Land taken for comprehensive redevelopment — Town centre scheme — Statutory planning assumptions — New use class B1 — Existing planning permission for “high-tech” development — Whether planning permission for offices could be assumed — Criticism of residual valuation method — Discount for backland
The subject property, a site of 0.64 of an acre previously used as a coal yard and situated near Bridge Street, High Wycombe, was the subject of a compulsory purchase order made under section 112 of the Town and Country Planning Act 1971. The land was being acquired to secure the comprehensive development of a new bus station, car park, bus depot and conversion of the existing bus station to retail purposes. The statutory planning assumptions for the site were as follows: use as a coal yard (now within new class B1 of the Town and Country Planning (Use Classes) Order 1987); wholesale warehouse development as per the Town Map zoning; the bus station development under the acquiring authority’s scheme; or development in accordance with a planning permission granted in 1985 for “high-tech” purposes.
For the claimant company, Keith Murray FRICS spoke to a valuation for the land taken assuming planning permission for 14,000 sq ft of offices of £577,500 based on figures derived from comparable sales of between £47.66 and £65.47 per sq ft of net developable area which he discounted to give £41.25 for the site location; his alternative valuation for 17,400 sq ft of “high-tech” development was £304,000. Ian Hayward FRICS, who gave evidence for the acquiring authority and who thought that the land was unsuitable for office development, spoke to a valuation of £240,000 for “high-tech”, light industrial or warehouse use. He assumed that a “high-tech” building would have to be built first before a change of use to offices under the use classes order.
Held 1. It was unnecessary to decide the effect of class B1 of the new use classes order and whether office development could be directly carried out under the original 1985 planning permission for “high-tech”. On the evidence it was clear that planning permission for office development would be readily granted, although the site was far from ideal as it was backland with a narrow frontage.
2. Although there are limitations in the use of the residual method of valuation, the method may be a helpful test to apply as a check to the primary valuation based on transactions of comparable premises. The valuation for the claimants of £577,500 best reflected prevailing levels of values for centrally located sites, but two factors had to be taken into account: delay in obtaining planning permission and risk in developing backland for offices in advance of other office development in more favourable locations and before values have become established. After discounting for these factors, the award for the value of the land taken was £495,000 to which was added an agreed sum of £25,000 for severance and injurious affection.
MEPC Housing Ltd v East Sussex County Council
(1981) 258 EG 759 referred to.
Joseph Harper (instructed by Denton Hall Burgin & Warrens) appeared for the claimant company; and Robin Campbell (instructed by the solicitor to Wycombe District Council) appeared for the acquiring authority.
