UPPER TRIBUNAL (LANDS CHAMBER)

	
UT Neutral citation number: [2011] UKUT 126 (LC)
LT Case Number: ACQ/313/2010

	TRIBUNALS, COURTS AND ENFORCEMENT ACT 2007

COMPENSATION – compulsory purchase – dwelling house in poor condition – value – comparables – cost of necessary works – compensation determined at £175,000

	IN THE MATTER OF A NOTICE OF REFERENCE

BETWEEN	LONDON BOROUGH OF	Acquiring
	NEWHAM 	Authority

	and

	TERRY NAVARRO PEART	Potential
		Claimant

	Re:	72 Cranmer Road
	Forest Gate	
	London
		E7 0JL	

	Before: N J Rose FRICS

	Sitting at 43-45 Bedford Square, London, WC1B 3AS
	on 17 February 2011

Jonathan Wills, instructed by Director of Legal and Democratic Services, London Borough of Newham, for the Acquiring Authority
The potential claimant did not appear and was not represented

	DECISION
Introduction
1.	This is a reference by the London Borough of Newham, the acquiring authority, to determine the compensation which it must pay, arising from the compulsory acquisition of the freehold interest in a dwellinghouse known as 72 Cranmer Road, London, E7 0JL (the subject property).  That property was compulsorily acquired under the Newham (72 Cranmer Road, London, E7 0JL) Compulsory Purchase Order 2002, made on 20 July 2001 and confirmed by the Secretary of State for Communities and Local Government on 4 July 2002.  The acquiring authority made a general vesting declaration in respect of the property on 19 September 2002 and the vesting date was 5 November 2002, which is the date of valuation.  
2.	The owner of the freehold interest in the subject property is Mr Terry Navarro Peart.  Mr Peart has not submitted a claim for compensation, despite unsuccessfully challenging the confirmation of the CPO by way of judicial review.
3.	Mr Jonathan Wills of counsel appeared for the acquiring authority.  He called factual evidence from Ms Noreen Shabir, legal assistant with the acquiring authority, and expert evidence from Mr David Drane MRICS, who is employed by DVS, the commercial arm of the Valuation Office Agency.  Mr Drane has worked for the VOA since 1990 and he has been engaged in the valuation of residential and commercial property in the London Borough of Newham for the last 10 years.  He inspected the subject property in 20 December 2002.  The potential claimant, Mr Peart, did not appear at the hearing and was not represented, although I am satisfied that the acquiring authority has taken all reasonable steps to inform him of the reference to the Tribunal.  I made an unaccompanied external inspection of the subject property and certain comparable properties which had been referred to on the morning of 25 March 2011.
Facts
4.	From the evidence I find the following facts.  The subject property is a mid-terrace house built in about 1885 on two storeys with a front bay to ground and first floors and a two storey back addition.  It is situated close to Capel Road and Wanstead Flats in an established residential area.  Wanstead Park and Manor Park railway stations are nearby.
5.	The subject property was designed to accommodate two receptions rooms (as a through lounge) with a back addition kitchen/dining room on the ground floor and three bedrooms and bathroom/wc on the first floor.  The rear addition bedroom was, however, crudely subdivided to provide two small rooms.  
6.	The property was in below average condition generally.  It required a certain degree of refurbishment and repair to bring it up to good mortgageable standard.  The roof covering required overhaul and replacement.  Water ingress in the main building had caused damage that had over time transmitted to the ceiling and floors below.  The guttering and downpipes were in poor condition and needed to be replaced.  The windows, joinery and sills throughout were in below average condition with rotten timber in various place.  The timber framed single glazed windows and exterior doors required replacement with new double glazed units.  Re-wiring and some replacement of plumbing was required.  There was a need for some re-plastering and the replacement of certain ceilings where water ingress from a past roof leak had caused damage.  External rendering at the front and rear required patching in places.  
Mr Drane’s valuation
7.	Mr Drane valued the subject property by reference to three properties which were sold in the open market in the period surrounding the valuation date.  Brief details are as follows: 
60 Cranmer Road, E7
A three bedroom mid-terrace house built in 1880.  Sale completed 14 June 2002 at £215,000.  Excellent condition.
81 Chestnut Avenue, E7
A three bedroom mid-terrace house built in 1890.  Sale completed 4 October 2002 at £160,000.  Poor condition, requiring a large amount of refurbishment.
120 Chestnut Avenue, E7
A three bedroom mid-terrace house built in 1890.  Sale agreed 20 December 2002 at £212,000.  Reasonable condition.
8.	This evidence, together with his general experience of property values in the area, led Mr Drane to conclude that a typical late 19th century three bedroom house in the locality would have achieved around £215,000 if in good order and fully refurbished.  He estimated that it would have cost a minimum of £35,000 to put the property into good mortgageable condition.  He considered that, in its existing condition, the property would have been of interest to a small building firm or the like.  Such a purchaser would have expected a return on its investment.  Given the relative strength of the property market at the time he allowed a conservative figure of £5,000 for profit/risk, producing a value for the subject property in its existing state of £175,000.
Conclusion
9.	Mr Drane is an experienced surveyor.  In the absence of any other expert evidence I accept his valuation.  I determine the compensation payable for the freehold interest in the subject property at £175,000.  Statutory interest is payable in addition in the usual way.  I make no order as to costs.
Dated 29 March 2011

N J Rose FRICS