Lotus Group Limited v Nicola Johnson (Valuation Officer)

In rating valuation, earlier tribunal propositions about the order of considering evidence are guidance, not rules to be applied mechanically. The valuation must be reached by considering the available rental and assessment evidence in the round. Rating assessments produced through administrative processes such as billing authority reports may carry some qualified weight as the valuation officer’s estimate, although they may be corrected when scrutinised. Comparable evidence must be assessed for location, quality, condition, specification and the reliability of the underlying valuation process. A raised floor may justify an uplift where its practical utility is established.

Lotus Group Limited appealed against a decision of the Valuation Tribunal for England concerning the rateable value of office premises at 37–39 Queen Elizabeth Street, London, in the 2017 Rating List. The VTE had dismissed the appeal and confirmed an assessment stated to be £477,500, although the correct underlying figure was £475,000. Before the Upper Tribunal, the ratepayer sought a rateable value of £387,500 and the Valuation Officer contended for £435,000.

The principal issues were the appropriate basic rate per square metre, the weight to be given to rental transactions and comparable rating assessments, and whether the property’s raised floors justified a 5% uplift.

1. Appeal allowed. The rateable value was determined at £435,000 with effect from 1 April 2017. No order for costs was made.
2. Rateable value was assessed under paragraph 2(1) of Schedule 6 to the Local Government Finance Act 1988, by reference to the rent reasonably expected on the antecedent valuation date of 1 April 2015. Under paragraphs 2(6) and 2(7)(a), matters affecting the physical state or enjoyment of the hereditament were taken as at the material day, 1 April 2017.
3. The propositions in Lotus and Delta Limited v Culverwell (VO) and Leicester City Council [1976] RA 141 were useful guidance on the order in which evidence might be considered, but were not rules or a mantra. Consistently with Lamb (VO) v Go Outdoors [2015] UKUT 366 (LC), all the evidence had to be considered in the round.
4. Rental evidence was important and could not properly be disregarded in favour of a tone-led approach. Comparable assessments also required scrutiny. Assessments entered following billing authority reports or similar administrative processes were not automatically worthless: they represented the valuation officer’s estimate at that stage and could carry qualified weight, subject to correction where known to be inaccurate.
5. The strongest evidence came from nearby buildings with comparable characteristics, considered against differences in location, quality, refurbishment, reception facilities, natural light, air-conditioning, raised floors and the reliability of the relevant transactions or assessments. The appropriate base value was £275 per square metre. Inspection showed that the raised floors were used in the usual way and justified a 5% uplift. The resulting valuation was £435,000.

• Upper Tribunal (Lands Chamber): the appeal against the Valuation Tribunal for England was allowed. The rateable value was determined at £435,000 with effect from 1 April 2017.
• Valuation Tribunal for England: the ratepayer’s appeal was dismissed and the assessment was confirmed, subject to the correction identified by the Upper Tribunal.