Kenneth Gun Why v Cheltenham Borough Council

In assessing compensation for the compulsory acquisition of an unoccupied dwelling, open market value may reflect the property’s actual state, including the reasonable cost of repair, redecoration and clearance. It may also reflect local land charges binding on a purchaser at the valuation date. Speculative redevelopment value should not be added where the available planning and viability evidence shows no realistic hope value.

The assessment must produce the net open market value at the valuation date. A home loss payment is unavailable where the owner did not occupy the dwelling as their only or main residence throughout the statutory qualifying period.

The acquiring authority compulsorily purchased an unoccupied house whose poor condition, overgrown gardens and lack of security had adversely affected neighbourhood amenity. It took possession under a general vesting declaration on 19 May 2016, which was the valuation date.

The owner made no compensation claim. The authority referred the compensation issue to the Upper Tribunal, which determined the matter on written representations. The central issue was the property’s open market value, including its condition, binding local land charges, clearance costs and any redevelopment hope value.

1. Compensation was assessed at £140,000. The Tribunal accepted £210,000 as a reasonable estimate of the property’s open market value in fair condition.

2. The evidence justified a £50,000 deduction for necessary repair, redecoration and refitting. The property required substantial works, although its structural elements appeared generally sound.

3. The Tribunal held that the local land charges binding on successive owners at the valuation date should be deducted. Rounded to £15,000, those charges reduced the value to £145,000.

4. There was no redevelopment hope value. The planning authority wished to retain the established building line, and the only potentially viable alternative scheme would have been difficult to deliver and only marginally viable.

5. A further £5,000 was deducted for clearing the house and garden as at the valuation date. The resulting open market value was therefore £140,000.

6. The owner was not entitled to a home loss payment because he had not occupied the dwelling as his only or main residence throughout the year ending on the valuation date. No disturbance claim was made.

Not an appeal. The acquiring authority referred compensation following compulsory purchase to the Upper Tribunal for determination on written representations.