35 Hampshire Street, Salford M7 2AQ and 11 Leicester Road, Salford M7 4AS. These decisions are Anthony Griffiths v Salford City Council [2009] UKUT 154 (LC) (ACQ/352/2008) and Guy Griffiths v Salford City Council [2010] UKUT 122 (LC) (ACQ/409/2009) respectively. (Mr Guy Griffiths is Mr
Anthony Griffiths’ brother and he is also the claimant in this reference). The
Member in both references was Mr P R Francis FRICS.
4.
The reference proceeded under the written representations procedure. The
previous two references were heard at hearings under the simplified procedure.
5.
The claimant relies upon his own written representations and supporting
documents. The acquiring authority rely upon an expert report prepared by Mr
Robert Yardley MRICS, a consultant surveyor at the Manchester Office of
District Valuer Services.
Facts
6. There is
no statement of agreed facts and I base the following upon the evidence of the
parties.
7. Hampshire Street and the surrounding streets have now been redeveloped as Broughton Green
but the Property was located approximately 1¾ miles north of Manchester city centre
in Higher Broughton. The regeneration of the area proceeded by way of two
compulsory purchase orders. The Property was located in the centre of the area
of the first CPO, known as the Bottom Streets CPO. Apart from Hampshire Street it included Wiltshire Street and Devonshire Street to the south and Vincent Street and Wellington Street East to the north. It extended westwards to Rigby Street and eastwards to Tully Street. Most of the properties acquired, including 23 Hampshire Street, were terraced houses, but the CPO also included a library, public
house, nursery and family centre and other community facilities as well as the Northumberland Street playing fields.
8. A second
compulsory purchase order was confirmed on 11 May 2007. This was known as the
Top Streets CPO and covered several streets to the east of the Bottom Streets
CPO. It extended as far as Leicester Road and included the eastern sections of
Devonshire Street and Wiltshire Street to the south, Turner Street (directly
east of Hampshire Street), Kings Street and was bounded to the north by Cardiff
Street. On the eastern side of Leicester Road lies the area known as Mandley Park (also referred to by Mr Griffiths as Gainsborough Street). To the west of the
Bottom Streets CPO area lies the residential area known as the Cliff.
9. The
Property was a mid-terrace pre-First World War brick-built house under a
pitched roof re-covered with interlocking concrete tiles. There were new
downspouts and gulleys. The apex on the rear elevation had been renovated. At
the time of the acquiring authority’s survey (17 August 2005) there was peeling
paintwork on the front elevation. This elevation was flush with the pavement
and there was a small rear yard. In his expert report Mr Yardley said that the
gross external area was 102 m2
or thereabout and not 106 m2
as stated in the acquiring authority’s reply to the statement of case.
10. The accommodation comprised
two reception rooms on the ground floor, each with UPVC double glazing, and gas
fired central hearing radiators. The front room had damp patches at the time
of survey. There was a kitchen with dated units, a cooker and a fridge/freezer.
The kitchen had a single glazed timber frame window. There were 3 bedrooms and
a bathroom on the first floor, all with central heating. Two of the bedrooms
(including the master) had single glazed timber framed windows. The second
bedroom had double glazed UPVC window frames. There was evidence of dampness
to the rear and master bedrooms (which was described as having “very damp
plaster work”) at the time of survey.
The case for the claimant
11. Mr Griffiths argued that
the value of properties in Hampshire Street were the same as, or higher than,
those in the Top Streets area and Mandley Park. He supported his argument by
reference to property values in 1993-1995 which he said was before the blighting
effect of the scheme. He produced copies of advertisements in a “Homeseeker” paper
produced by Jeffrey Normie & Co, a firm of local estate agents. These
showed 4 two bedroom terrace houses for sale in Hampshire Street at an average
asking price of £33,450. This compared with 6 three bedroom terrace houses in Mandley Park with an average asking price of £25,732, a two bedroom terrace house in Mandley Park at an asking price of £28,950 and 4 two bedroom terrace houses in the Top Streets
area with an average asking price of £27,475.
