This is a reference to determine the compensation payable in terms of the Land Compensation (Scotland) Act 1963 to Mr James Young in respect of land which is being compulsorily acquired for the purposes of the City of Edinburgh (Guided Busways) Order Confirmation Act 1998.
The City of Edinburgh Council (“the Council”) has sought to promote the City of Edinburgh Rapid Transit (CERT) scheme which involves the construction of a rapid transit passenger system from Edinburgh Airport and West Edinburgh to the city centre. The Council served a Notice to Treat upon Mr Young on 29 January 1999 in respect of 7.572 hectares (18.71 acres) of his land at Meadowfield Farm, Edinburgh. The ground in question lies to the north of, but not adjacent to the A8, at the Gogar roundabout.
Mr M G Thomson, QC, appeared for the claimant and led as witnesses Mr R F Durman, FRICS, a former partner and now a consultant with Montagu Evans, who gave planning evidence; Mr K W Martin, BEng, CEng, MICE, a director of Oscar Faber, who gave evidence on transport issues relevant to the development proposal; and Mr I M Darling, FRICS, a director of Chestertons, who gave valuation evidence.
Mr C S Haddow, QC, appeared for the acquiring authority and led as witnesses Mr S Harrison, BA, MRTPI, ARICS of Bruce and Partners, who gave planning and valuation evidence and Mr D Timperley, MSc, CEng, MICE Development Control Manager in the Transport Planning Department of the acquiring authority.
The Tribunal made an unaccompanied inspection of the subjects and the surrounding area on 16 January 2001.
In the course of the hearing the Tribunal drew the attention of parties to press coverage of a recent transaction in land to the west of the Royal Highland Showground. Parties agreed that we should be free to consider this transaction and after investigation some further evidence was led. Parties then indicated an intention to deal with this matter more fully by way of a Joint Statement. We delayed completion of this decision pending receipt of such a statement. However, neither party had indicated a desire to found in any way on the transaction in question and, as we had come to the view that, on the basis of what we did know of it, it would not assist our assessment of the open market value of the subjects, we decided to proceed without further reference to it. In the event, a Joint Statement was received as preparation of this opinion was nearing completion. It confirmed our view that it was unnecessary to give further consideration to this particular transaction
Meadowfield Farm extends in total to 94.652 hectares (233.89 acres). Most of the farmland lies to the north of the main Edinburgh–Fife railway line but the 7.572 hectares being compulsorily acquired is part of the 17.345 hectares (42.86 acres) which lies to the south and south-west of that railway line and north of the Gogar Roundabout and the A8. A relatively short length of the north boundary of the subject land is adjacent to the railway but most of the north boundary of the land being acquired adjoins land in the ownership of the British Airport Authority, used as the secondary runway of Edinburgh Airport.
The proposed route of the CERT line passes through the four fields which make up the 17.345 hectares referred to above. The fields with Ordnance Survey numbers 4675 (which is contiguous with the railway to the east) and 2066 lie immediately to the north and north-west respectively of the Gogar Roundabout and they are both accessed by way of an existing agricultural track, not in Mr Young’s ownership, leading northwards from the roundabout. These two fields are separated from the third field, OS number 9264 to the west, by a drive leading to Castle Gogar. That drive is not in Mr Young’s ownership. Part of the drive is to be acquired by the Council in connection with the CERT line. Field OS number 7764 is adjacent to, and west of, field number 9264. These fields have an access by a farm track from the A8. On the west boundary of field 7764 is the Gogar Burn which runs from south to north, between the A8 and the Airport.
Gogar roundabout to the south lies partly on land compulsorily acquired from Mr Young in 1992. When that land was acquired, it was assumed that an overpass was to be constructed. In fact an underpass was made instead. This entailed the excavation of a considerable volume of material which has been placed on a wedge of land lying between the A8 and the roundabout and fields numbers 2066 and 4675. This land although compulsorily acquired was not needed for road construction because of the change in design of the roundabout. The pointed end of the wedge commences at the entrance to the private road to Gogar Castle from the A8 and it widens as it extends eastwards from there past the roundabout. Fields 2066 and 4675 are therefore up to about 90 metres distant from the A8 slip road and the roundabout. These fields are also concealed from view from the A8 and the roundabout because of the height of the mounds.
The land now to be acquired is a strip of land varying in width typically from about 50 to 100 metres, running along the northern boundary of all four fields for about 900 metres. For the most part the strip is bounded on the north by the Airport. At one point it touches the southern boundary of field 2066. The line of the rapid transit route passes from there, across the Gogar roundabout, southeast to the Gyle. This will leave Mr Young with substantial areas of fields 7764, 9264 and 2066 between the land acquired and the A8. But part of field 2066, extending to 0.121 hectares (0.3 acres), will be completely cut off and the part remaining of field 4675 (to the east) will be of an awkward angular shape and relatively small in size for agricultural purposes.
The subjects are located at one end of the “A8 Corridor” – discussed further below in the context of the planning material. This is a rectangular shaped corridor with the A8 as its spine running from the Gogar roundabout in the east, to the A8 interchange with the M9 at the Newbridge roundabout, in the west and Newbridge industrial estate beyond. It extends northwards along the length of this stretch of A8 to include the Royal Highland Showground owned by the Royal Highland Agricultural Society of Scotland (“RHASS”), which is accessed directly from the A8 by Hallyards Road; Edinburgh Airport which is accessed via Eastfield Road and the site of Turnhouse Airport; and southwards to include various existing developments along the A8. These include Gogar Park, which is a house in substantial grounds used for offices; Gogar Curling Rink, a private club; and Gogarburn Hospital, which is disused and has been sold for use as a University Campus and Science Park. The A8 Corridor is 4 miles long and extends on each side of the A8 for about a mile. It is therefore about 8 square miles in extent or more than 2,000 hectares (or 5,000 acres).
The A8 is the former trunk road from Edinburgh to Glasgow. Traffic between these cities is now carried on the M8 on a parallel route to the south. Although traffic volumes have decreased on the A8 as a consequence, it is still a principal distributor serving locations to the west of Edinburgh including the Airport. The Gogar roundabout is west, and on the edge, of the built-up area of Edinburgh. The City of Edinburgh By-pass (the A720) starts on the south side of the roundabout. The South Gyle Broadway runs southeast from the roundabout and leads to the Gyle Shopping Centre and the office development at Edinburgh Park, all served by extensive areas of carparking and lying on the east side of the Edinburgh By-pass. Approximately one and a half miles west of the Gogar roundabout on the A8 is an interchange which takes traffic from both directions to Edinburgh Airport. That main access road from the A8 to the Airport is known as Eastfield Road.
The claim for compensation made by the claimant is:
|10.2 acres (East of Castle Gogar Drive) @ £100,000||=||£1,020,000|
|8.51 acres (West of Castle Gogar Drive) @ £66,000||=||£561,660|
|Severance and injurious affection (diminution in value of retained land) – area severed 0.3 acre @ £100,000||=||£30,000
The amount of compensation proposed by the Council is:
|18.71 acres @ £1500||=||£28,065|
|Allowance for severance of 0.3 acre||=||£150|
|Accommodation Works (new field boundaries)||=||£2,000|
In the alternative, should the Tribunal accept that there is development potential in the land and that there should be some allowance for hope value, the amount of compensation proposed by the Council is:
|18.71 acres @ £5000||=||£93,550|
|Plus allowances as above||=||£2,150|
The parties are agreed that the valuation date for the claim is the date of the Tribunal’s award.
There was no real dispute over issues of primary fact and no dispute as to credibility of witnesses. It is unnecessary to set out the detailed evidence and submissions thereon but it is helpful to have in mind from the outset the main submissions in relation to the proper approach to valuation in this case.
The task of the Tribunal is to determine the value of the subjects in accordance with the provisions of the Land Compensation (Scotland) Act 1963. Section 12(2) states the definition of value as follows: “The value of land shall, subject as hereinafter provided, be taken to be the amount which the land if sold in the open market by a willing seller might be expected to realise.” The fundamental issue was whether there could be any hope value where the established planning policies were clearly and firmly against any relevant development. If there was an element of hope value, there was a dispute as to whether it could be of significant value in the absence of any identifiable proposal for use.
