Leasehold enfranchisement – Leasehold Reform, Housing and Urban Development Act 1993 – Lease extension – Valuation – Relativity – Property in Midlands – No sufficient evidence of comparable transactions – Leasehold Valuation Tribunal adopting relativity percentage derived from graph of previous Midlands LVT decisions – Whether alternative graph providing better evidence of relativity
These were four consolidated appeals concerning applications for extended leases of five properties in the Midlands under section 48 of the Leasehold Reform, Housing and Urban Development Act 1993. The appellant was the freeholder in each case. In the course of determining the premium payable for the new leases, the Leasehold Valuation Tribunal (LVT) adopted figures between 86% and 93% as the appropriate relativity between the leasehold and freehold values of the properties. In doing so, it preferred the evidence advanced by the lessees, derived from a “Midlands graph of relativity” constructed by the West Midlands firm Lawrence & Wightman. That graph used only Midlands LVT decisions, extracted from the composite “Lease graph” of relativity compiled by the Leasehold Advisory Service from LVT decisions between 1994 and 2007.
The appellants had relied on the Nesbitt & Co graph of relativity contained in a RICS research paper of October 2009. That graph included Greater London, a proportion of provincial towns covering the south coast and the Midlands region and also included settlement evidence. The LVT rejected that graph on the ground that Midlands information should generally be preferred to graphs drawing more heavily on information from the South East in general and London in particular.
On appeal from the LVT’s decision, the appellants contended that the LVT had erred in basing its decision on relativity on previous LVT decisions and that the best evidence was the Lease graph, since it was totally independent and not reliant on settlement evidence.
Decision: The appeal was allowed. In the absence of relevant comparable evidence of recent transactions, the only question on relativity was which graph should be relied on. It was proper to reject the Nesbitt & Co graph since it was based solely on settlement evidence. However, the determination should not be based on the Lawrence & Wightman Midlands graph since it was based only on a small sample extracted from the Lease graph. The Midlands graph was out of kilter with any of the graphs reproduced in the RICS research paper and there was no evidence that there were particular regional variations in relativity percentages, other than in prime central London. The Lease graph was the most suitable graph on which to base a decision since it was a broad geographical analysis of a large number of LVT decisions; accordingly, figures should be adopted based on the Lease graph. Although that meant relying on a graph that was based only on past LVT decisions, that was the only available option in the absence of any reliable transactional evidence. The Lease graph was more representative of appropriate relativities than the Midlands graph. However, that decision should not be seen as setting a precedent in other cases where evidence more reliable than the Lease graph was available.
Per curiam: The RICS research paper contains details of a variety of graphs prepared by surveyors and firms that acted for both landlords and tenants, and provides a graphical analysis based on a large number of LVT decisions, settlements and valuation opinion. Collectively, these represent the broadest currently available study relevant to the issue of relativity. It might assist valuers and tribunals, in cases where reliance on such information is the only available option, to produce a composite graph representing, by a single curve, the mid-point of that substantial body of evidence over a wide area.
These were appeals by the appellant freeholders, Coolrace Ltd, Midlands Freeholds Ltd and Fell Estates Ltd, from decisions of the LVT on the relativity percentage to be adopted when determining the premium payable by lessees for extended leases of four properties in the Midlands under the Leasehold Reform, Housing and Urban Development Act 1993.
Anthony Radevsky (instructed by Grove Tompkins Bosworth, of Birmingham) appeared for the appellants; the lessees did not respond to the appeal.
Giving his decision, Mr Paul R Francis FRICS said:
Introduction
1. These are four consolidated appeals against decisions of the Midlands Leasehold Valuation Tribunal which determined the premiums payable for extended leases on five properties in the West Midlands, together with legal costs and valuers’ fees relating to each under the provisions of section 48 of the Leasehold Reform, Housing and Urban Development Act 1993.
2. In each case, the appellant freeholders (the respondents before the LVT), applied to the LVT for permission to appeal on the grounds that the tribunal made wrong determinations on the subject of relativity. The decision relating to legal and valuers’ fees was an additional ground in one case, and deferment rate in another. The applications were refused. In subsequently granting permission in respect of LRA/39/2011, LRA/45/2011 and LRA/47/2011, the President of this tribunal said:
“1. It is strongly arguable that, having regard to the observations of the Lands Tribunal in Arrowdell Ltd v Coniston Court (North) Hove Ltd [2007] RVR 39 [38], the LVT was wrong to base its determination of relativity on previous LVT decisions.
