Dal Virk (Valuation Officer) v Moor Lane Self-Storage Limited

For rating purposes, a containerised self-storage hereditament is ordinarily valued by assessing the whole site and adding an appropriate value for the containers. The land beneath containers is not excluded merely because the containers occupy it. A cost-based method may be used where rental and receipts-and-expenditure evidence is unavailable. Known actual costs should generally form the starting point, adjusted for relevant inflation and then decapitalised at an appropriate rate. The statutory decapitalisation rate is not mandatory outside a contractor’s basis valuation, but may be adopted where no better evidence exists. An end allowance may be made for physical disadvantages such as a sloping site where the evidence justifies it.

The Valuation Officer appealed against a decision of the Valuation Tribunal for England concerning the rateable value of a container-based self-storage site in Birmingham. The VTE had assessed the property at £12,250 by valuing only the uncovered land, adding £150 for each container and applying a 5% allowance for the sloping site.

The appeal concerned whether the whole site should be valued, the correct site area, the appropriate value for the containers and the proper allowance for the slope. The appellant sought an assessment of £17,500, while the respondent supported the VTE’s determination.

1. Appeal allowed. The assessment was determined at a rateable value of £17,100 with effect from 8 April 2017. No order for costs was made.
2. The statutory hypothesis required the hereditament to be valued by reference to the rent reasonably expected from year to year. The material-day assumptions and locality matters were those identified in Local Government Finance Act 1988, Schedule 6, including matters affecting physical enjoyment, mode or category of occupation and the use or occupation of other premises in the locality.
3. The correct methodology was to value the whole site at the agreed rate of £10 per square metre and to add a value for the containers. The containers were intrinsic to the self-storage business and were enjoyed with the land. Excluding the land beneath them would produce the irrational result that installing containers diminished the value of the hereditament. The approach was consistent with Storehouse (UK) Limited v Wojcik (VO) [1991] LT RA 39.
4. The rental evidence and most comparable assessments were given little weight because they were insufficiently comparable or inadequately verified. The evidence did not establish a consistent Birmingham valuation tone for containers. The site area was determined at 1,453.75 square metres.
5. Because there was no reliable rental or receipts-and-expenditure evidence for the containers, a cost-based valuation was appropriate. Actual costs of £1,625 per container, plus delivery of £97.25, were adjusted for inflation to £1,634 at the antecedent valuation date. The additional £20 siting cost was unsupported and excluded. Following Bunyan (VO) v Acenden Limited [2023] UKUT 17 (LC), the statutory 4.4% rate was not mandatory for every cost-based valuation, but was appropriate here because no alternative rate was evidenced. This produced an annual value of £71.90 per standard container.
6. A 5% end allowance was allowed for the sloping site. The final calculation was £14,538 for the land plus £3,523 for 49 containers, less 5%, rounded to £17,100.

• Upper Tribunal (Lands Chamber) allowed the Valuation Officer’s appeal against the Valuation Tribunal for England’s decision dated 14 September 2022. The VTE’s rateable value of £12,250 was replaced by an assessment of £17,100.