12. Mr Griffiths said that the
blighting effect of the scheme (which he expressed as “sterilisation”) began in
the mid-1990’s and he produced copies of several documents which gave a broad
chronology of the council’s redevelopment proposals including a compulsory
purchase order made in 1996 to acquire unfit houses in Wiltshire Street (the
road immediately south of Hampshire Street) and a redevelopment master plan
that included, at least as an option, the acquisition of the whole of Hampshire
Street. The Mandley Park area experienced similar social problems to those in
the vicinity of the Property. Mr Griffiths argued that, in the absence of the
scheme, demand for houses in Hampshire Street in 2005-6 would have been as
strong as the demand in Mandley Park, a fact recognised by the Tribunal at
paragraph 25 of its decision in ACQ/352/2008.
13. The council offered £36,500
for the Property in August 2005 and Mr Griffiths compared this figure with the
purchase price of 11 properties in the Top Streets area between May 2004 and
January 2006. These were settlements where the vendors were professionally
represented and averaged £20,977, ranging from £16,250 to £27,000. The
information was provided by the council. Mr Griffiths concluded from this that
the value of Hampshire Street properties was approximately 1.5 times as great
as the prices paid by the council for houses in the Tops Street area.
14. In its decision on 11 Leicester
Road (ACQ/409/2009) the Tribunal determined that, in 2009, values in the Top
Streets area of between £780 to £800 per m2
were similar to those in Gainsborough Street at £800 per m2. Mr Griffiths said that values
in Hampshire Street were equal to or higher than those in Gainsborough Street from
1994 to 2001, and, in 2005, superior to those in Top Streets. He said that it
was anomalous for the Tribunal to value Hampshire properties at 20% less than
those in Gainsborough Street in 2005 but then to determine that properties in
Top Streets and Gainsborough Street were equal in 2009.
15. The Tribunal distinguished Gainsborough Street from Hampshire Street on three grounds. Firstly, it was close to Mandley Park itself; secondly, it was near the shops in Leicester Road; and, thirdly, it
appealed to the local Jewish community. Mr Griffiths said that proximity to
the park did not seem to have had any effect upon house prices in the 100 years
since the houses were built. Hamilton Street had also been close to the shops,
the precinct at Newbury Street having been demolished as part of the scheme. The
local Jewish community had not moved southwards towards Hamilton Street (and
its more spacious accommodation) because of the lengthy period of blight caused
by the council’s redevelopment proposals from the mid-1990’s onwards. Mr
Griffiths also queried how important that community was to the local housing
market in Mandley Park in any event. He cited a survey of the Gainsborough
Street area which showed that people of white British, Polish and Pakistani
origin accounted for 80% of the local population with a further 11 ethnic groups
represented in the neighbourhood which, Mr Griffiths said equated to
approximately 2% per group, He concluded that “we can summarise that the Jewish
influence on the market has actually been very small”.
16.
Mr Griffiths argued that the council, having acquired numerous
properties in the vicinity of the Property, failed to manage them properly. In
the 35 Hampshire Street reference (ACQ/352/2008) Mr Dylan Vince, a witness for
the council, had conceded in cross-examination that:
“When the council acquired
properties by agreement, prior to the CPO, they were simply boarded up and
left, and [he] accepted that there had been problems with burst pipes and
vandalism”.
In a letter dated 6 January 2003
Mr John Wooderson of the council’s Housing Services Department said that:
“The council accepts that the high number of vacant
properties within the area has a negative impact on the quality of life of the
remaining residents…”
Mr Griffiths said that the lack of management and security of
vacant properties had led to the theft of slates, copper and lead, creating
problems of dampness in the remaining houses that were occupied, including No.
23. Such deleterious consequences were caused by the scheme and should be
ignored.