2. This appeal will be limited to the issue of relativity and be by way of rehearing.
3. It should be borne in mind that expressions of opinion as to value, to be treated as expert evidence, need to be independent.
4. …”
In respect of LRA/61/2011, the President said:
“1. In referring in [20] to a “line of Tribunal decisions” and deciding in [21] that “the established (relativity) percentages in the Midlands should be used”, it appears that the LVT may have wrongly based its decision largely on previous LVT decisions, notwithstanding its reference to having adopted a broad brush approach.
2. The appeal will be restricted to the issue of relativity…”
3. The only issue before me was, therefore, the question of the appropriate relativity between leasehold and freehold value in each case, and from where that figure should be derived. None of the respondents elected to take part. Mr Anthony Radevsky of counsel appeared for the appellant freeholders and called Mr Kenneth Frederick Davis FRICS, a consultant to Cottons, Chartered Surveyors, of Edgbaston, Birmingham, who gave expert valuation evidence.
Facts
4. The relevant facts relating to each of the cases are as follows.
5. LRA/39/2011 (Coolrace Ltd) 84 Southcrest Road, Lodge Park, Redditch, Worcs B98 7HZ. This is a ground-floor maisonette within a block of eight similar units in a residential suburb in the fringe of Redditch, about 15 miles from Birmingham city centre. The accommodation comprises lounge, kitchen, two double bedrooms and bathroom and there are gardens to front and rear. On street parking is available. There were 49 years remaining unexpired on the lease. Before the LVT, Joe Moore Midlands Valuations Ltd for the applicant lessees adopted the “Midlands Graph of Relativity” which had been constructed by Lawrence and Wightman (a West Midlands firm) using solely Midlands LVT decisions (about 40 to 50 cases) extracted from the “Lease graph” – a composite graph of relativity compiled by The Leasehold Advisory Service from 717 LVT decisions throughout England (including prime central London (PCL) between 1994 and 2007. They contained no settlement evidence. He sought a relativity of 86%.
6. Mindful of this tribunal’s advice in Arrowdell, and it having been agreed that there was no relevant evidence of present leasehold values available in this case, Mr Matthew Fell (who was acting for the freeholders in respect of each of the appeal properties, and declared an interest) adopted the Nesbitt & Co Graph of Relativity, which was produced in the RICS research paper that followed Arrowdell, and sought a relativity of 74.5%. That graph included Greater London, a proportion of provincial towns covering the south coast and the Midlands region and also included settlement evidence. He argued that the Lawrence and Wightman Graph, being reliant solely on LVT decisions, should be rejected as it was improbable that it reflected no-Act world values. A graph that included negotiated settlements, he said, had a broader base and he did not agree, in cross-examination, to the suggestion that settlement evidence may well reflect factors other than market forces.
7. The LVT preferred the applicants’ case and adopted a relativity of 86%, producing a premium of £9,830. In doing so, they said:
“26. … The tribunal considers that graphs based upon the Midlands information can generally be preferred to ones that draw more heavily on information from the South East in general and London in particular. There can be local markets and the average or unit cost of leasehold flats is generally lower in the Midlands than in London….
27. Further, the tribunal rejects the argument that reliance on other tribunal decisions creates some sort of circularity or decision basis isolated from the market at large. Whilst some decisions will have been based on previous tribunal decisions, there will frequently be an admixture of market evidence or reliance on tribunal decisions that are entirely market based (for example, that of 31 Griffin Court, Edgbaston). The tribunal will generally prefer market evidence where it is available, and will almost always have regard to the tone of the market when considering the outcome of graphic evidence. Underlying every tribunal decision is the statutory requirements for assessing valuation, and these relate to the no-Act market.