Shortly put, Mr Darling for the claimant, placed weight on his own experience and expertise in relation to development at the west side of Edinburgh. He acknowledged the fact that current planning policy would prevent any significant development but pointed to the weight of pressure for development. He had no doubt that in the open market potential purchasers existed who would recognise a hope value without being overconcerned to identify a specific use or other development detail. There was, admittedly, no probable end use in planning terms but there was a market for land in the area by speculators who anticipated change in policy at some future date. Their transactions in the market place locally were the best evidence of hope value in this locality.
He defined hope value as one, “…reflecting the speculator’s assessment of the worth of a future change of use…”, and added that it rose or fell in response to market pressure. In looking at his comparisons he identified hope value as that amount within the actual transaction price (or open market value) which exceeded market value for agricultural use. It was based on long term expectation. In his opinion there was no need to identify a specific development use, it was possible to have regard only to the nature of investor demand for land in the area. He did not accept that it was necessary to have an end use and a fixed time scale. He pointed out that a return on capital at a rate of 7.5% per annum after 15 years was an acceptable rate of risk for an investor, which we observe means that the capital value only had to grow by a factor of almost 3. Although he agreed that an investor might make an assumption as to the future development value of land, he did not consider that to be a necessary part of the process. The investment value of the land could be found by proper analysis of comparable sales of land demonstrating values in excess of agricultural or other green belt uses. The claim figure of £100,000 per acre was based on his understanding of what the market would be likely to offer for the subjects.
For the acquiring authority, Mr Harrison gave evidence to the effect that there was now no reasonable prospect of any planning permission for development of the subjects as they were within a protected green belt. Mr Harrison’s definition of “development value” was, “Value accrued for a particular development with planning permission”. Development value as so understood is not realised until planning permission is actually granted. His definition of “hope value” was, “Anticipation of development value at some future time based upon a realistic planning assessment of achieving planning permission on an allocation through the Local Plan or on Appeal.”
He considered that prior to the Planning and Compensation Act 1991 it was possible to have hope value regardless of the content of the development plan, but since then there was in place a “plan led system” whereby planning decisions must be made in accordance with the provisions of the structure and local plans unless material considerations justified departure from those plans. This meant that there had to be a realistic planning case to support any increase in land value above existing use value. Because there was no concrete proposal for any specific land use at any foreseeable date, and because the only land use proposed locally was for playing fields, he said there was simply no basis for valuation on anything other than an existing use basis.
He stressed that the earlier transactions had taken place at a time when the planning policy was less certain. Having regard to the clear planning position at present, there was no rational basis for payment of hope value. In his opinion it was not appropriate for the Tribunal in a case of assessment of compensation for compulsory purchase, to take a speculative approach. The award should be based on the planning evidence. If there was any hope value it would be modest in amount. By analysis of subjects in Lothian where there was an identifiable hope value he considered that the figure of £5,000 per acre would be a generous figure if, contrary to his main submission, an element of hope value did exist.
In his submissions, Mr Thomson supported the approach taken by Mr Darling and dealt in some detail with the competing views of Mr Harrison. Mr Thomson stressed that it did not matter whether the views of Mr Harrison and Mr Timperley or those of Mr Durman and Mr Martin were ultimately proved to be correct with regard to planning prospects for the subject lands. What mattered was the market’s current perception. He recognised that the statutory provisions to allow a claimant to obtain a Certificate of Appropriate Alternative Development had an important part to play in the scheme of assessment of compensation but submitted that the existence of these provisions did not exclude a broader approach. He stressed the importance of recognition that hope value was not an artificial concept. Unlike the notional calculation based on residual valuation, hope value was the price which the subject land would realise if it was put on the market by a willing seller. The existence of this element of value had been recognised for many years: Glass v Inland Revenue Commissioners 1915 SC 449. It did not depend on current planning policies; it could not be calculated accurately; its assessment was normally a matter of professional judgement and experience. He contended that Mr Darling’s assessment was soundly based and was the result of application of professional judgement and experience to the various comparables set out in the claimant’s productions.
Mr Thomson recognised the need to discount the value of land to the west of Castle Gogar Drive to take account of the difficulty over access. Mr Darling had allowed a discount of one-third based on the widely used practice following the decision in Stokes v Cambridge 1961 13 P & CR 77. He submitted that this was a reasonable approach. He accepted that in a recent decision in the petition of Elmford Limited (OH, unreported 12 September 2000), Lord Clarke had held that a prior owner of land taken for road building purposes had no necessary right of access over that land to the road from his retained subjects. Mr Thomson stressed that this case was subject to appeal and turned on its own facts. If the Tribunal concluded that the ratio of the case governed the present circumstances he accepted that it might be necessary to make a similar one-third reduction when assessing the hope value of the land to the east of Castle Gogar Drive as well as in respect of the land to the west. The effect of such decision would be to value all the subject land at £66,000 per acre.
Mr Haddow referred to the provisions of section 12 of the Act. He stressed the importance of ignoring completely any element in value attributable to the scheme. In this case the relevant scheme was the development of the CERT system. The very existence of this scheme raised questions as to whether the values founded on in proximity to the proposed line were relevant. It was clear from Pointe Gourde Quarrying and Transport Company Limited v Sub-Intendent of Crown Lands 1947 AC 565 that there had to be excluded from consideration any factors affecting value which were attributable in any way to the scheme which was the basis of the compulsory purchase.
Mr Haddow emphasised the importance of ss 25 to 30 of the 1963 Act which allowed assessment of compensation to have proper regard to the planning position. The intention was to provide a method of assessment of compensation which considered existing use, use under a development plan and notional use as determined by these provisions of the Act. Where there had been no attempt to obtain a Certificate of Appropriate Alternative Development he doubted whether any element of hope value could be justified. He did not go so far as to contend that failure to use the statutory provisions precluded assessment of possible planning consent but submitted that where advantage had not been taken of these provisions it was all the more important to be satisfied that any assessment of hope value was soundly based on evidence. He referred to Northern Metco Estates Ltd v Perth and Kinross District Council 1993 SLT (Lands Tr) 28.
It was significant in the present case that the claimant made no attempt to identify any development which might possibly justify breach of the Green Belt. It was not disputed that there was no potential for housing. It was now agreed that there was no potential for a park and ride facility. There was some evidence about development as a hotel but this gave rise to traffic problems.
Mr Haddow referred to Williamson’s Executors v Cambridgeshire County Council  1 EGLR 165; Grampian Regional Council v Secretary of State for Scotland 1984 SC 1; and, Young v Lothian Regional Council 1992 SLT (Lands Tr.) 18. He also referred to the decision in Elmford Ltd. This he said, was not a major part of his submission, his main contention was that there was no proper evidence of hope value. The only evidence of this in relation to the subjects was of historical hope. That was attributable to planning uncertainty. This had been removed. However, if the Tribunal did feel able to attempt assessment of a hope value regard should be had to the potential difficulties of the site. Quite apart from planning permission, any developer would have to give serious consideration to difficulties such as access, the existence of a pipeline and the location of the subjects.
Mr Haddow submitted that in weighing the evidence of Mr Durman and Mr Darling it was important to have a clear view of what they were saying. They did not give evidence as to what they themselves would recommend as a reasonable element of hope value. They contented themselves with evidence of what they thought a developer might pay. This was not expert evidence but evidence of their own assumptions.
Mr Darling told us that he had advised the claimant (and his late father) on development issues at Meadowfield and at the adjacent Redheughs and Hermiston Farms since 1974. He was involved when Redheughs Farm was sold in 1989. That land is now part of the site of The Gyle Shopping Centre and the office development at Edinburgh Park.
Mr Darling suggested that the agricultural value of the land being acquired was about £2,500 per acre. He also expressed the view, which was not challenged, that housing land in the most favoured areas of Edinburgh can readily command values in the range of £1 million – £2 million per acre. Land for offices in the best areas lies in the same value range while land for retail development purposes is arguably higher.
