Empty homes are undesirable – but compulsory purchase can be costly

Amidst rampant demand for scarce housing, empty homes are frowned upon by local authorities – however, compulsory purchase of such properties in the public interest can be exceedingly expensive. In one such case, a council was ordered to pay more than £877,000 in compensation to the former owner of a listed townhouse.

The Georgian terraced property, which was situated in a sought-after conservation area, had been empty for years and had featured on English Heritage’s ‘at risk’ register. Planning permission to convert it into three flats had not been implemented and it had descended into a state of dereliction.

The council compulsorily acquired the property and sold it at auction for £580,000, subject to a requirement that its new owner carry out extensive works of repair and renovation. When the building’s former owner sought compensation, the council argued that, in the state that it was in on the date of acquisition, it was worth £590,000.

However, after considering expert valuation evidence, the Upper Tribunal found that the market value of the house with the benefit of planning consent was £800,000. Costs and losses incurred by the former owner as a result of the acquisition were also taken into account and the council was ordered to pay him a total of £877,190, before interest.