28. Furthermore, it is a false hypothesis to assume that settlements do not suffer from a number of potential distortions: there are poorly represented tenants, there are tenants who may be subject to pressures unrelated to the market place, and many settlements amount to “second guessing” what will happen at a tribunal, whilst taking into account the cost and inconvenience of entering into a formal dispute [known as the Delaforce effect]…”
8. LRA/45/2011 (Midland Freeholds Ltd) 38 Lyneham Gardens, Sutton Coldfield B76 1XH. This is a purpose-built ground-floor maisonette about eight miles north-east of Birmingham, built by Bryant Homes Ltd, and contains living room, kitchen, two bedrooms and bathroom. There is a garage in a separate block. With 63.67 years remaining, the applicants, through their surveyor, Mr A W Brunt FRICS, sought a relativity of 93% based upon the Lawrence and Wightman Midlands graph. Mr Fell, again relying on the Nesbitt & Co graph, sought 87%. The LVT accepted the applicant tenants’ arguments and adopted 93%, giving a premium of £6,059, saying:
“28 The tribunal determined that as the geographical spread of the Nesbitt & Co graph was expressed to be predominantly Greater London and the outer suburbs with a proportion of provincial towns covering the south coast and Midlands region it was inappropriate to adhere rigidly to it.”
9. LRA/47/2011 (Fell Estates Ltd) 33E Leigh Court, Mellish Road, Walsall WS4 2DQ. A second-floor two-bedroom flat in a purpose-built block about two miles from Walsall town centre. 59.26 years unexpired. Mr Brunt for the applicants sought a relativity of 90% based upon the Midlands graph, with Mr Fell seeking 82.5% (Nesbitt & Co graph). The LVT, using the same wording as in respect of 38 Lyneham Gardens determined 90% and a premium of £8,650.
10. LRA/61/2011 (Midland Freeholds Ltd) 36 & 40 Bickton Close, Erdington, Birmingham B24 0JA. These are two first floor maisonettes in a purpose built block some three miles north of Birmingham city centre. Each has two bedrooms and a garage in a separate block, and their leases had 58.48 and 58.14 years unexpired respectively. Mr Brunt for the applicants sought a relativity of 91% on each, and Mr Fell sought 82%. In these cases, there was evidence of sales of both extended and unextended leases in Bickton Close.
11. The LVT said:
“16. …. It is very useful to have a reasonable number of direct comparables in the same road… The tribunal considers that the starting point for determining the extended lease value for both properties is £91,500. There is a direct comparable at this price at 21 Bickton Close [extended], and the sale date is between the valuation dates.
19. There are two properties in the table at [9] which sold on the existing lease. The earlier of these was 39 Bickton Close, which was sold in December 2008 for £94,000. The more recent, and hence the most useful, is 53 Bickton Close which was sold in July 2010 for £80,000. 39 Bickton Close seems at variance with the other sales in the table, but the market has declined since that sale. The tribunal note the advice in Arrowdell … and whilst the various comparability graphs may be imperfect, tribunals should have regard to what is available in the absence of evidence compelling the adoption of other figures. The tribunal do not find that the single comparable of 53 Bickton Close is itself compelling evidence, but is a useful cross-check against the values obtained by applying relativity.
20. The evidence brought forward at the hearing is that in prime central London and the south coast, relativity is greater than in the Midlands area. The Nesbitt & Co graph may be the only graph containing any figures for the Midlands in the RICS graphs, but in view of the obviously limited amount which it contains, the tribunal considers that it should be treated with caution. Mr Brunt’s suggestion of 91% is broadly in line with the line of tribunal decisions he has brought forward. Although it was not introduced into evidence the percentage used was stated by Mr Brunt to be in line with the graph which is used regularly in the Midlands area and is known as the “Lawrence and Wightman” graph.
21. The tribunal considers that the percentage chosen by Mr Brunt is more appropriate than the lower percentage extracted from the Nesbitt & Co graph by Mr Fell. The tribunal accepts the evidence that relativities are higher in London and the South and feel that the established percentages in the Midlands should be used. However, the tribunal prefers to adopt a “broad brush” approach and finds that a relativity of 90% should be applied to both properties….”
In the light of this conclusion, they determined premiums of £6,569 (No 36) and £6,602 (No 40).