In support of his valuation Mr Darling provided a schedule containing information about 11 land transactions which had taken place in the locality in the period from 1985 until October 2000. These comparables show land prices varying from £5,500 per acre to £603,000 per acre as follows:
|Ref. No.||Site/Location||Date||Vendor||Purchaser||Price £||Area Acres||Rate £/acre|
|1||Land at Ratho Station||Sep-85||RHASS||MIM Properties Limited||517,000||25.85||20,000|
|2||Eastfield Road(W)/A8 Jnctn||1988||Mr & Mrs J Gibson||John G McGregor||380,000||18.10||20,944|
|3||Eastfield Road(E)||1989||Miss Grahams||John G McGregor||342,000||10.36||33,012|
|4||Gogar roundabout||May-92||James Young||Lothian Regional Council||307,080||7.677||40,000|
|5||A8(N)||May-95||James Prentice & Others||New Ingliston Limited||1,000,000||183.00||5,464|
|6||Eastfield Road(E)/A8 Jnctn||Nov-95||MIM Properties Limited||PPG Leisure Limited||320,246||34.09||9,394|
|7||Eastfield Road(W)||Apr-96||Mr & Mrs J Gibson||New Ingliston Limited||630,000||32.99||19,097|
|8||Eastfield Road(W)||Dec-98||New Ingliston Limited||Norwich Life Pensions Ltd||2,000,000||5.93||337,268|
|9||Hallyards Road (to RHASS)||Nov-99||New Ingliston Limited||George Watt Limited||400,000||0.63||603,318|
|10||Eastfield Road(E)/A8 Jnctn||Mar-99||Peter & Margaret Harkins||PPG Lothian Limited||400,000||1.16||344,828|
|11||Eastfield Road(E)||Oct-00||New Ingliston Limited||IBIS (598) Limited||3,000,000||10.00||300,000|
The comparisons, except number 1, relate to land sales on the north side of the A8 in an area bounded on the east by the subjects, on the west by the Royal Highland Showground and, principally, by Edinburgh Airport to the north. Most of the comparisons in Mr Darling’s schedule have frontages to Eastfield Road, the main access road from the A8 to the Airport.
In support of his proposed levels of compensation Mr Harrison produced the following schedule of comparable evidence.
|Ref. No.||Site/Location||Date||Vendor||Purchaser||Price £||Area Acres||Rate £/acre|
|Lothianburn – Damhead||Nov-98||Hartfield Homes Limited||C Newbould||35,000||17.00||2,059|
|Kirknewton – Newhouse Farm||Oct-98||Harry C Lawrie||James Lawrie||57,000||33.60||1,696|
|Gorebridge – Stobbs Farm||Jun-98||John Moffat||Morrison Homes Limited||25,000||20.00||1,250|
|Longniddry – Coates Farm||Nov-98||Wm Chalmers & Sons||J J Peace & Sons||177,000||68.62||2,579|
|Gullane – Muirfield Farm||Jun-99||Muirfield Farms Limited||Lothian Fifty Limited||107,000||97.90||1,093|
|Blackburn – Blackburn Hall||Apr-99||Rennie & Margaret Douglas||James Fegan||31,000||16.34||1,897|
|Bathgate – Woodbank Farm||Feb-99||Alan & Audrey Brown||Chris & Susan Nixon||5,000||4.76||1,050|
|Blackburn – Blackburn Hall||May-99||James Fegan||William & Irene Wait||16,500||8.00||2,062|
|Kirknewton – Ormiston||Feb-00||Scotpigs Limited||Brian Simmers||40,000||31.00||1,290|
|Gorebridge – Stobs Farm||Feb-00||John Moffat’s Executors||William Osborne||180,000||103.00||1,747|
|Hope Value Transactions|
|9||Edinburgh – Shawfair Farm||1995||British Coal||Lothian Regional Council||1,300,000||528.00||2,462|
|10||Wallyford||Jan-98||Strawson Holdings Ltd.||Dunalastair Estates||620,000||108.00||5,740|
|11||Livingston – Gavieside Farm||Nov-98||Graham Andrew’s Execs.||Scottish Enterprise||20,000||3.88||5,155|
|12||Tranent – Adniston Farm||Aug-00||Lothian & Borders Co-op.||(Missive to be concluded)||2,600,000||808.00||3,218|
In the first section above are listed ten transactions in agricultural land which took place between June 1998 and February 2000 and involved areas varying in size from about 5 acres to about 100 acres. Mr Harrison obtained the information from a search of records of land transactions held at Paisley University. The sales illustrated a range of values from approximately £1,000 per acre for poorer quality agricultural land to £2,500 per acre for good quality arable land.
In the second section of his comparables he gave details of four hope value transactions, which took place between 1995 and August 2000, in areas covered by the development plans at similar stages of preparation and renewal as those pertaining to the subject site at Gogar. All were on the edge of built-up areas and some within Edinburgh’s Green Belt.
Mr Darling’s evidence was that the agricultural value of land was currently in the range of £2000 to £3000 per acre. He had discussed the value of the land at the subjects with a land agent colleague, and having regard to the quality of the soil, at Grade 2, he proposed a figure of £2,500 per acre.
Mr Harrison’s comparable evidence was taken from a range of locations in order to demonstrate the state of the market. The comparables at the lower end of value were of poorer agricultural quality. The upper end reflected good quality arable land capable of supporting good crop growth. He had selected £1,500 per acre, the weighted average of his samples, because of the proximity of the subject land to the urban area with potential problems of vandalism, the relatively small scale and the separation from the rest of Meadowfield Farm by the Edinburgh–Fife railway line.
In considering the question of the existing use value of the land as agricultural we note that it is shown as Class 2, and therefore as suitable for a wide range of crops, in the agricultural classification map in the Report of Survey of the Lothian Structure Plan (see below). Land of this quality we consider would command the best price in the market as demonstrated in the comparables. Although it is near the urban fringe it is protected by the A8 with its heavy volumes of traffic and the Edinburgh to Fife railway line which both present physical barriers to unauthorised intrusion. The land is farmed as part of a substantial holding and is connected to the rest of the farm by an internal farm road and a bridge over the railway. We do not consider that a need for downward adjustment has been established.
We therefore find that the value of the subjects in their existing agricultural use is £2,500 per acre.
The statutory development plans affecting the subjects are The Lothian Structure Plan 1994, The Ratho, Newbridge and Kirkliston Local Plan 1985 and The North West Edinburgh Local Plan 1992. There are also a number of relevant non-statutory plans including, The Green Belt Review of Boundaries 1988, The Strategic Plan for A8 Corridor 1998 and The Edinburgh Green Belt Boundary Study 1999.
The Lothian Structure Plan was modified and approved by the Secretary of State in 1997. Its Key Diagram illustrates the Edinburgh Green Belt but it does not seek to identify boundaries. Symbols indicate two new railway stations to be safeguarded on the Edinburgh–Fife railway line, one near to the subject land at Gogar, and the other near Edinburgh the Airport. The light rapid transit line between the City centre and the Airport is safeguarded together with an associated park and ride site at Ingliston in the vicinity of the Airport. Its Written Statement outlines strategic policies including the following:-
“A continuous Green Belt shall be maintained around Edinburgh for all the following purposes:
A. Maintaining the identity of the city and neighbouring towns by clearly establishing their physical boundaries and preventing coalescence;
B. Providing countryside for recreation and institutional purposes of various kinds;
C. Maintaining the landscape setting of the city and neighbouring towns.”
At paragraph 3.17 it stated, “The stability and endurance of Green Belt policies can only be achieved where a balance between the containment and growth of urban development can be sustained on a long-term basis. In preparing the development strategy, the Council has concluded that, in order to meet strategic development requirements, some currently designated Green Belt land should be released.” These releases included principally the “South-East Wedge” being a substantial area of undeveloped land within the line of the City By-pass, designated to accommodate up to 5,000 houses, schools, and commercial and industrial development. (See: Policy ENV9). This area was favoured over areas to the west of Edinburgh on transportation and social grounds.
No land was proposed to be released from the Green Belt in the vicinity of the subjects. Instead, at paragraph 3.19 it is stated, “Development will be restrained to the west and south of the City, where the City has developed in most areas up to the City Bypass. This is a strong defensible boundary which clearly defines the edge of the built-up area. Development beyond the bypass would be highly visible from transport corridors. It would affect high quality landscapes, essential to the landscape setting of the City, and lead to urban sprawl due to a lack of defensible boundaries. Traffic growth in the west of the City has also placed pressure on transport links. Improvements to transport infrastructure in the western corridor are intended to relieve environmental degradation and further development would impede this objective. Therefore the long-term strategy will be to strictly maintain the Green Belt to the west and south of the City”
Policy ENV12 strictly limits uses within the Green Belt. It is expressed as follows:
“There is a presumption against development or changes of use in the Green Belt unless necessary for the purposes of agriculture, horticulture, forestry, countryside recreation, or other uses appropriate to the rural character of the area.”
