The value of ‘Act’ Rights: Daejan Investments Ltd v Collins [2024] UKUT 26 (LC)

Nicola Muir and Mark Loveday appeared for the Appellant and Respondent respectively in the Upper Tribunal (Lands Chamber) leasehold enfranchisement decision of Daejan Investments Ltd v Collins [2024] UKUT 26 (LC) handed down on 9 February 2024 (Judge Elizabeth Cooke).

The claim, a rare rehearing of a lease extension claim, raised various valuation issues, including the treatment of leasehold relativity in the immediate aftermath of the pandemic. The Tribunal adopted the primary approach to leasehold relativity in the guideline case Trustees of the Sloane Stanley Estate v Mundy [2016] UKUT 223 (LC). In particular, it rejected the use of Savills tables for the value of ‘Act’ rights under the Mundy approach. Instead, it provided an updated table for the value of Act rights which it commended for future use in valuations at [68] – [69]:

Unexpired term	Adjustment for “Act rights”	Decision	Reference
41.32	10.00%	Mundy	[2016] UKUT 223 (LC)
45	7.50%	Nailrile	[2009] RVR 95
52.6	6.00%	Zucconi	[2019] UKUT 242 (LC)
53.96	5.85%	Collins	[2024] UKUT 26 (LC)
57.68	5.50%	Orchidbase	[2016] UKUT 468 (LC)
66.8	3.50%	Sinclair	[2017] UKUT 494 (LC)
67.49	3.50%	Contactreal	[2017] UKUT 178 (LC)
68.62/68.67	3.50%	Elmbirch	[2017] UKUT 314 (LC)
69.3/71.9	3.50%	Roberts	[2018] UKUT 64 (LC)
75.2	2.50%	Reiss	[2018] UKUT 0311 (LC)
77.7	2.50%	Sarum Props	[2009] UKUT 188 (LC)

 

Mark Loveday, who appeared for the Respondents said: “Leasehold relativity is a contentious area of element of enfranchisement premium calculations. The Upper Tribunal is taking a firm and consistent line on relativity valuation, and the updated table of ‘Act rights’ is useful guidance for the approach to be adopted by valuers”.