Compare the Market Ltd v Karen Giles

In valuing a composite hereditament for non-domestic rating, layout and physical separation may justify distinct end allowances. The court should examine those factors separately where they affect different parts of the property, and should give greatest weight to genuinely comparable evidence. Assessments of other properties can provide guidance on valuation practice, but their evidential value depends on physical, functional and geographical comparability and may be reduced where the assessment itself appears questionable. Applying the statutory rental hypothesis, the Tribunal determined the assessment by valuing the component buildings, allowing for layout, quantum and fragmentation, and then rounding the result.

Compare the Market Ltd appealed against the Valuation Tribunal for England’s dismissal of its challenge to a rateable value of £945,000 in the 2017 rating list. The hereditament comprised Pegasus House and Saxon House, two office buildings in Peterborough which the parties agreed should be assessed together. The dispute concerned the appropriate allowances for Pegasus House’s unusual internal layout and for the physical separation of the buildings. The appellant sought a rateable value of £885,000; the Valuation Officer supported the existing assessment. The central issues were the weight to be given to rental and comparable evidence and the proper valuation allowances.

1. Appeal allowed. The assessment was determined at a rateable value of £905,000 with effect from 1 April 2017.
2. Under Schedule 6 to the Local Government Finance Act 1988, the hereditament was to be valued by reference to the rent reasonably expected on the statutory assumptions at the antecedent valuation date, while taking the matters specified for the material day into account.
3. The agreed tone was £95 per m², with a 10% allowance for quantum. The two disputed matters were examined separately because the layout issue affected Pegasus House, whereas fragmentation concerned the separation between the buildings.
4. The Tribunal rejected several comparables as too different in size, age, use, location or configuration. The British Antarctic Survey premises and Unit 29 at Cambridge Science Park were sufficiently similar to support a 5% layout allowance for Pegasus House.
5. For fragmentation, the most useful evidence was the Office Village, Cambridge Business Park and Abbey Barns assessments. Despite reservations about some assessments, they supported a 5% allowance for the two buildings. The relative size of Saxon House was material, although the physical gap between the buildings was substantial.
6. The resulting calculation was £849,719 for Pegasus House, less 5% for layout; £257,742 for Saxon House; less 10% for quantum and 5% for fragmentation, producing £905,229, rounded to £905,000.

• Upper Tribunal (Lands Chamber): allowed the appeal from the Valuation Tribunal for England and reduced the assessment from £945,000 to £905,000, effective from 1 April 2017.
• Valuation Tribunal for England: dismissed the appellant’s appeal against the existing assessment. No citation is stated in the judgment.