In the Lothian Structure Plan Report of Survey the west side of Edinburgh is shown, in Figure 3.1, as an “area of restraint”, and at paragraph 3.14, the area of Green Belt to the west of the City is identified as an area contributing most to Green Belt functions. Paragraph 3.15 specifies areas that contribute most to Green Belt functions. These include West Edinburgh.
Government advice relating to Green Belts is set out in a SDD Circular 24/1985 entitled, Development within the Countryside and Green Belts. The Circular states that structure plans should describe the strategic context and general location for Green Belts and the development control policies that apply to them. It emphasises the need for green belts on the edge of urban areas where strong development demands require a robust form of protection. Precise green belt boundaries should be defined in local plans once the strategic context has been provided by the Structure Plan.
The Ratho, Newbridge and Kirkliston Local Plan was the subject of a public local inquiry in October 1984. It was finally adopted in 1985. The Proposals Map shows the subject land within the ‘Countryside Policy Area’ and within the Edinburgh Green Belt, (as is the Airport and the Showground). It shows the Edinburgh City Bypass continuing north after 1990 from the Gogar interchange to Maybury Road. The land to the south of the A8, including Gogar Park and Gogarburn Hospital but excluding the field nearest the Gogar roundabout, is shown as being an Area of Great Landscape Value.
The Written Statement indicates very restrictive rural uses a within the Countryside Policy Area as well as the restrictions which apply within the extended Green Belt. In terms of Policy 2.8 permission will not normally be given for new development or redevelopment for purposes other than agriculture, outdoor recreation or other uses appropriate only to rural areas. Any planning consent will contain provisions for the safeguarding of amenity and the improvement of the landscape.
A small part of the eastern end of the subjects and land to the east thereof is in the contiguous Local Plan to the east viz. The North West Edinburgh Local Plan.
Preparation of the North West Edinburgh Local Plan commenced in 1982 and the plan was adopted 10 years later in January 1992. The line of the safeguarded City By-pass forms the boundary between the two Local Plan areas. The eastern extremities of the subject land are within this Plan. The part of the site included within the North West Local Plan is allocated Green Belt, and the same restrictive policies apply as in the neighbouring local plan.
The Ratho, Newbridge and Kirkliston Local Plan, the North West Edinburgh Local Plan and one other local plan, are intended to be superseded by the Rural West Edinburgh Local Plan. The Rural West Edinburgh Local Plan commenced preparation in the early 1990s and was first produced in a consultative draft form in December 1993.
The subject land is allocated as Green Belt within the consultative draft plan. The draft plan proposed the continuation of the established Green Belt policies, together with the outward extension of the Green Belt in conformity with recommendations made in the 1988 Green Belt Review. Rural West Edinburgh is highlighted in strategic terms as an area where no major land allocations should be made due to severe infrastructure constraints. It also includes a proposal, subject to detailed development briefs, to delete Edinburgh Airport (378 hectares), the Royal Highland Showground (166 hectares) and Heriot–Watt University’s Riccarton Campus (to the south of the M8) (156 hectares) from the Green Belt. These are shown as special Business/Commercial Areas, where controlled development and improvement is to be encouraged. The finalised Local Plan was produced in April 1999. It contained the usual restrictive Green Belt policies. A Public Local Inquiry was programmed to commence in 2000 but has not started because of procedural and legal complications. We heard evidence that the plan was in abeyance and might now be abandoned.
In the Proposals Map the Gogar Burn, at the western end of the subjects, and a strip of land running along side it is shown as a Site of Interest for Nature Conservation. Policy E18 declares that the Council will seek to protect identified sites of local nature conservation and that development within or affecting such sites will not be permitted unless it can be demonstrated that appropriate mitigation measures can be incorporated into the development to enhance or safeguard the nature conservation interest of the site. The Report of Survey shows that to the west of the Gogar Burn there is a designated Area of Archaeological Significance. To the east of the Gogar Burn, in field 7764, there is another designated Area of Archaeological Significance. In field 9264 there is the site of a Scheduled Ancient Monument (a Fort). However, in the Proposals Map only the Ancient Monument is designated, and that to the west of Gogar Burn.
These designations mean that additional protectionist policies apply. Under these policies the Council will use appropriate planning controls to preserve Ancient Monuments and Areas of Archaeological Interest, including their settings, from any development which could detract from their value in historic, archaeological or educational terms. Impact statements will require to accompany any planning proposal. The site of the Ancient Monument is also protected by the Ancient Monument and Archaeological Areas Act 1979.
The Proposals Map also shows that the east end of the subjects fall within a Hazard Consultation Zone. The reason for the Hazard Zone in this case is apparently because a gas pipeline traverses the site. Proposals for development within the Zone will be subject to consultation with the Health and Safety Executive. Should development involve significant numbers of people then regard will be had to acceptable evacuation procedures before planning consent will be granted.
The land to the south of the subjects, on the south side of and along the A8 and designated as an Area of Great Landscape Value, is modified and excludes Gogarburn Hospital where a Planning Brief has been prepared to protect a listed building and mature woodlands subject to Tree Preservation Orders. The brief allows for the replacement of demolished buildings with new development provided there is no increase in the total building footprint, and provided also that it will not affect the environmental quality of the site.
On the Proposals Map the route of the proposed CERT link is shown running through the subject site to Eastfield Road and to a planned Park and Ride facility there. That has been developed with consequences that will be discussed later. Only one railway station site, to the east of the Airport on the Edinburgh–Fife railway line, is safeguarded.
Although this local plan is not one of the approved development plans affecting the subjects, and the extant development plans remain the primary reference for planning proposals, the proposed changes from the approved local plan may carry significance as material considerations.
There are also non-statutory plans which are relevant to the planning background to this dispute, including the following:-
The Green Belt Review of Boundaries was a requirement of the Lothian Structure Plan 1985. It recommended a number of additions to and deletions from the existing Green Belt. The deletions, of about 115 hectares, were mainly to the south and east of the City. They also included the deletion from the Green Belt of the Gyle up to the line of the Edinburgh Bypass to the west of the City. 2,000 hectares were recommended to be added to the outer western edge of the Green Belt in the Ratho/Kirkliston area.
At paragraph 4.8 the Review recommends that the inner boundary of the Green Belt should be formed by the Edinburgh By-pass which it believes would form a long-term defensible boundary.
The Strategic Plan for the A8 Corridor has been prepared by consultants with the intention of providing a sustainable development strategy to inform the Rural West Edinburgh Local Plan. The Plan promotes a landscaped corridor, as already described, with the A8 as its spine running from the Gogar roundabout in the east to the A8 interchange with the M9 at the Newbridge roundabout in the west and Newbridge industrial estate beyond.
In its introduction the study notes that:-
“Consultation with senior officials and the Scottish Office indicate that the area should remain as greenbelt for the foreseeable future, without very strong justification for deletion. Depending upon development proposals and pressure for development largely emanating from the Airport and Showground, then at some future time the Secretary of State would have to take a view as to these uses’ continued planning status.
The wording of the structure and local plans indicates that a definition of airport related use would greatly assist decision making when judging proposals made for the study area.
The definition of such uses should be ‘tight not tenuous’, and relates primarily to uses directly associated with Airport operation rather than benefiting solely from promotional benefits of proximity to the Airport”.
Inter alia, the study recommends the promotion of the Corridor as a new gateway zone; high quality landscape renewal; consolidation and development of the Airport–Showground core; an environmental upgrade of “gateway approach” to the Airport and Showground by creating a new type of landscape renewal in the vicinity of the Airport and its approaches. It recommends landscape improvement at the Green Belt boundaries at Gogar roundabout at its eastern edge and at Newbridge at its western edge. It concludes that CERT represents the preferred public transport solution along the corridor.
Also in preparation is the Master Plan for Edinburgh Airport and The Royal Highland Show ground at Ingliston. That Plan is believed by witnesses to recognise that some extension of the area of land presently occupied by these landowners will be needed to cater for their anticipated growth. This could mean an extension of their boundaries with a concomitant reduction in the surrounding Green Belt.
