3rd July 2018
I wrote last year about the dark arts of Leasehold extension pricing for flats and said at the time little had changed in the field since the landmark case of Sportelli a decade or so ago, when the Land Tribunal told we valuers what we should and shouldn’t do.
This year however the entire sector has been blown wide open by the Court of Appeal who upheld the decision in Mundy v The Sloane Stanley Estate and basically said the rules we valuers have been following for the last 10 years were all wrong and we need to start afresh. The burning issue in this re-think is relativity and since you are all busy people I will not bore you with the mechanics, suffice to say that we valuers must now use market evidence to calculate relativities rather than use the relativity tables, as we had all done in the past. So, what does this mean? Well valuers fees are likely to increase because calculating and then arguing the case with one’s opposite number means more time spent and in some instances I would say lease extension prices are being pushed up by these changes. Certainly freeholders and their valuers are becoming more bullish in their asking figures.
It just goes to underline the importance of getting good professional advice from an experienced valuer in the field, but then that’s always been so!