17. Mr Griffiths claimed the
sum of £95,000 but did not provide a breakdown of his valuation.
The case for the acquiring authority
18. Mr Yardley relied upon the
two previous decisions of the Tribunal involving 35 Hampshire Street and 11 Leicester Road. He considered whether there were any circumstances affecting the
Property which would significantly distinguish it from No.35.
19. The properties were
physically very similar, being only 4 houses apart in the same terrace. No.35
was marginally larger but the two properties had essentially the same
accommodation. He thought that while the Property benefited from a re-covered
roof and full, as opposed to partial, central heating, it had greater damp
penetration than No.35 and suffered from peeling paintwork at the front which made
the view from the street less attractive. Mr Yardley concluded that the repair
and decorative condition of the two properties was broadly comparable and that
the physical circumstances did not justify any departure from the level of
value determined by the Tribunal in respect of No.35. Mr Yardley also
considered the market transaction and demand factors which featured in the
decision at No.35 but found nothing to justify any distinction between its
value and that of the Property. The valuation date was the same in both
references.
20. Mr Yardley then considered
the Tribunal’s decision in respect of 11 Leicester Road a property which was
located east of Hampshire Street on the west side of Leicester Road opposite
Mandley Park. 11 Leicester Road was a similar size to the Property but was
said by the Tribunal to be in a much better position. The Tribunal determined
its value to be 15% above that of Mandley Park whereas the value of No.35 had
been determined at 20% less. 11 Leicester Road was also close to the shops,
other facilities and the Jewish quarter. It was also an end of terrace house
with a double frontage and off street parking. None of these factors, said Mr
Yardley, applied to the Property. The valuation date was also considerably
later, 31 July 2009, and values had risen since February 2005.
21. 23 Hampshire Street and 11 Leicester Road were “radically different” and Mr Yardley could find no reason arising
from the Tribunal’s decision in 11 Leicester Road to suggest that the value of 35 Hampshire Street in 2005 should be reconsidered. He could find no other evidence that
was not available to the professional advisers at the time of the two previous
references.
22. Mr Yardley therefore valued
the Property at £490 per m2,
the figure used by the Tribunal in the reference at 35 Hampshire Street. Using
an area of 102 m2 gave
a value of £49,980 which he rounded to £50,000. He explained that this was
slightly lower than the figure contained in the reply to the statement of case
because the area at that time had been mis-stated as 106 m2.
Conclusions
23. The valuation arguments
which are relevant to this reference have been fully and carefully considered
in the Tribunal’s two previous decisions at 35 Hampshire Street and 11 Leicester Road. The location of 35 Hampshire Street is very similar to that of the
subject property at 23 Hampshire Street. They were both mid-terrace houses on
the same side of the street just five properties apart and with the same
valuation date, 21 February 2005.
24. From the evidence I
conclude that there were differences in the physical attributes of the two
properties. Mr Yardley recognises this but says that the advantages of the
Property are balanced by its disadvantages. I disagree. In my opinion the
evidence favours No.23. Apart from the re-covered roof and the benefit of full,
rather than partial, central heating it had new downspouts and gulleys and a
renovated apex on the rear elevation. Both properties had been partially
re-glazed with double-glazed UPVC windows but No.23 had three rooms in which
the timber windows had been replaced, whereas No.35 only had two. The peeling
paintwork to the front of No.23 was, in my opinion, a minor decorative point of
repair. Mr Yardley also refers to the dampness in No.23 being worse than that
in No.35. However, in my opinion, Mr Griffiths’ argument that this dampness
was, at least in part, caused (or contributed to) by vandalism to, and want of
repair of, the adjoining properties that had been acquired by the council is
plausible and supported by the evidence. The effect of this want of repair and
security, which was admitted by the council in the evidence before the Tribunal
in ACQ/352/2008, is a consequence of the scheme and the deleterious effect upon
the value of the Property should be ignored.
25.