The final non-statutory document, which is relevant to this précis of the planning position affecting the subjects, is The Green Belt Boundary Study. This Study was prepared in accordance with the Secretary of State’s modification to the Lothian Structure Plan as expressed in proposal ENV8A. It was required to be carried out within twelve months of the approval of the Lothian Structure Plan. The purpose of the Study was to identify where long-term Green Belt boundaries remained to be established and in so doing to provide guidance to Local Plans. It did not identify land that should be taken out of the Green Belt for development recognising that the allocation of such sites was a matter to be determined by Local Plans. The areas recommended for modifications are mainly in the South-East Wedge, the west sector of East Lothian and the north Midlothian towns. The Study was issued as a draft for consultation in August 1998 and was then produced in final form in April 1999.
This Study makes no recommendations for changes to the Green Belt boundary in the vicinity of the subjects. However, it recommended the deletion of land near Ratho Station, part of the claimant’s first comparable.
Included in the Study is a “Landscape Character Zone” assessment: The zone north of the A8 (Turnhouse) is designated Grade 5 – the lowest grade. The land in this zone is described as follows:-
“The zone comprises a predominantly flat landscape which is dominated by Edinburgh and Turnhouse airports and the Ingliston Showground complex. The area is simple, discordant, open and rather bland in character.
Key Elements: Flat – Open – Non conforming uses.”
Work has commenced on the Edinburgh and Lothian Structure Plan which will replace the Lothian Structure Plan. A Structure Plan Issues Report was published in August 2000. It is intended that the Plan will be submitted to Scottish Ministers by year-end 2001. It identifies the major changes in circumstances requiring rapid review of the existing structure plan as the boom in the Lothian economy. That document examines issues such as the consequential pressure for growth and the conflict with other environmental objectives. It seeks reaction from interested parties to five alternative scenarios for the future development of the Lothians. One of these would allow for some expansion of the City into the Green Belt.
While that concludes our summary of the development plans and other material affecting the subjects there are further planning and development matters which are also relevant to the issues which the Tribunal has been asked to address.
Within the neighbourhood of the subjects, being West Edinburgh, there have been significant developments. The Gyle Shopping Centre and Edinburgh Park, both on the east side of the Edinburgh Bypass, and extending to 115 hectares (284 acres), together with 18 hectares (44 acres) of housing have been released from the Green Belt and developed. The construction of the M8 extension between Newbridge and the Bypass has resulted in the de-trunking of the A8 and an increase in its capacity. The grade separation of the Gogar Roundabout has also increased the road capacity of the A8.
Edinburgh Airport has experienced a doubling of passenger numbers over the last six years and this has resulted in increased demand for airport parking and other airport related services. The closure of Gogarburn Hospital on the south side of the A8 has made available an opportunity for development. An airport park and ride facility has been developed on the east side of Eastfield Road.
Part of Mr Young’s land, to the north-east to the Edinburgh–Fife railway line has been granted planning permission for playing fields. This use is one compatible with the land’s allocation within the Green Belt. Mr Darling confirmed that this was the best foreseeable use for that land.
There is a difference between the parties as to the effect of the present planning position.
Mr Durman interpreted the evolution of development plans, which he illustrated, and other planning initiatives in the area as indicating a trend towards the inevitable development of the subjects. In his opinion Edinburgh as an economically buoyant City required land for modernisation and expansion. In the recent past land for these purposes had been progressively released from the Green Belt to accommodate such demand. At the same time the Green Belt had been expanded outwards and enlarged.
He referred to the succession of development plans prior to the current statutory development plan which had permitted a series of releases of Green Belt land. He noted that the Report of Survey of the Lothian Structure Plan indicated that the subjects and the surrounding area to the west, north of the A8, were considered to be of the lowest intrinsic landscape quality relative to other parts of the Green Belt. He also pointed to recognition in the statutory development plans that non-conforming users dominated this part of the Green Belt.
Edinburgh Airport had expanded dramatically in passenger numbers requiring an increase in parking together with the need to improve access to both the Airport and the Royal Highland Showground. In this connection he thought it significant that the Secretary of State modified the Structure Plan in 1997 to permit the release of land from the Green Belt to accommodate further growth and ancillary developments at the Airport and the Royal Highland Show ground. Given the weight of current pressure for development, and in the light of the historical changes which had occurred to the Green Belt to accommodate development, he was of the opinion that designation of the Green Belt in the current development plan was not as permanent as it might appear. The Secretary of State had previously intervened to permit releases from the Green Belt and Lothian Regional Council had indicated approval for a football stadium in the Showground area.
Mr Durman was concerned that reviews of the Structure and Local Plans for the area were out of step but, in his opinion, whatever form these development plans finally took, they would have to address the need for more development land to meet the needs of a City expanding in population, employment and household numbers. The Structure Plan Issues Report, by suggesting expansion into the Green Belt as a possible future strategy, recognised these needs. In addition to these general factors Mr Durman pointed to a number of specific factors which encouraged a belief that Green Belt land north of the A8, between Gogar and Newbridge, would eventually be released for development. He believed that the existence of a transportation corridor along the A8; the location near to the Central Scotland motorways system and the Fife railway line; the presence of the airport and the prospect of a rapid transit system linking it with the centre of the City were all elements supporting the case for development in this locality because it would accord with Central Government policy, as contained in NPPG17 (SDD Transport and Planning April 1999) which was to concentrate development around public transport nodes and along public transport corridors. For all these reasons he concluded that the open market for land in the locality of the subjects was one where purchasers took a view that the planning position might ultimately change in favour of development of land presently defined as Green Belt. He said he had personal knowledge that major development companies were keenly interested in pursuing land acquisition in this locality.
Mr Harrison drew different conclusions from his analysis of the planning evidence. He considered it extremely unlikely that a case could be made to justify planning permission for a commercial and non-conforming use on the subjects. He pointed to the significance of the emphasis placed upon the protection of the Green Belt in the Lothian Structure Plan, within which the release of the South-East Wedge was anticipated to be the last major extraction of land from the Green Belt. In neither the Green Belt Review of Boundaries Study nor the Edinburgh Green Belt Study wais the subject site considered suitable for release from the Green Belt. The Green Belt Review, which had been a requirement of the 1985 Lothian Structure Plan, promoted changes to Green Belt boundaries, but they were almost all to the south and east of the City. An exception to that had been the release of the land at the Gyle to the west of the City but that alteration was made to recognise the line of the Edinburgh By-pass as the long-term defensible boundary. The Edinburgh Green Belt Study, prepared as a requirement of the present Lothian Structure Plan, and issued as a draft in 1998, identified areas of boundary modification. These were in the South East Wedge, the west sector of East Lothian and the north Midlothian towns. The approved Study published in April 1999, now with the Scottish Ministers, made no recommendation for alterations to the Green Belt in the vicinity of the subjects. Rather the defensibility analysis contained within the Study confirmed the protection given to the Green Belt by the by-pass to the west of the City.
He drew attention to the Report of the Director of City Development to the Lothian Structure Plan Joint Liaison Committee, in April 1999, which confirmed that the Rural West Edinburgh Local Plan would be required to take account of the Green Belt boundary as presented in the 1999 Study. He also observed that The Strategic Plan for the A8 Corridor proposed a landscaped corridor along the A8, including the subjects. It did not indicate development at the Gogar roundabout.
As a result of his analysis of these material planning considerations Mr Harrison concluded that the prospect of planning permission for commercial use of the subjects was extremely remote to the extent that he would attribute neither any development value nor any hope value to the subjects.
The factual situation, as agreed, is that the existing use of the land is agricultural. No permission for any development exists. The subjects lie in the Green Belt within which the only permitted development would be that compatible with Green Belt policy.
A Certificate of Appropriate Alternative Development had not been applied for. As Mr Darling recognised, no development use, other than the acquiring authority’s purpose under the scheme, would have been included in any certificate. That was so even although the statutory provisions allowed such a certificate to look forward. Mr Darling made no attempt to hide the fact that he would have expected a “nil” certificate. The extensive planning evidence was offered by the claimant as the background to a decision to purchase land which a speculator would have in view when contemplating investment. The market was speculative but the claimant’s position was that there was sufficient evidence to allow the Tribunal to accept the existence of a relevant market and to assess the level of value. In support of that assertion he pointed to the recent history of the site and the potential it would have in the eyes of a speculator.
