Freehold Purchase Price Set at £70,600 by First-tier Tribunal

OUTCOME: Allowed

© CROWN COPYRIGHT

FIRST-TIER TRIBUNAL PROPERTY CHAMBER (RESIDENTIAL PROPERTY) Case reference :

LON/00BK/OCE/2025/0030

Property : 17 [ADDRESS], [POSTCODE] Applicants : [redacted] (2) [NAME] [NAME] (3) [NAME] [COUNSEL] (4) [NAME] [COUNSEL] : [COUNSEL] [COUNSEL] LLP Respondents : [redacted] : Not applicable – missing landlord Type of [NAME] : [NAME] under sections 50 and 51 of the Leasehold Reform Housing & Urban Development Act 1993 Tribunal members :

[NAME] Valuer

Venue : Remote Date of paper determination : 14 January 2026

DECISION

Decisions of the Tribunal (1) The Tribunal determines the price to be paid by the applicants for the purchase of the freehold interest is £70,600. (2) The terms of the draft transfer are provided for in paragraph 12 below.

2 The background 1. This is an [NAME] pursuant to a vesting order made by District Judge Griffiths at the County Court Willesden on 16 May 2025 under section 26 of the Leasehold Reform Housing and Urban Development Act 1993 (“the 1993 Act”).

2. Section 26(1) of the 1993 Act concerns claims for collective enfranchisement where the relevant landlord cannot be found or fails to engage with the enfranchisement process. It enables the court to make a vesting order in respect of any interests of the landlord which are liable to acquisition.

3. Under section 27 of the 1993 Act, the role of the Tribunal is to determine the appropriate sum to be paid into court in respect of the landlord’s interests.

4. The applicants in this matter are the qualifying tenants of the lower ground, second and third floor flats, namely [NAME] [NAME], [NAME] [NAME] and joint tenants [NAME] [NAME] and [NAME] [NAME]. The three flats together with the two none participating flats and appurtenant land constitute 17 [ADDRESS], [POSTCODE] (“the Property”).

5. On 24 June 2024, the applicants issued a Part 8 Claim in the County Court at Willesden for an order pursuant to section 26(1) of the 1993 Act vesting the freehold interest in the Property in the applicants. The applicants have been unable to ascertain the whereabouts of the respondent freeholders and were, therefore, unable to serve a notice on them pursuant to Section 13 of the 1993 Act.

6. The applicant has provided the tribunal with two valuation reports prepared by [NAME] [NAME] [NAME] Valuer, dated 13 November 2023 and 4 December 2025. [NAME] [NAME] [NAME] was of the view the total premium payable for the freehold in his initial opinion was £56,600 and this was subsequently reduced to £50,900 in his report dated 4 December 2025.

7. The submitted valuation report provides an explanation and justification for his opinion of the different premium sums payable for the enfranchisement. It includes comparable sales' transaction evidence and an Expert opinion to justify the capitalisation and deferment rates adopted. The Expert references several First tier Tribunal decisions and applies the statutory approach to the valuation.

8. The tribunal has relied upon their knowledge and experience of the property market in the locality in [NAME] this determination. They have also had regard for recent and relevant Upper Tribunal decisions. The tribunal has adopted the report dated 4 December 2025 as the relevant valuation document. The determination 9. The tribunal accepts the opinions expressed by [NAME] [NAME] [NAME] in his valuation report dated 4 December 2025, save that:

3 (i) the Expert made an error in the calculation of the current value of the freeholder’s interest. The sum of £120 pa was used as ground rent for reversionary period 3 instead of the correct ground rent sum of £1200 pa. The tribunal valuation has applied the correct value in their calculation. (ii) The tribunal do not agree with the reasoning offered to justify the capitalisation and deferment rate of 8% adopted by the Expert. The ground rent is not onerous by current market standards with an annual ground rent charge that falls significantly below the 0.1% of capital value. Mortgage lenders or purchasers would not deem this level of ground rent of concern. It is for this reason the tribunal adopt the capitalisation rate of 6.5% . (iii) The tribunal are of the opinion the sum of £100 offered as the market value for the appurtenant property taken by the applicants on enfranchisement is too low. There is a value in this interest to the freeholder which includes pathways and other common areas. The tribunal, in accordance with the 1993 Act provisions applies a value of £1,000 to the compensation payable for enfranchisement to be equally divided between the five properties. This is an increase of £900 to the sum proposed by the Expert. The assessed value is based upon the previous experience and knowledge of similar appurtenant land transactions at enfranchisement.

10. The collective enfranchisement valuation calculation prepared by the tribunal is at Appendix A. A summary of the valuation outcomes is in table 1 below.

11.

Accordingly, the tribunal determines that the premium to be paid in respect of the acquisition of the freehold of the property on statutory terms is £70,600 less any summarily agreed costs. The matter of Costs should be addressed to the court.

12. In accordance with the directions given in the order the tribunal has reviewed the draft TR1 transfer included in the bundle at pages 55-59. It approves the draft TR1 transfer subject to the inclusion at section 8 the sum £70,600 less summarily agreed costs as the sum payable for the freehold.

4

13. This matter should now be returned to the County Court sitting at [ADDRESS] under claim number LO1WI608 for the final procedures to take place.

Valuer Chairman: [NAME]: 15 January 2026

RIGHTS OF APPEAL 1. 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 Regional Office which has been dealing with the case.

2. The [NAME] for permission to appeal must arrive at the Regional Office within 28-days after the Tribunal sends written reasons for the Decision to the [NAME].

3. 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.

4. 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.

5

6

7

8

9