Mr Yardley says that the council in its statement of case had used an
incorrect measurement for the gross external area of the Property of 106 m2 and that “this was a
mistaken entry as the actual GEA for the reference property was 102 m2.” Mr Yardley did not
explain the provenance of this revised figure (or, indeed, the original figure).
It does not appear on the inspection sheets prepared by Mr Russell Fine on 17
August 2005. Mr Griffiths does not dispute this difference in measurement in
terms. In his rebuttal evidence he says that:
“It should be noted that
despite being slightly smaller than No.35 Hampshire Street, the 2 Properties
have been valued the same…”
He goes onto say that the council’s offer for the Property had
been increased after the Tribunal’s decision in ACQ/352/2008 to the same amount
as the determination for No.35, namely £52,000. That can be attributed to the
council’s belief at that time that the two properties had the same area. In
the absence of any evidence from Mr Griffiths to the contrary, and given his
tacit acceptance of the fact that No.23 was smaller than No.35 in the above
quotation, I accept the revised area of the Property at 102 m2 .
26. Mr Griffiths disputes Mr
Yardley’s claim that there is no new evidence of relevance that was unavailable
to the Tribunal at the two previous hearings. Firstly, he argues that the
Jewish community in the Mandley Park area was not a significant force in that
market. The Tribunal when determining that the value of Mandley Park was 20%
higher than that of Hampshire Street referred to the former’s appeal to the
local Jewish community. Mr Griffiths argues that the Jewish community was
traditionally centred in Higher Broughton in an area bounded by Northumberland Street, Leicester Road, Old Bury Road, Cavendish Road and Bury New Road. This
places that community around Clowes Park, to the north of the Property and to
the west, not east, of Leicester Road. Mr Griffiths supports his view by
reference to a document entitled “Briefing Note to Strategy and Regeneration Scrutiny:
Manchester and Salford Housing Market Renewal Pathfinder” (see paragraph 15
above) which gave brief details of the ethnic diversity of the Gainsborough Street area. I do not consider that a brief paragraph in an incomplete
document of uncertain provenance and authorship can reasonably be used to reach
the conclusion that Mr Griffiths draws from it. The document refers to a “high
level of ethnic diversity” but from the short extract that Mr Griffiths
produces it is not clear whether such ethnicity refers to national or cultural
characteristics. Thus the reference, for instance, to white British and Polish
residents may include Jewish people. Mr Griffiths assumes that it
excludes them and further assumes that the 14 “different ethnic groups” making
up 20% of the Gainsborough Street community are of equal size. There is no
evidence to support these assumptions. Mr Griffiths’ arguments also appear to
contradict what he said at the hearing into the reference at 11 Leicester Road
when it was his evidence that houses in the Mandley Park area, namely in
Bristol Street, Heaton Street, Symons Street, Gainsborough Street and Norton
Street all had mezuzot on the doorframes suggesting Jewish ownership.
27. Secondly, Mr Griffiths
asserts that were it not for the scheme the Jewish community would have
migrated southwards to Hampshire Street by the valuation date. He supports
this by noting how close that street was to the Jewish shops and the Jewish
boy’s school in Wellington Street East. Mr Griffiths says “it is obvious that
the community would have moved into those streets”. Hampshire Street is not
part of the area traditionally associated with the Jewish community (as that
area is defined by Mr Griffiths) and I place little weight upon the speculative
prospect that it would inevitably have become so in the no-scheme world,
although I note the Tribunal’s comments in the decision on 11 Leicester Road
that its boundaries have expanded.
28.
