Andrew Fraser v Hertsmere Borough Council

Compensation for compulsorily acquired land is assessed by applying the statutory market-value rule to the property as it stood at the valuation date. Comparable evidence must be properly analysed, including differences in size, location, amenities, condition and development potential.

Repair costs are not automatically deductible at their full cost. The assessment must reflect the extent to which proposed works would improve the property beyond the condition of the comparables. Development potential should not be added separately where it is already reflected in the comparable evidence. The compensation figure must then be adjusted for the property’s actual condition and relevant physical attributes.

The claimant sought compensation for a house compulsorily acquired by Hertsmere Borough Council after an Emergency Prohibition Order under section 43 of the Housing Act 2004. The property had been unoccupied and in substantial disrepair. The compulsory purchase order was confirmed in 2017, and the freehold vested in the Council on 9 March 2018.

The parties disagreed about the value under Rule 2 of section 5 of the Land Compensation Act 1961, the appropriate deduction for repairs, and whether the property’s corner plot created additional development potential.

1. The Tribunal determined the property’s value at £345,000, rounded from £345,737. The Basic Loss Payment was £25,875, with statutory interest payable at the prevailing rate.

2. Under Rule 2 of section 5 of the Land Compensation Act 1961, the starting point was the amount the property might have realised in the open market from a willing seller. The comparable evidence had to be examined critically rather than averaged mechanically. The sale of 63 The Walk was preferred to 10 Strafford Gate because it was closer, sold before the valuation date, and reflected development prospects rather than an extant planning permission.

3. The Tribunal adjusted the comparable-based figure for the property’s smaller size, its plot and location, the absence of a garage and driveway, and its proximity to the town centre. This produced a value of £431,775 before adjustments for condition and development.

4. Repair costs could not simply be equated with a corresponding reduction in value. The proposed works included substantial refurbishment beyond the condition of the comparables. The Tribunal therefore applied different percentages to the quoted works, allowing the full structural cost but reduced allowances for finishes, fittings, services, roof works, landscaping, preliminaries and provisional sums. The resulting deduction was £86,038.

5. No separate addition for development potential was appropriate. The comparable transactions already reflected the strong possibility of planning permission for extension or conversion. The proposed separate dwelling was unsupported by adequate planning evidence and did not justify an additional allowance.

First-instance reference in the Upper Tribunal (Lands Chamber). The decision states that any party may appeal to the Court of Appeal on a point of law with permission.