FTT, ref CH1/00HN/OCE/2013/0048
This was a collective claim of a large high value modern block on the sea front where the issues were the deferment rate and capitalisation rate. The tenant’s valuer argued for a deferment rate of 5.75% on the ground that there was a risk of lower growth and greater obsolescence than in PCL. The Tribunal rejected these contentions, adopting the standard rate of 5%. Unusually the capitalisation rate was also in issue, because there was a substantial aggregate ground rent rising from £25,500 to £178,500 in 2122. The Tribunal relied on market evidence, and made a discount for the effect of the Act to arrive at a rate of 6.75%. The premium was determined at £782,500.
The decision is available at http://www.lease-advice.org/decisions/93pdf/2001-3000/2856.pdf
Thomas acted for the landlord.