In the Edinburgh Western Corridor Busway: Final Report 1992 the claimant’s land north-west of the Gogar roundabout had been identified as one of five possible park and ride sites but was not selected. In the recent past there had been an expression of interest by the Council in this area as a park and ride car park, but that interest had been withdrawn.
Mr Martin’s evidence was that the subjects had locational advantages in transportation terms in that they were adjacent to major land use traffic generators and attractions such as the Airport, Gyle Shopping Centre and Edinburgh Park. They were linked to the primary road network and positioned at a key interchange. There were therefore high volumes of passing traffic and thus an acknowledged source of potential business for commercial developments dependent upon attracting car-borne custom. There was also the opportunity for multi-purpose trips in the area.
He proposed a hotel/restaurant development as a possible use at a transportation interchange. An advantage of such a use was that the predicted traffic generated by its presence would be within 5% of the existing two–way traffic flow of the adjoining A8. That meant that the flow generated by the development would not be a material consideration such that a traffic impact analysis, in accordance with government guidelines, would need to be carried out as part of a planning application.
He identified two possible accesses to the subjects from the A8. Both would require passage across the land in the ownership of the Council being land formerly acquired from Mr Young for the construction of the Gogar roundabout. That is the wedge shaped piece of land, previously described. One such access was “in-only” from the north side of the Gogar roundabout and one was a “left-in/left-out” access at the point where the sliproad to the roundabout drew away from the north carriageway of the A8. He considered these would be acceptable in traffic engineering terms for the volume of vehicle movements expected to be generated by the illustrative development proposed. It would not be necessary, for example, to alter the existing traffic light arrangements at Gogar roundabout.
Mr Timperley on the other hand considered that the “left-in/left-out” access at the A8 sliproad junction would introduce unacceptable safety hazards and that the “in-only” access at the roundabout would introduce a significant change in the present traffic behaviour on the roundabout. Special measures such as lane marking would be required which were not justified by the volume of traffic generated at the subjects.
Mr Darling took from Mr Martin’s evidence that there was a practical possibility that access solutions could be realised which would enable development to take place in the “no-scheme” world on the fields to the north of Gogar roundabout. He did not consider it necessary to identify particular access solutions for specific uses. It was sufficient that it could be demonstrated that transportation solutions were possible and to reassure a speculator that the fields were not land-locked. Neither Mr Martin nor Mr Darling dealt expressly with the fact that the claimant did not control the land adjoining the roundabout over which access would be required.
For the claimant it was accepted that the field to the west of the road to Castle Gogar was land locked even although it had a frontage to the A8 and an existing access for agricultural purposes. Mr Darling accepted that an access for commercial use would not be acceptable in traffic and planning terms along that stretch of frontage to the A8.
No attempt was made to lead positive evidence that the claimant had any right to access over the land acquired from him in 1992. It appeared to be implicit in Mr Thomson’s challenge to the weight to be given to the decision in Elmford Ltd, supra, that if that decision was wrong, it would follow that the Tribunal could accept that the claimant would have a right to take access over any suitable part of that land. We are not persuaded that this is sound.
Elmford Ltd was a case where land had been acquired for road building purposes. It appeared that more had been taken than was needed and that a strip of the acquired land ran between what was clearly “road” and the petitioners’ remaining land – on which development was proposed. It was agreed that there was a right at common law for an immediately adjacent proprietor to take access to a public road provided access was taken in a way least disadvantageous to other members of the public: Moncrieffe v Lord Provost of Perth and Others (1842) 5D 298. The substantive dispute was whether the strip over which access was required was properly to be treated as part of the “road”. Put in what may be over-simplistic terms, part of the argument was that as the land had been taken for road building purposes it fell to be treated as road. Other argument turned on the detail of the character of the strip and whether it was properly to be viewed as part of the road.
There was no attempt to argue on the facts of the present case that the wedge of land should be treated as road. On the main issue, therefore, the decision does not cast light on the present case. There was, however, a subsidiary argument which Lord Clarke described as being “of a somewhat makeweight nature”. It was, he said, described as “one of equity”. The contention was that as the strip of land in question had been acquired by a public authority in the public interest, namely for the construction of a road to which the public would have access, the respondents as a public authority should not be entitled to deny access over that land to the petitioners who were members of the public. In any event, if access was to be denied it was for the respondents to establish a clear case for doing so.
The Court dealt shortly with the subsidiary argument. The issue was one of legal right and could not be disposed of by reference to equitable considerations. The respondents had title to the land and the petitioners had received full value for the land when it was acquired. The respondents as owners were entitled to seek a return in consideration of granting rights over it.
As we have said there was no positive attempt in the present case to establish that the claimant had any right to access. We accordingly consider it appropriate to treat the site as landlocked.
As we have indicated earlier, the fundamental area of disagreement between the parties was whether there could be hope value in the subjects, and the means by which any such hope value could be assessed.
We accept Mr Haddow’s submission that assertions of the existence of hope value in respect of development contrary to clear planning policy require very careful scrutiny. We address the question by considering, firstly, whether conditions at the subjects and within the A8 Corridor make it reasonable for us to accept the existence of a speculative market in land, and whether there is evidence that it does exist. The question of whether there is any evidence on which to base actual hope value at the subjects, and the effect of the scheme, we leave to later in the Opinion.
The evidence demonstrated that the A8 Corridor is subject to distinct pressures for development. There is outward pressure for westward growth of the City and gravitational economic forces related to the dynamic growth of the Airport. The demand for commercial uses within the Corridor is compounded by the accessibility offered by the regional road network and its strategic interchanges. The evidence also is that the development value of land for almost any use from residential through business to retail is very high relative to agricultural or green belt uses.
For the claimant it is said that it will come to be realised by the local planning authority that to frustrate the growth of the airport and its related services, at its fixed location, would be to inhibit the economic advancement of the fastest growing city in Scotland; that the location of the Royal Highland Showground is also fixed and activity there is also expanding in a way that is economically beneficial to the region and should be accommodated and not frustrated; that improved public transport links and the regional road network make this area uniquely accessible in a way that makes sustainable development possible while relieving pressure elsewhere in the City. On the other hand the landscape, or other supposed assets, protected by the Green Belt are not of a sufficiently high quality to outweigh a decision to permit development in the area.
Mr Harrison claimed that all the transactional evidence of hope value in the A8 Corridor could be rationalised on the anticipation of development value for a probable use in the planning circumstances obtaining when the purchases were made. Because the Lothian Structure Plan was submitted to the Secretary of State in 1994, but not approved until July 1997 and only published in December 1997, there was until then continuing uncertainty regarding the Green Belt and consequently there was a policy vacuum. This allowed speculation in key locations such as West Edinburgh where Green Belt boundaries were being contested. The Green Belt Review of Boundaries merely fuelled this speculation. The CERT proposal, in 1991, together with proposals for the expansion of Edinburgh Airport created speculator interest round the airport.
When considering the question of whether or not the planning position in the A8 Corridor makes it possible for a speculative market to exist, we accept Mr Harrison’s general proposition that planning intentions have become firmer in respect of protection of the Green Belt as a whole and that these intentions have been supported by the plan-led system. The plan-led system now derives from s. 25 of the Town and Country Planning (Scotland) Act 1997 which directs a planning authority to determine a planning application in accordance with the provisions of the development plan unless material considerations indicate otherwise. S.37(2) directs the authority, when determining a planning application, to have regard to the development plan so far as material to the application, and to any other material considerations. However, since the advent of the plan-led system in 1991 there has been a market expressing hope value in land in the A8 Corridor.
We do not accept that there has been any abrupt change from planning uncertainty to planning certainty. Departures from any green belt and its accompanying policies have never been easy and would always depend on any proposal being sufficiently meritorious for a departure to be allowed. While it is generally true that the plan led system dampens speculation, this will be less true where there are “material considerations” which could permit the release of green belt land for development. The presence and growth of the Airport, together with the Royal Highland Showground give reason for believing that Green Belt immediately adjacent to the airport may be released for associated development necessary to facilitate the continuing expansion of these facilities. The Lothian Structure Plan and the North West Edinburgh Local Plan anticipate growth. The A8 Corridor Study anticipates such growth and expansion. The Master Plan in preparation for the airport will, at a minimum, fuel speculation that the Airport may have to expand beyond its present boundaries to accommodate operational needs and like activities which require to be near it. The uncertainty produced regarding the present determinative development plan position is sufficient for potential investors in land to consider entering the market where opportunities arise.
