First-tier Tribunal Sets Freehold Purchase Premium

OUTCOME: Allowed

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FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference : LON/00AF/OCE/2025/0016 Property : 17 [ADDRESS] [POSTCODE]

Applicant : [redacted] : Mr [COUNSEL], MRICS Respondent : [redacted] : N/A Type of [NAME] : Section 24(1) of the Leasehold Reform, Housing and Urban development Act 1993 Tribunal members : Judge Tagliavini Mrs S Phillips, MRICS Venue : 10 [ADDRESS] [POSTCODE] Date of hearing Date of decision Corrected : 1 September 2025 9 October 2025 22 October 2025

DECISION Corrected pursuant to r.50 of the Tribunal Procedure (First-tier Tribunal) (Propery Chamber) Rules 2013

2 Decisions of the tribunal (1.) The tribunal determines that the premium payable as per the valuation

of Mr [NAME] is as follows:

Specified premises - £31,141

Appurtenant land - £100

Non-demised parking space - £500 _____________________________________________________ The [NAME] 1. This is an [NAME] made pursuant to section 24(1) of the Leasehold

Reform, Housing and Urban Development Act 1993 (‘the Act’),

exercising their rights to purchase the Respondent’s freehold interest. The background 2. A Claim Notice dated 8th May 2024 was served on behalf of the lessees

of Flats 1, 3, 5 4 & 6, in accordance with Section 13 of the Leasehold

Reform, Housing and Urban Development Act 1993 (“the Act”),

exercising their rights to purchase the Respondent’s freehold interest. As

well as the Specified Premises, this Notice included the additional

freeholds of all the common parts of the Specified Premises and the

whole of the gardens and amenity land including any access, car parking

areas, refuse store, bicycle storage and gateways. The notice proposes

the sum of £30,000 for the Specified Premises and £100 for the

additional freeholds. 3. A Counter-Notice dated 19 July 2024 was subsequently served accepting

the lessees’ right to purchase their freehold interest but denying the

applicants’ right to acquire the whole of the gardens and requiring a

premium of £50,000 on the assumption that the rear garden land is not

included in the transfer with a right to access the retained part of the rear

garden. 4. The [NAME] has since withdrawn from the [NAME]. The property 5. The subject property comprises a substantial, detached three-storey

building of traditional brick construction beneath a pitched tiled roof

with dormer additions. The property appears to date from the late

Victorian/early Edwardian period and has been converted to provide six

self-contained flats. Some of the flats have a demised parking space in

the front garden area but there is one space that is not demised. The

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subject property was described in being in poor condition and in need of

substantial roof works in an approximate sum of £50,000. The issues 6. There was no valuation report from the respondent and therefore no

Agreed Statement of Issues. Therefore, the tribunal was required to

consider all matters relevant to the determination of the premium. The hearing 7. At the video hearing of this [NAME], the applicants were represented

by Mr [NAME], MRICS who spoke to his report dated 18 August

2025 which was included in a digital bundle of 132 pages. The

respondent was not represented and provided no valuation report to the

tribunal. The applicant’s solicitors confirmed to the tribunal they were

no longer seeking to acquire the part of the rear garden retained by the

[NAME]. 8. In his report, Mr [NAME] stated:

In order to calculate the value of the freehold interest in

accordance with Schedule 6 of the Leasehold Reform,

Housing & Urban Development Act, 1993, there are six

variables which need to be considered;

The date to assess all valuation assumptions

The capitalisation rate to assess the value the term

The market value of each [NAME] on a share of freehold basis

The appropriate discount rate for the [NAME]’s

reversion

Any hope value payable in respect of [NAME] 3

The value of the non-demised parking space

The value of any appurtenant land 9. Mr [NAME] told the tribunal that:

(i) The valuation date is 8 May 2024

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(ii) The appropriate capitalisation rate is 7% as the ground rent for

the flats represent a generally unattractive form of income.

(iii) Market value of flats on a freehold basis:

[NAME] 1 - £270,000

[NAME] 2 - £280,000

[NAME] 3 - £290,000

[NAME] 4 - £290,000

[NAME] 5 - £270,000

[NAME] 6 - £320,000

(iv) 5% discount rate to be applied for the freehold reversion.

(v) No hope value in respect of [NAME] 3.

(vi) A nominal value of £100 for the demised appurtenant land.

(vi) £500 for the non-demised parking space.

(vii) The premium payable is:

Specified premises - £31,141

Appurtenant land - £100

Non-demised parking space - £500

The tribunal’s decision

10. In the absence of any challenge to the applicants’ evidence and the

tribunal’s scrutiny of Mr [NAME] valuation, the tribunal determines the

premium payable is as follows:

Specified premises - £31,141

Appurtenant land - £100

Non-demised parking space - £500 The tribunal’s reasons 11. The tribunal accepted Mr [NAME] approach was reasonable and took

appropriate account of a number of comparable sales within 250 metres

of the subject property, as there were no relevant sales in the property

itself and made adjustments for time; size and condition where

appropriate and a ‘stand back approach based on his experience and

expertise to reach freehold values of the six subject flats’.

5 12. The tribunal considered Mr [NAME] adoption of capitalisation and

relativity rates to be in line with the current approach. The tribunal also

accepted Mr [NAME] evidence that there was no ‘hope value’ to be

realised from [NAME] 3 particularly in light of the likely legislative changes

to enfranchisement claims. 13. The tribunal accepts Mr [NAME] approach to the value of the

appurtenant land and the non-demised parking space which would have

little value. 14. In conclusion, the tribunal accepts Mr [NAME] valuation and the

premium said to be payable.

Name: Judge Tagliavini Date: 9 October 2025 & 22 October 2025

Rights of appeal

By rule 36(2) of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013, the Tribunal is required to notify the parties about any right of appeal they may have. If a party wishes to appeal this decision to the Upper Tribunal (Lands Chamber), then a written [NAME] for permission must be made to the First- tier Tribunal at the [NAME] which has been dealing with the case. The [NAME] should be made on Form RP PTA available at https://www.gov.uk/government/publications/form-rp-pta-[NAME]-for- permission-to-appeal-a-decision-to-the-upper-tribunal-lands-chamber The [NAME] for permission to appeal must arrive at the [NAME] within 28 days after the Tribunal sends written reasons for the decision to the [NAME]. If the [NAME] is not made within the 28-day time limit, such [NAME] must include a request for an extension of time and the reason for not complying with the 28-day time limit; the Tribunal will then look at such reason(s) and decide whether to allow the [NAME] for permission to appeal to proceed, despite not being within the time limit. The [NAME] for permission to appeal must identify the decision of the Tribunal to which it relates (i.e. give the date, the property and the case number), state the grounds of appeal and state the result the party [NAME] the [NAME] is seeking.

6 If the Tribunal refuses to grant permission to appeal, a further [NAME] for permission may be made to the Upper Tribunal (Lands Chamber).