Menu
The Valuation Tribunal for England has considered the assessments of three independent schools in north London and has concluded that they should be valued using the contractor’s test basis.
The assessments of the three independent schools: Gower House School, Annemount; and Goodwyn School, were set by the Valuation Officer based on a small number of rents for such schools. However the Valuation Tribunal issued an interim determination, finding that the rental evidence used for this was from only a very small number of properties some of which were geographically too remote to be considered reliable evidence. The Tribunal also found that the Valuation Officer’s approach to valuation of independent primary schools was inconsistent with the valuation of similar schools in the state sector, which were valued on a contractor’s test basis.
The Tribunal’s interim determination was that a contractor’s test basis of valuation should be applied and the parties were directed to seek to agree valuations on this basis. No agreement was reached and the Tribunal directed the parties to submit valuations to the Tribunal and to each other, on the contractor’s test basis. The appellants submitted valuations but the Valuation Officer did not do so. The Tribunal therefore accepted the appellants’ valuation and reduced the assessments of the three schools accordingly.
These cases are amongst a number recently where there is a significant disparity between valuations produced by reference to rents compared with those produced by a contractor’s test basis. This is particularly true of educational, healthcare and defence properties where the decapitalisation rate (the factor used to convert capital values to rental values) prescribed by statute is at a much lower level than for other classes of property.
It will be interesting to see if the Valuation Officer appeals against these decisions or, if he does not do so, how he will treat other independent schools which have been valued on a rental basis.