Looking at the evidence it appears to us that the speculation in the locality of the Airport, and at Eastfield Road in particular, is based not so much on what can be forced from the planning authority by general pressure for development but on recognisable grounds for belief that the planning authority itself will recognise that certain types of development are necessary to support vital and non-substitutable land uses in that area.
We also accept the evidence that in the general locality there has been widespread and active trading in land within the Green Belt . None of these transactions has been made by farmer to farmer. Indeed to talk of agriculture as the existing use is to describe a use for which there is now no open market. All of the recorded transactions produced as comparables, and covering a substantial and largely contiguous area, were made by investor purchasers at prices in excess of agricultural values. In the plan-led world within which the purchases over the last decade were made there would be no more justification for making specific planning assumptions as to probable use than there would have been at the subjects. The purchases were made at different dates, between associated and unassociated persons or firms, each at a unique location and each with differing physical attributes.
Accessible land on the edge of the airport might have advantages over landlocked or less favourable sites. But, in the wider area, even where sales have not occurred there have been clear signs of investor interest. Mr Robert Allison owns a field of, very approximately, 15 acres across the A8 from the subjects and in the southwest quadrant of the Gogar roundabout. It is in agricultural use. He was been approached to sell this land but refused to do so. To the south of this land and running alongside the by-pass is a large tract of land owned by Premier Property Group. The subjects were offered for by that company in 1990.
There is further evidence of the underlying expectation of future development. The sale of the subjects to the claimant was itself conditional on a claw back clause in the conveyance. West Edinburgh Limited, a company of which EDI are a consortium partner, paid over £170,000 in 1996 to acquire an “option to purchase” agreement in respect of Meadowfield Farm including the subjects. The agreement allows for a variable annual fee of the order of £15,000 to be paid to Mr Young and for the division of realised development value. None of this interest is agricultural; all of it is speculative that there will come a day when development of some kind will be permitted on the western margin of Edinburgh and along the A8 Corridor.
It should be observed for completeness that EDI is a company which is a wholly owned subsidiary of the City of Edinburgh Council. Mr Darling gave unchallenged evidence that although the two were, of course, separate legal entities, people active in the property market would tend to assume the objectives of EDI to be consistent with those of the respondents. This gives support to evidence of the continuing existence of speculative interests.
On the question whether the Green Belt will be breached in the location of the subject site in particular, either side may be right. Mr Darling pointed to the decision not to proceed with the northward extension of the Edinburgh By-pass from the Gogar roundabout as confirmation that to the north of the A8, next to the subjects there will be no physically defensible boundary in that form. That is, indeed, an example of the uncertainty induced by such a change in planning intention as to induce speculation. However, the Edinburgh–Fife railway line already provides a surrogate physical boundary in that area. We do not accept that this change automatically leads to the subjects being considered in a necessarily more favourable planning climate. But for the purpose of determining the open market value of the subjects it is unnecessary to have to choose between either predicted outcome. Both confirm that there are no statutory planning assumptions in terms of the 1963 Act which can favourably be made for the subjects. Once we depart from the need to make such a prediction and simply address the question of open market value of Rule 2 in terms of the 1963 Act, then market behaviour is all that is relevant. Such behaviour need not be wholly rational in planning terms provided it is not entirely unexplainable. In the A8 Corridor it is evident that investors are prepared to invest large sums of money in land acquisition in the belief that in the longer term a use of it more profitable than agriculture will be sought and permitted.
Given the order of magnitude differences in value between agricultural land at £2500 per acre and the possible value of land for development at up to £2 million per acre, we accept that identification of a specific probable use is unnecessary to the investment decision. Given all of the risks associated with such an investment then a stated future value is unnecessary to calculate a hope value bid provided that it is considered as a long-term high risk investment.
In all the circumstances, we have no difficulty in concluding that there is a speculative market for land in an area which includes the subjects.
It is well recognised in valuation practice that an assessment of hope value is often impossible other than by adopting an instinctive approach, particularly in the stages when the hope of permission is remote. However, it is not appropriate even for an expert tribunal to attempt to rely on such an approach. We must assume an investor who will consider the available evidence and reach a rational conclusion.
We take it as well established that, the term “in the open market”, in Section 12(2) implies that the land is offered under conditions enabling every person desirous of purchasing to come in and make an offer, proper steps being taken to advertise the property and to let all likely purchasers know that it is in the market for sale. “A willing seller” does not mean a person who sells without reserve for any price he can obtain. It means a person who is selling as a free agent, as distinct from one who is forced to sell under compulsory purchase powers. “Might be expected to realise” refers to the expectations of properly qualified persons who are informed of all the particulars ascertainable about the property and its capabilities, the demand for it and likely buyers.
We start by considering the most probable buyer. The use in this case is the passive one of long-term capital investment with no significant income stream during an uncertain term to maturity. The investment carries the clear possibility of loss of all that part of the capital invested above existing use value. That is because of a high degree of uncertainty. Ratio of risk to reward is therefore high and the investor is likely to be one with substantial funds and a portfolio of other investments enabling him or her to diversify away that risk. Of course, we have no detailed knowledge of the financial circumstances or motives of possible hypothetical purchasers, but we are satisfied on the evidence that the open market in which the subjects would be presented has been and continues to be populated with speculators of the type who have already undertaken purchases in the A8 Corridor generally and in the vicinity of the subjects.
Having identified the most probable buyer the next objective is to forecast the behaviour of the buyer. Answering this question requires a good knowledge of who is active in the market, the trend in demand and an analysis of those purchases which have been made most recently in the market.
Mr Harrison said that he had selected his four “hope value” comparable transactions because they were in areas covered by the Lothian Structure Plan and their Local Plans were at a similar stage of preparation as those affecting the subjects. He contended that they presented a sound indicator of market sentiment in respect of hope value in a plan-led system. We refer now to his table of comparables set out above.
In the case of Transaction 9, Mr Harrison had acted for British Coal who had sold land at Shawfair Farm to Lothian Regional Council. This land is within the Edinburgh By-pass and is part of the “South East Wedge”. At the time of the sale, in 1995, the Structure Plan had just been submitted to the Secretary of State and major releases of land were promoted in the Plan. There was a real expectation of development value accruing and the price of £2,462 per acre was higher than its existing use value as agricultural land, then about £1,000 to £1,500 per acre. Mr Harrison submitted that it was a good example of hope value. Industrial land in the area was worth from £30,000 to £45,000 per acre and residential land from £100,000 to £150,000 per acre. In cross-examination Mr Harrison said Shawfair was not advertised on the open market as being available. That procedure would have taken too long and the sale took place at the time when British Coal was being wound up. There were constraints on the land due to mineral workings and in 1995 the council purchasers were in the middle of local government re-organisation.
Transaction 10 had taken place between Strawson Holdings Limited, for whom Mr Harrison has acted, and Dunalastair Estates. Both are land traders as distinct from house builders. Mr Harrison said that they dealt in land with no obvious development value but with planning potential. They operated on a time scale of 10 to 15 years when considering capital gain. This land, at Wallyford, was within the Green Belt. Housing development was taking place there but the scope for new development was limited. However, pressure for development did exist. The station was being developed and this improvement in public transport added to the pressure for development. The price paid by Dunalastair of £5,740 per acre for 108 acres included hope value since it was well above the figure for good agricultural land. Two to three times agricultural value was the price they expected to pay. Dunalastair had applied for planning permission for residential development but it had been refused on appeal.
Transaction 11 referred to the sale of 3.88 acres of agricultural land at Gavieside Farm just outside Livingston at a rate of £5,155 per acre. Mr Harrison was unable to provide any further detail of this transaction but he was of the opinion that it must include hope value because the figure realised was considerably above agricultural value. Because the purchaser was Scottish Enterprise he believed that the land had probably been bought for some use related to employment.
Mr Harrison’s final hope value comparable, Transaction 12, was in respect of 808 acres of land at Adniston Farm, Tranent which was in the process of being sold by Lothian and Borders Co-operative at £3,218 per acre. A release of land for housing was expected in the Tranent/Macmerry area in the finalised east Lothian Local Plan. There was a good chance that part of this land would be allocated for that purpose. The purchaser was a farmer, but of the 16 offers received a number had been from property developers.