The case for the appellants
12. Mr Davis is a chartered surveyor, and has practised in the West Midlands for over 40 years, specialising in leasehold enfranchisement matters. He set out the procedure he adopts in undertaking lease extension or collective enfranchisement valuations which initially includes research of websites such as Rightmove, Nethouseprices and Mouseprices to obtain recent sale prices and asking prices, and contact with agents in the area. If there is clear and good evidence of sales of very similar properties with both extended and unextended leases, then it is possible for a suitable relativity to be established. However, such comprehensive and compelling evidence is rarely available, and there was no reliable open market or settlement evidence from which relativity can be established in any of these cases. It is necessary then, he said, to look at recent LVT decisions relating to the same development and adopt an appropriate percentage from that. Again, if this type of evidence is unavailable (as here), and following the Lands Tribunal and Upper Tribunal (Lands Chamber) advice in Arrowdell and Nailrile Ltd v Earl Cadogan [2009] 2 EGLR 151, reliance upon an appropriate graph of relativity is appropriate.
13. In Arrowdell, the tribunal (the President and NJ Rose FRICS) said, at [39]:
“The difficulty that confronts every leasehold valuation tribunal, as it now confronts us, in seeking to determine the appropriate relativity to apply in a particular case is the inadequacy of the available evidence. If no assistance is to be derived from earlier leasehold valuation tribunal decisions for the reasons we have just given, the same will go for settlements that have themselves been based on such decisions. In such circumstances, in our view, it is necessary for the tribunal to do the best it can with any evidence of transactions that can usefully be applied, even though such transactions take place in the real world rather than the no-Act world. Regard can also be had to graphs of relativity, as we say below, and later on we suggest that greater guidance could be derived from this particular type of evidence.”
The tribunal then observed, at [57]:
“As we have said above, we have been acutely aware of the difficulty of reaching a satisfactory conclusion on relativity in the light of the inadequacy of the available evidence, and it is clear that this is a problem that is likely to confront leasehold valuation tribunals in all such cases. The likelihood is that decisions will be varied and inconsistent, while if local perceptions of relativities are built up as the result of decisions and settlements it is improbable that these will properly reflect no-Act values. Against this background we consider that graphs of relativity are capable of providing the most useful guidance. While it may be that relativities will vary between one type of property and another and from area to area, we think that there is little doubt that the predominant factor is the length of the term. It ought, we believe, to be possible to produce standard graphs, distinguishing between mortgage-dependent markets and those that are not so dependent, on the basis of a survey of assessments made by experienced valuers addressing themselves properly to the hypothetical no-Act world. We express the hope that the Royal Institution of Chartered Surveyors may find itself able to carry out such an exercise and to produce guidance in the form of standard graphs that can readily be applied by valuers in carrying out enfranchisement valuations. Such graphs could be used as evidence by leasehold valuation tribunals, with the relativities shown being applied by them in the absence of evidence compelling the adoption of other figures.”
14. In Nailrile, the tribunal agreed, and said, at [229(s)]:
“Relativity is best established by doing the best one can with such transaction evidence as may be available and with graphs of relativity…”
15. Mr Davis said that the research document that the RICS had produced following the consultation undertaken by a number of its members (known as the Leasehold Relativities Group) prompted by Arrowdell, showed that it had not been possible for a consensus to be reached. The research report reproduced a number of graphs of relativity, but Lawrence and Wightman, who had produced the Midlands graph relied upon by the applicant lessees, had not been a contributor to the exercise. Mr Davis said that he had spoken at length to Mr Nesbitt in respect of his graph and it was apparent that out of 250 or so cases, the Midlands ones amounted to only around 40. It had not been possible for these to be separated out, although Mr Nesbitt had said that, in his view, relativity should be consistent throughout the country. Mr Nesbitt’s graph was, significantly, also based upon settlements which, Mr Davis said, had the potential to skew the figures. There could be many cases where the tenants were not represented and where the Delaforce effect came into play.
