Heath Colin Alridge & Ors v London Southend Airport Company Limited

Under Part 1 of the Land Compensation Act 1973, depreciation is assessed by reference to the market value of the claimant’s interest, not the claimant’s personal experience. Noise caused by the use of public works can be a compensatable physical factor. Section 4(2) permits the valuation to reflect the first claim day’s reasonable expectation of intensified use, but it does not permit a separate award for future loss which was not reflected in value on that day. Valuation evidence must be evaluated in the round. A detailed statistical model may be rejected where its assumptions, weighting and adjustments produce unreliable or inconsistent results.

The claimants were owners of ten representative residential properties near London Southend Airport. They referred claims to the Upper Tribunal under Part 1 of the Land Compensation Act 1973, alleging that the runway extension, first used on 8 March 2012, had depreciated their properties through increased aircraft noise. The parties agreed that the claims were representative of 190 claims and that the first claim day was 8 March 2013.

The claimants relied principally on repeat-sales and noise analysis, and sought additional compensation for expected intensification of airport use. The airport operator contended that the extension had caused no diminution in value. The central issues were whether relevant physical factors had caused depreciation and how any depreciation, including the effect of reasonably expected intensification, should be valued.

1. Entitlement and valuation basis. The claims fell within Part 1 of the Land Compensation Act 1973. The relevant comparison was between the value of each interest with the runway extension in use and its value with the extension built but not in use. The Tribunal had to determine the effect on the market, rather than the effect on individual claimants. The claimants’ evidence about their experiences was relevant but not determinative (paras [11]-[18], [59]-[60], [61]).
2. Depreciation. The use of the runway extension had caused noise-related depreciation in most of the lead properties. The conclusion was based on the noise evidence, the factual evidence, the inspection and the totality of the valuation material. The Tribunal rejected the airport operator’s conclusion that no property had been depreciated (paras [117]-[124], [167]-[169]).
3. Valuation evidence. The claimants’ repeat-sales model was flawed. It treated absolute percentage-point differences as constant despite materially different market conditions, and was affected by uneven weighting, subjective adjustments, variable sale periods and other methodological weaknesses. The appropriate relationship was relative rather than absolute: the pre-event ratio of affected to unaffected growth should be maintained post-event. The Tribunal therefore rejected the claimed 16% growth foregone and assessed depreciation by valuation judgment, having regard to the combined change in daytime and night-time noise (paras [127]-[136], [137]-[166]).
4. Intensification. Section 4(2) requires account to be taken of reasonably expected intensification as it would affect value on the first claim day. It does not authorise a separate allowance for future depreciation which had not yet been suffered or reflected in value. The proposed additional 5% allowance was therefore misconceived (paras [171]-[174]).
5. Disposition. Compensation was awarded for nine properties, ranging from £4,000 to £17,000. No compensation was awarded for 5 Taunton Drive because the relevant noise increase was assessed as minimal and non-compensatable. The determination was final apart from costs (paras [169]-[176]).