Flat A, 388 Baring Road, Grove Park, London SE12 0EF: LON/00AZ/OLR/2018/0900 LON/00AZ/OLR/2018/0900
[1]On 3rd April 2018 the Applicant commenced proceedings in the County Court at Bromley under claim number E00BR807 pursuant to section 50 of the Leasehold Reform, Housing and Urban Development Act 1993 (“the Act”) for a determination of the premium to be paid for the grant of a new lease of Flat A, 388 Baring Road, Grove Park London SE12 0EF (the “Property”).[2]By an Order dated 31st May 2018, (the Order) amongst other matters, the claim was transferred to this Tribunal for the purposes of determining the premium payable and to approve the form of the new lease. It is noted that the costs of the Applicant had been assessed at £3,020 including VAT and that sum was to be deducted from the amount we found to be payable for the premium[3]In support of the application we were provided with a copy of a report from Mr Mark Jones, a semi retired Chartered Surveyor with Sinclair Jones, chartered surveyors, dated 2nd August 2018. This report has been prepared for the purposes of an application under sections 50 and 51 of the Act and contains the usual expert’s declaration.[4]Mr Jones’s report speaks to a capitalisation rate of 6%, a deferment rate of 5.0%, a long lease value of £325,000 with a 1% uplift to the freehold value of £328,250. As to relativity Mr Jones has suggested a rate of 88.57% based on the average of three graphs set out in the 2009 RICS graphs for Greater London. The graphs were those produced by South East Leasehold, Nesbitt & Co and Andrew Pridell. This gave a short lease value of £290,731, although erroneously recorded under values and relativity at £290,371. The tribunal’s determination[5]We have reviewed the comparable evidence in Mr Jones’ report. He has, if we may say so, been very fair and true to his expert status in rejecting the purpose built comparisons and instead utilising the converted flats, in particular 363A Baring Road. This gave him the adjusted long lease value of £325,00 with an uncontentious uplift of 1% to reflect the freehold vacant possession value of £328,250. We are comfortable with those values.[6]The capitalisation rate at 7% fairly reflects the level of ground rent investment for this type of property in this location. The deferment rate of 5% follows the Upper Tribunal/Court of Appeal assessment in Sportelli. Both are acceptable to us.[7]On the question of relativity, in the absence of any market evidence the use of graphs is the norm. We have no concerns with the use of the three graphs chosen by Mr Jones to give the relativity of 88.57% on an unexpired term of 63.75 years in this case.[8]This relativity rate gives a short lease value of £290,731, correctly shown for marriage value purposes. Applying these various elements we conclude that the premium determined by Mr Jones of £24,806 is correct. The valuation of Mr Jones sets out how this sum was reached.[9]The terms of the extended lease, the draft of which was included in the bundle before us is approved and that the execution of same should be by a District Judge of the County Court as set out at paragraph 2 of the said Order. Name: Tribunal Judge Dutton Date: 21st August 2018