16. Having considered all the graphs that had been reproduced, Mr Davis said that he had concluded the Lease graph was likely to be the most reliable. It also resulted in percentages that were more favourable to the lessees than the Nesbitt graph that had been relied upon below. The Lease graph was based upon a large number of LVT decisions throughout the country for the period 1994 to 2007, including 54 cases in the Midlands. Although a proportion of the cases were in PCL, these amounted to only 108 out of a total of 717. The benefit of the Lease graph, he said, was that both landlord and tenant have taken the decision to go to the tribunal. It does not include settlements. Each LVT case has either been decided by open market evidence or the use of graphs of relativity, and although they were based upon the evidence given to them, and some cases may have been uncontested, the graph is made up from a very wide sample, and thus any inconsistencies will be ironed out. It is likely therefore, that the Lease graph will be the most accurate guide to relativities, as it includes no Delaforce effect.
17. Mr Davis said that it was clear from looking at all the graphs reproduced in the RICS research document that the Lawrence & Wightman Midlands graph was way out of kilter with all the other results, but there was no reason why the West Midlands should be any different from any other region of the country (except PCL). Nobody had suggested in the negotiations that had taken place that there was a particular regional element to relativity. The Lawrence and Wightman Midlands graph was also a very small sample and related to a small spread of unexpired lease lengths. It was worth noting also that during the period 2007 to December 2009, the Midlands graph had not been relied upon in any negotiations that he had had, including on a large number of cases on the Calthorpe Estate where Mr Nigel Thompson (who was the one of instigators of that graph), was a former chief executive. Continued use of it by the Midlands LVT would mean that their decisions became self-perpetuating.
18. Mr Davis said that he had acted against Mr Rutledge of Lawrence and Wightman in a case relating to 34 Whittington Grove, Stechford, Birmingham where the LVT had preferred his adoption of the Lease graph to Mr Rutledge’s Midlands graph. Also, he referred to five Midlands LVT cases where decisions had been issued in February 2011 relating to properties in Halesowen, West Midlands. There had been criticism of the evidence of both sides’ surveyors, and the LVT had said in each case (one of which was BIR/OOCR/OLR/2010/0088 relating to 91 Apperley Way, Halesowen):
“9. Mr Moore has been unable to find any evidence of extended lease sales… He has used the graph prepared by Lawrence and Wightman which gave a relativity of just over 93% as both a guide and a check. However, on being questioned by the tribunal, he conceded that the Lawrence and Wightman figure was too high, and he had “come down from that”.
10. We are not persuaded by Mr Moore’s argument. There is very little evidential value in the analysis of a small number of LVT decisions. The Lawrence and Wightman figure is, as Mr Moore concedes, considerably out of line with other methods of determining relativity.
…
13. In the absence of satisfactory market evidence of extended lease sales and in view of our criticism of the approach of both valuers we have looked at public research collated by RICS in its Research Report of October 2009. We find that the graph produced by Lease is, in the absence of any better evidence, the most appropriate, and we adopt a relativity 89% as being appropriate for a lease with an unexpired term of approximately 62.25 years.”
19. In respect of an LVT case relating to 11 flats at Sadlers Court, Abingdon, Oxon, where Mr Michael Cannon FRICS, a partner in Lawrence & Wightman had acted for the lessees, it was recorded in the decision (CAM/38UE/OJR/2010/0024) at [7.5] that he said:
“Mr Cannon stated that due to absence of any market evidence as to long lease values, reliance must be placed on the use of graphs in order to ascertain the relativity between short lease and long lease values. Mr Cannon’s preference was to use the Lease graph as in his opinion it was the most commonly used graph and provides the best or independent evidence as to relativity….
7.6 Mr Cannon makes no further adjustment for the “no-Act world”. He suggests that there is an element in the Lease graph that takes account of the no-Act world and that a further deduction would amount to double counting.”
Mr Cannon had sought a relativity of 91.5% for an unexpired term of 66.75 years whereas the freeholder’s surveyor had sought 81.5%. Although there were complications relating to what precisely had been agreed in terms of the long lease value (relating to the value of improvements), the tribunal adopted Mr Cannon’s Lease-based percentage.
20. Mr Davis also gave a number of other examples of where regional LVTs have adopted the Lease graph, and concluded by saying that, for the reasons he had outlined in his evidence, it is the one that should be used in these cases. His valuations on this basis are set out at Appendices 1-5 attached to this decision.
