Sinclair Gardens Investments (Kensington) Ltd, Re George Court [2017] UKUT 494 (LC)
Oliver Radley-Gardner appeared for the successful appellant landlord in Sinclair Gardens Investments (Kensington) Ltd, Re George Court [2017] UKUT 494 (LC) (judgment here: The appeal concerned the FTT’s approach to valuation of a lease extension The Upper Tribunal (P McCrae FRICS) agreed that the FTT had made a series of errors of principle in reaching its conclusion. The FTT had presumed (in the absence of supporting evidence) that a the purchaser under a comparable leasehold transaction was likely to have been an investor-purchaser, and further asserted that such a purchaser would attach no value to 1993 Act rights. Further, the FTT did not make time adjustments for that earlier transaction using a standard index. On the FTT’s approach to valuation (and the stripping out of 1993 Act rights), the Upper Tribunal found that
“[t]he FTT made some fundamental errors of principle. The first was that it made no allowance for the benefit of the 1993 Act, which is contrary to normal practice and to a series of decisions of this Tribunal. There was no evidence that the purchaser of the comparable property was an investor, and in any event no evidence that investor purchasers do not differentiate between long leasehold and freehold interests. Finally, its dismissal of the use of Land Registry indices is contrary to principle, and was inconsistent with the evidence. The FTT found that in the period between the sale of the main comparable and the valuation date “prices did not go up although they did not seem to fall to any appreciable extent”, but the Land Registry data available to the panel showed a steady increase in values for the months before and after the valuation date.”
The Upper Tribunal also held that the approach adopted by the FTT made inappropriate use of graphs of relativity, as opposed to market evidence. The decision once again confirms that reliance on graphs is inappropriate when determining relativity.
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