Thirdly, Mr Griffiths refers to an undated, unattributed document
entitled “Gainsborough Street Area Block Improvement Scheme” which he cites as
evidence of the poor condition of properties in the Mandley Park area,
suggesting (presumably) that the houses in that area are not worth 20% more
than those in Hampshire Street, a differential which the Tribunal found in its
decision on 35 Hampshire Street. This document appears to have been prepared
at or around the end of August 2009, some 4½ years after the valuation date. In
my opinion this document adds little to what was already recognised by the
Tribunal in its decision on 35 Hampshire Street where it said at paragraph 23:
“In terms of comparison between
the location of the subject property and Mandley Park, I am also mindful of the
fact that, as agreed by the council, the latter suffered equally from complaints
about degradation and social depravation prior to the schemes.”
29.
The final piece of new evidence that Mr Griffiths relies upon is the
equivalence of no scheme world settlements in Cardiff Street (in the Top
Streets area) and Gainsborough Street (in the Mandley Park area) that was
revealed in the Tribunal’s decision regarding 11 Leicester Road. Mr Griffiths
compares this equivalence with his own analysis of the comparative value of Hampshire Street properties and houses in the Top Streets area from which he concludes that
the former are 1.5 times the price of the latter:
“It
is an anomaly for Hampshire Street to be valued at any less than a Gainsborough Street area property in 2005.”
30. There are flaws in Mr
Griffiths’ argument. Firstly, his comparison between values in Hampshire Street and the Top Streets area in the mid 1990’s is based upon a limited number
of asking prices (not sales). The majority of the comparables are two bedroom
houses (No.23 has three bedrooms). Little is known about the condition of the
comparables although two, including one of the Hampshire Street properties, is
said to be improved. Three of the comparables do not appear to have central
heating. One of the Top Streets properties is noticeably cheaper than the rest
(£20,000) and is described as “dead cheap for quick sale”. Mr Griffiths’
analysis does not have an adequate foundation to support the robust conclusions
that he draws from it.
31. Secondly, the schedule of
sales that Mr Griffiths produced to show that the council’s offer of £21,000 for
the Property in March 2001 would have bought any property in the Gainsborough Street area gives the bare minimum of information; namely a date, the address
and the price. He says nothing about the size or condition of any of the
properties. I find that the schedule is too vague to be of any assistance. In
any event the schedule does not appear to support Mr Griffiths’ argument since 4
of the 13 properties which were sold within 6 months either side of the date of
the acquiring authority’s offer had higher prices than 23 Hampshire Street.
32. Thirdly the figures for the
values in the Top Streets area in 2004/5 were settlement figures for (with one
exception) two bedroom houses of unknown condition. Only five of the eleven
properties listed were sold within six months of the valuation date. I do not
consider these settlements to be sufficiently good evidence to support Mr
Griffith’s conclusion that Hampshire Street values were superior to those in
Top Streets.
33. Fourthly Mr Griffiths’ assertion
that the values in the Top Streets and Gainborough Street areas were the same
depended upon the acquiring authority’s evidence of Top Streets settlements in Cardiff Street. But these were not open market sales and the Tribunal did not refer to them
in its conclusions in ACQ/352/2010 and this parity of value was not referred to
in that decision.
34. Finally, values in 2009 are
of no relevance to the values of the Property at the valuation date in February
2005.
35. I have considered Mr
Griffiths’ arguments and the evidence which he describes as new since the two
previous hearing but I have found nothing to persuade me that the value that
the Tribunal placed on 35 Hampshire Street, at £490 per m2, was too low. There is
no evidence to support Mr Griffiths’ claim of £95,000 or £931 per m2. However, as I have
stated above I consider on the evidence that the condition of the Property was
probably better than that of No.35 and I therefore value it at £510 per m2or £52,020 which I round
to £52,000.
36. I therefore award
compensation in the sum of £52,000 there being no dispute in the reference
about any issue other than the value of the freehold interest.
37. Costs under the written
representation procedure are only awarded if there has been an unreasonable
failure on the part of the Claimant to accept an offer to settle, if either
party has behaved otherwise unreasonably, or the circumstances are in some
other respect exceptional. None of these factors apply in this instance and I
therefore make no award as to costs.
Dated
7 July 2011
A
J Trott FRICS