21. In submissions, Mr Radevsky handed in the Beckett & Kay 2011: Second Revision presentation of RICS data (the “Graph of Graphs”) and referred to Dependable Homes Ltd v Mann [2009] UKUT 171 (LC). This was a case relating to a property in Goring by Sea, West Sussex, where evidence on relativities was considered, and where the appellant’s surveyor had relied, in part, on the “Graph of Graphs” – described by the LVT as “an average of averages based upon limited, undefined data from all areas outside central London”. The tribunal (Mr AJ Trott FRICS) said in its conclusions on relativity, at [40] (having said in [38] that he thought the evidence of the respondents’ surveyor (Mr Spratt) based on comparable transactions was incomplete and inadequate):
“I do not accept Mr Spratt’s assertion that relativity must reflect location; he produced no evidence to support it other than to say that the graph of graphs was based solely upon non-comparable central London transactions. In Arrowdell, a case concerning a property in Hove, the tribunal relied upon a graph showing relativities in the London suburbs. In the absence of more satisfactory evidence I therefore rely upon the graph of graphs. Mr Pridell’s [the applicant’s surveyor] own graph is said by him to have been based upon LVT decisions and settlements. As such, it is subject to the same criticisms of LVT decisions made in Arrowdell… The use of settlements was criticised in Arbib v Earl Cadogan [2005] 3 EGLR 139 and again in Nailrile.
I accept Mr Priddell’s view that the Graph of Graphs is used to determine a relativity that reflects the benefit of the Act and requires no further adjustment.”
22. It was pointed out that the appellants do not seek to rely upon graphs relating purely to PCL – as Mr Davis had explained, LVT decisions there tend to be calculated on a different basis, namely on a price per sq ft. Outside PCL, there is no evidence to suggest that relativity will differ among regions, and it is appropriate therefore to consider graphs of relativity that give the widest possible range of material. It is the Lease graph which provides the most reliable evidence, Mr Radevsky said, being totally independent and not reliant upon settlement evidence. Mr Davis had given examples of a number of decisions where Lease had been the preferred graph, including several Midlands cases, and as had been found in 31 Cadogan Square Freehold Ltd v Earl Cadogan [2010] UKUT 321 (LC) both LVT and Upper Tribunal (Lands Chamber) decisions are admissible and weight can be attached to them – not only on questions solely of law or procedure, but also in matters of fact or opinion.
23. It was also important to remember, Mr Radevsky submitted, that LVTs are bound to apply the statutory criteria, and so the relativity percentage determined by them should exclude Act rights.
Conclusions
24. Although there was some limited transaction evidence in one of the cases (the Bickton Close properties), it was deemed by the LVT to be insufficient, for the purposes of making its determination, and the only question for it (and now for me) to decide, was, therefore, which graph should be relied upon. Mr Radevsky made helpful submissions on the law and referred to recent and relevant tribunal decisions in this connection. The relevant passages in Arrowdell (including [39] and [57] set out above) have been rehearsed in numerous recent decisions of this tribunal as has the stance taken in Nailrile, and I set out some thoughts on the ongoing difficulties facing tribunals on the question of relativity and the use of graphs generally, at the end of this decision, after considering the evidence in the particular cases before me.
25. The LVT rejected the evidence that was based upon the Nesbitt graph which, it transpires, was based solely upon settlement evidence. It was, in my view, right to do so. However, I have to conclude on the evidence before me that the LVT was wrong to base its determination upon the Lawrence and Wightman Midlands graph (the Midlands graph), which was based upon a small sample extracted from the Lease graph. I accept Mr Davis’s evidence (which I found to be well researched, logical and convincing) that the Midlands graph was very much out of kilter with any of those reproduced in the RICS research report, and there was no evidence to support the argument that there were particular regional variations in relativity percentages (other than in PCL). I accept his arguments as to the suitability of the Lesae graph by comparison. It is a broad geographical analysis of a large number of LVT decisions.
