6 Springfield Road, Groombridge, East Sussex, TN3 9RE HAV/21UH/OAF/2025/0601-6-SPRINGFIELD-ROAD-GROOMBRIDGE-EAST-SUSSEX-TN3-9RE
DECISION
Decision of the Tribunal The Tribunal has determined for the reasons set out below that the price payable by the Applicants for the freehold interest in 6 Springfield Road, Groombridge, East Sussex, TN3 9RE (‘the property’) is £100 (One Hundred Pounds), to exclude any sum payable under section 27(5)(b) of the Leasehold Reform Act 1967 (as amended) (‘the 1967 Act’) and any costs. The Tribunal’s valuation is at Appendix 1. Background[1]By an order made by District Judge Chambers sitting at the County Court at Hastings, The Law Courts, Horntye Park, Bohemia Road, Hastings, East Sussex, TN34 1QX on 4 October 2024, the Court issued a Vesting Order under section 27 of the Leasehold Reform Act 1967 for the sale of the freehold of the property to the claimants (applicants) on such terms as may be determined by the First-tier Tribunal.[2]By the same Order the Court directed that the matter be transferred to the First-tier Tribunal to determine the price payable for a conveyance under the provisions of section 21 of the 1967 Act.[3]The Tribunal gave its Directions dated 31 January 2025. The applicants were required to give their submissions (bundle) by 28 February 2025.[4]At paragraph 3 of the Directions, it says ‘There is no suggestion that a further hearing is required and hence the Tribunal proposes to proceed by way of a paper determination.’’ The applicants have neither requested a hearing nor the Tribunal, having reviewed the papers, does it consider it necessary. Accordingly, the Tribunal gives this decision on the papers.[5]An inspection of the property has not been made by the Tribunal, having neither been requested by the applicants, nor considered necessary nor proportionate by the Tribunal. The Tribunal has viewed the property and its immediate environs on the internet.[6]In accordance with Tribunal’s Directions, the applicants provided a hearing bundle, which included an Expert Witness Report given by Mr Thomas Andrew Olden MSc MRICS dated 26 February 2025. The bundle extended to 95 electronic pages.[7]The applicants rely on the valuation report given by Mr Olden.[8]The Tribunal is grateful to the applicants, their Solicitor, Ms Harley Osborn, of Messrs Carter Lemon Camerons LLP and Mr Olden for the comprehensive, well-informed and structured bundle provided.[9]This decision covers in a reasoned form the issues the Tribunal has been directed to address by the County Court in its Vesting Order. The reasons do not recite each point referred to in submissions, but concentrate on those issues which, in the Tribunal’s view, are critical to this decision.[10]That said, as the lease at the valuation date is over 800 years unexpired and at a nominal ground rent, the enfranchisement price will be a relatively small sum. Accordingly, the Tribunal has adopted a proportionate approach in reaching its decision. The Lease[11]The property is identified on the HM Land Registry plan edged red under Title number ESX260272. The leasehold title was registered in the names of the applicants on 26 September 2019.[12]The price stated to have been paid for the leasehold interest in the property by the applicants on 20 September 2019 was £365,000.[13]The property is held by way of a lease dated 11 September 1865, between James Ramsbotham and George Davison and is for a term of 999 years from 24 June 1865, thereby to expire on 24 June 2864.[14]From the copy ‘ABSTRACT of the TITLE of MRS KATE MITCHELL’ in the bundle, the initial ground rent payable to 24 June 1866 was a peppercorn. Thereafter and for the remainder of the term, the ground rent is £6 per annum, payable by equal half-yearly sums. The Law[15]Section 27(5) of the 1967 Act provides: The appropriate sum which in accordance with subsection 27(3) of the Act to be paid into Court is the aggregate of:a. such amount as may be determined by (or on appeal from) an appropriate Tribunal to be the price payable in accordance with section 9 above; andb. the amount or estimated amount (as so determined) of any pecuniary rent payable for the house and premises up to the date of the conveyance which remains unpaid.[16]Section 9 of the 1967 Act sets out in detail the assumptions to be made and the procedure to be followed in carrying out the valuation. The effect of Section 27(1) is that the valuation date is the date on which the application was made to the Court, being the date on which the tenants (the applicants) gave notice of their desire to acquire the freehold interest in the property. The date the application was made to the Court was 4 October 2024. As of 4 October 2024 (the valuation date), the lease had 839.7 years unexpired.[17]The bases of valuation to calculate the purchase price and costs of enfranchisement are set out in section 9 of the 1967 Act. Mr Olden says at paragraph 6.5 of his expert report, ‘’I have therefore undertaken the valuation under Section 9 (1A), 9 (1C).’’ [sic] The Tribunal comments on this later. The Property[18]The property is in the village of Groombridge. Groombridge is on the Kent/East Sussex border, approximately five miles north of Tunbridge Wells.[19]In his expert report, Mr Olden describes the property as ‘‘a two-storey semi-detached house in good condition.’’ From the photographs provided and the date of the lease documentation, the property is early Victorian.[20]In outline, the accommodation comprises: ground floor – hall, sitting room, dining room, kitchen and conservatory at the rear; first floor – two bedrooms and one bathroom/WC. There are private gardens at the front and rear; and there is a Modular office in the rear garden. The Expert Report of Mr Olden and the Tribunal’s Valuation[21]As the Tribunal says in paragraph 8 above it is grateful for the bundle provided, which includes Mr Olden’s expert report. Following what the Tribunal says in paragraph 10 above, it has adopted a proportionate approach and addresses and comments on the salient valuation points in the order set out by Mr Olden in his expert report.[22]As outlined in paragraphs 11 to 14 inclusive, at the valuation date the lease is 839.7 years unexpired, at a fixed ground rent of £6 per annum.[23]The valuation date is 4 October 2024, as outlined at paragraph 16.[24]There are three bases of valuation to determine the enfranchisement price that have evolved under the 1967 Act, briefly as follows: section 9(1), section 9(1A) and section 9(1C), Leasehold enfranchisement explained, page 367.[25]Mr Olden says he has been ‘’…unable to ascertain if the property is eligible for valuation under Section 9 (1)…’ and goes on to say he has undertaken the valuation under Section 9 (1A), 9 (1C).’’ [sic]. At paragraph 6.6 of his report Mr Olden outlines the components that make up the enfranchisement price. The Tribunal notes the components are those relevant to the section 9(1C) basis of valuation. The Tribunal determines the section 9(1C) basis of valuation is to be adopted, as the applicants have neither demonstrated that section 9(1) nor section 9(1A) is to apply.[26]The enfranchisement price under section 9(1C) comprises the aggregate of:[1]the capitalised value of the existing lease ground rent;[2]the value of the freeholder’s reversion to vacant possession (the entirety value) deferred over the unexpired term of the lease; the freeholder’s share of marriage value; and compensation under section 9(A).[27]The ‘Loss of Ground Rent’ – to calculate the freeholder’s loss of ground rent over the term of the lease Mr Olden adopts a capitalisation rate of 6.5%, which when applied to the ground rent of £6 per annum for 839 years, equals £92. The Tribunal determines the adoption of 6.5% is reasonable.[28]The ‘Loss of Reversion’ – to calculate the freeholder’s loss of reversion to the house with vacant possession, Mr Olden values the property, freehold with vacant possession (the entirety value), for these purposes at £500,000. Having considered the comparable sales evidence in his report and the purchase price of the property of £365,000 in September 2019, the Tribunal determines to value the freehold with vacant possession, the entirety value, at £500,000 is reasonable.[29]Mr Olden has adopted the generic deferment rate in Sportelli for houses of 4.75%. There is no evidence before the Tribunal to depart from the generic rate in Sportelli. To apply a deferment rate of 4.75% over circa 840 years to a capital value of £500,000 is to provide a ‘de minimis number’, which Mr Olden rounds up to £10. The Tribunal adopts £1.[30]‘Marriage Value’ – marriage value is not applicable as at the valuation date the lease is over 80 years unexpired.[31]Development Hope Value and Appurtenant Land – Mr Olden has assessed each as ‘nil’. There is no evidence before the Tribunal in this case for a sum to be payable in the enfranchisement price under section 9(A) of the 1967 Act.[32]The aggregate of the constituent parts to Mr Olden’s calculation of the enfranchisement price is £102 (One Hundred and Two Pounds) (£92 plus £10 plus £0 plus £0 to equal £102).[33]The Tribunal’s valuation is at Appendix 1 and is to £100 (One Hundred Pounds), when rounded up. The Tribunal’s Valuation[34]The Tribunal, having considered the information provided in the bundle and in particular Mr Olden’s expert report confirms the price payable by the Applicants for the freehold interest in the property is £100 (One Hundred Pounds), to exclude any sum payable under section 27(5)(b) of the 1967 Act and any costs. The Tribunal’s valuation is at Appendix 1. RIGHTS OF APPEAL[1]A person wishing to appeal this decision to the Upper Tribunal (Lands Chamber) must seek permission to do so by making written application by email to rpsouthern@justice.gov.uk to the First-tier Tribunal at the Regional office which has been dealing with the case.[2]The application must arrive at the Tribunal within 28 days after the Tribunal sends to the person making the application written reasons for the decision.[3]If the person wishing to appeal does not comply with the 28 days’ time limit, the person shall include with the application for permission to appeal a request for an extension of time and the reason for not complying with the 28 days’ time limit; the Tribunal will then decide whether to extend time or not to allow the application for permission to appeal to proceed.[4]The application for permission to appeal must identify the decision of the Tribunal to which it relates, state the grounds of appeal, and state the result the party making the application is seeking.