26. Further, Mr Davis produced examples of a number of cases where partners in Lawrence & Wightman have adopted the Lease graph and their arguments have been accepted by the LVT. As the LVT said in the Whittington Close case ([18] above), “there is very little evidential value in the analysis of a small number of LVT decisions” and that “the Lawrence & Wightman figure is considerably out of line with other methods of determining relativity.” Mr Cannon of Lawrence & Wightman, in the Abingdon case, said that his preference was to use the Lease graph as “the most commonly used”, “the best independent evidence” and that he considered no further adjustment necessary for the no-Act world.
27. Therefore, in the instant cases, I find that I am persuaded by Mr Davis’s evidence and arguments, allow the appeal, and adopt the figures based upon the Lease graph as set out in the attached valuations. It is, of course, and with Arrowdell in mind, with some reluctance that I make a determination that clearly relies upon a graph that is based only upon past LVT decisions, but with the absence of any reliable transactional evidence, it is the only option open to me and the Lease graph is clearly, in my view, more representative of appropriate relativities than the Midlands graph. However, it needs to be stressed that this decision should not be seen as setting a precedent in other cases where evidence which is more reliable than the Lease graph is available.
28. Finally, in connection with graphs generally, it is a fact that the Research Paper produced by the RICS Leasehold Relativities Group in October 2009 contained details of a variety of graphs prepared by surveyors and firms that act for both landlords and tenants. As such, in total, they provide a graphical analysis based upon a large number of LVT decisions, settlements and valuation opinion. Collectively, therefore, they represent the broadest currently available study relevant to the issue of relativity. It may be that the production of a composite graph representing, by a single curve, the mid-point of what would be a very substantial body of evidence over a wide area might well be of assistance to valuers and tribunals in cases where reliance upon such information is the only available option.
Appeal allowed.
Appendix 1
84 Southcrest Road, Redditch, B98 7HZ
Term
Value as per LVT decision £220
Reversion
Extended leasehold value £95,000
Excluding tenants’ improvements
PV £1 in 49 years @ 5.75% 0.0646043
£6,137
£6,357
Marriage value
Extended leasehold value £95,000
Excluding tenants’ improvements
LESS
Present leasehold value (78.25%) £74,337
Freehold value £6,357
Marriage value £14,306
x 50% £7,153
PREMIUM £13,510
Appendix 2
38 Lyneham Gardens, Sutton Coldfield, B76 1XH
Term
Value as per LVT decision £895
Reversion
Extended leasehold value £117,778
Excluding tenants’ improvements
PV £1 in 63.67 years @ 5.75% 0.027973
£3,294
£4,189
Marriage value
Extended leasehold value
Excluding tenants’ improvements £117,778
LESS
Present leasehold value (90%) £106,000
Freehold value £4,189
Marriage value £7,589
x 50% £3,794
PREMIUM £7,983
Appendix 3
33E Leigh Court, Walsall WS4 2DQ
Term
Value as per LVT decision £450
Reversion
Extended leasehold value £133,179
Excluding tenants’ improvements
PV £1 in 59.26 years @ 6% 0.03164
£4,213
£4,663
Marriage value
Extended leasehold value
Excluding tenants’ improvements £133,179
LESS
Present leasehold value (86.5%) £115,200
Freehold value £4,663
Marriage value £13,316
x 50% £6,658
PREMIUM £11,321
Appendix 4
36 Blickton Close, Erdington, Birmingham, B24 OJA
Term
Value as per LVT decision £715
Reversion
Extended leasehold value £91,500
Less tenants’ improvements £1,500
£90,000
PV £1 in 58.48 yrs @ 5.75% 0.03804
£3,423
£4,138
Marriage value
Extended leasehold value
Excluding tenants’ improvements £90,000
LESS
Present leasehold value (85.75%) £77,175
Freehold value £4,138
Marriage value £8,687
x 50% £4,343
PREMIUM £8,481
Appendix 5
40 Bickton Close, Erdington, Birmingham B24 OJA
Term
Value as per LVT decision £ 716
Reversion
Extended leasehold value £90,500
Less tenants’ improvements £500
£90,000
PV £1 in 58.14 years @ 5.75% 0.03875
£3,487
£4.203
Marriage value
Extended leasehold value
Excluding tenants’ improvements £90,000
LESS
Present leasehold value (85.5%) £76,950
Freehold value £4,203
Marriage value £8,847
x 50% £4,423
PREMIUM £8,626