Mr Harrison claimed that the evidence from these transactions supported the £5,000 he proposed for the open market value of the subjects if there was to be any element of hope value.
We are not satisfied that £5,000 does represent the open market of land having hope value in all of these transactions. Mr Harrison agreed that in two of his comparisons, where there was extensive land acquisition, there was only a prospect of a small part of that land receiving the benefit of any future planning permission. In his evidence he confirmed that only parts of the agricultural land sold at Wallyford and at Adniston Farm Tranent could expect any release of land for development. It follows that if only part of these holdings stood any chance of a favourable planning decision the remainder would necessarily remain in agricultural use at agricultural value, and therefore support a value of less than £5,000 per acre. As the rate per acre paid for the land with actual hope value would be greater, it would be valued at a sum in excess of £5,000.
Although he was unable to say where releases for residential land might actually be made in the Tranent/Macmerry area, he estimated that land to accommodate 500 houses at 10 or 12 per acre might be released and some of it could be sited at locations he identified at Adniston Farm. If, say 50 acres to accommodate such development were released, and if half of these were to be located at Adniston Farm then some 783 acres would remain in agricultural use. Assuming an agricultural value of £2,500 per acre, the price per acre for the land with actual hope value in this transaction would be almost £26,000 per acre.
Clearly there is a broad range of possible calculations. The release of land may be more or less than that assumed. The value of the agricultural land may be different from that used here in illustration. Depending upon the value of these variables the resultant figure for actual hope value may rise or fall. The fact remains that, where there is a purchase of an extensive land holding only part of which can have any possible expectation of development, the level of hope value in the transaction is not to be found by reference to the average price for all of the land.
We are, of course, aware of Mr Harrison’s principal assertion that hope value was only evident in his comparisons because of the anticipation of an identified end use. However, we are satisfied that hope value without an identifiable end use can exist in the A8 Corridor. We do not think that these examples establish that there is a cut-off point on one side of which planning uncertainty exists and on the other side of which it is extinguished, that point being established by a plan-led system. The examples, while not straightforward, appear to be simpler in planning and development terms than the situation at the A8 Corridor. Property markets are local but these examples give some support to the conclusion that substantial hope value can exist in planning conditions which have some similarity to those affecting the subjects. However, we cannot accept that the comparables from other locations around Edinburgh can be used positively to demonstrate the level of any hope value at the subjects or at the Airport. For reasons already given we find that the A8 Corridor is unique in its physical and spatial characteristics, and unique also as a focus for pent up demand for commercial development.
In looking at market evidence it was suggested on behalf of the respondents that a residual valuation drawn on evidence from other transactions might be used as a check in the valuation of the subjects. The problem about use of the residual valuation method in this case is that it requires to proceed on assumption of a probable use to determine the full potential development value. It is not an approach which is designed to analyse the transactions which occur in a speculative market where unconditional offers are made for land where there is pent up demand but no short or medium term prospect of any permission likely to realise development value. Accordingly there can be little doubt that the preferred means of establishing the value of the subjects in this case is by reference to the comparable transactions which have been examined in evidence.
We come therefore to consideration of Mr Darling’s comparable transactions which have taken place in the A8 Corridor. It may be noted that ten out of the eleven transactions on Mr Darling’s Schedule involve a developer individual or property company. New Ingliston Limited are a party on five occasions, Mr McGregor on two occasions and companies associated with Mr Murray on four occasions.
Transaction 1 relates to land adjoining Ratho Station on the south side of the A8 and immediately opposite the Royal Highland Centre on the north side of the A8. The sellers were the RHASS and the purchaser was MIM Properties Limited. The sale shows that 25.85 acres of agricultural land in the Green Belt changed hands for £20,000 per acre in 1985. We also heard evidence of an excambion arrangement which was in fact implemented and which raised the effective price to £26,400 per acre. Mr Harrison commented that the relocation of the housing/playing fields proposal did not appear in the local plan. In his opinion this led to a transaction at a rate that would be higher than in today’s plan-led system and would have heightened speculator’s expectations.
Transaction 2 on the schedule shows a price of almost £21,000 per acre was paid in December 1988 for 18.10 acres of agricultural land in the Green Belt. The ground is located northwest of the junction of the A8 and Eastfield Road. The purchaser in this instance, Mr John G McGregor, was said by Mr Darling to be the instigator of the New Ingliston regime and, as we have observed, New Ingliston Limited feature as buyers and sellers in other transactions. We were informed that the buyer subsequently transferred this ground to New Ingliston Limited at a price of about £38,000 per acre but that the transaction was not at arms length.
In December 1998 New Ingliston Limited sold 5.93 acres of the above 18 acres to a Pension Fund for £2 million, which represented about £337,000 per acre. That ground had been granted planning permission for a “Park and Ride” operation in 1997 and is presently so used. That is Transaction 8.
Mr McGregor features in Transaction 3 where it can be seen that in 1989, he paid just over £33,000 per acre for land on the east side of Eastfield Road midway between the A8 and the entrance to Edinburgh Airport. This ground was subsequently transferred to New Ingliston Limited at a price which represented just under £20,000 per acre but again Mr Darling told us this was not an arms length transaction.
Transaction 4 relates to the compulsory acquisition, in 1992, by the then Lothian Regional Council of 3.107 hectares of land (7.677 acres) belonging to Mr Young. The land was immediately to the north of the Gogar roundabout and it was acquired to enlarge the roundabout and to enable the construction of a fly-over there (although subsequently an underpass was built). The claim for compensation in respect of that land was negotiated and agreed by Mr Darling with a Mr Elvin of the Region’s Estates Department. The price agreed was £307,080 based on a land value of £40,000 per acre. Mr Darling wrote to Mr Elvin on 21 July 1992, observing that the rate per acre agreed was “reflecting the hope value of this land having regard to its development potential and also taking into account the comparable price paid by the Council for other land acquired in connection with the road improvements.” That was the rate per acre paid to Mr Allison upon the compulsory acquisition of some of his land for the construction of the Gogar roundabout. Mr Harrison was unwilling to rely on this transaction and explained his own belief that there was an interest by the Region as co-developer of land at the Gyle to progress the transaction and to minimise delay to the development project. The developer contributed directly towards payment for the acquisition of this land by the Council as a member of the consortium involved in the development. He accepted, however, that the Tribunal would be entitled to rely on that as representing an agreed open market value in 1992.
Transaction 5 concerns a large area, 183 acres, of agricultural land in the Green Belt. It is located on the north side of the A8 and immediately west of the subject land. Mr Darling’s evidence was that the land was owned by two brothers one of whom had died. The other had a tax situation to resolve. New Ingliston Limited were the purchasers in 1995 but Mr McGregor had an involvement and Mr Darling’s opinion was that it was not an open market sale and the price of just under £5,500 per acre did not reflect hope value. Mr Harrison, on the contrary, was of the opinion that this transaction was reflective of true hope value. He observed that part of the area sold was sufficiently close to Edinburgh Airport to be potentially included in the Airport development zone. At the time of the transaction the period of uncertainty surrounding the Lothian Structure Plan existed. There was also uncertainty in respect of the possible outcome of the Green Belt Review of Boundaries and the Rural West Edinburgh Local Plan.
The companies involved in Transaction 6 are both owned by the same individual so again it was said to be not necessarily an arms length transaction. The 34.09 acres are located on the north side of the A8 west of the land comprised in Transaction 5. It is located to the northeast of the junction between the A8 and Eastfield Road and it extends almost to the east side of Eastfield Road. The sale in 1995 represented almost £9,400 per acre.
It is convenient at this stage to make reference to Transaction 10 where, in March 1999, an area of 1.16 acres realised a price of £400,000 which represented almost £345,000 per acre. This is a relatively small strip of land located along the east side of Eastfield Road and inhibiting access to Eastfield Road for the 34 acres involved in Transaction 6. Mr Darling said that this was one of the locations being considered by Edinburgh City Council when they found that they had a problem with the provision of park and ride facilities for the CERT line. The company, PPG Lothian Limited, which purchased the 1.16 acres referred to above is associated with PPG Leisure Ltd the purchaser in Transaction 6 which means the 34.09 acres extend to 35.25 acres and with a frontage to Eastfield Road. The effect of combining transactions 6 and 10 results in a total price of about £720,246 for 35.25 acres or a rate per acre approaching £20,500.
Transaction 7 was a sale in 1996 of agricultural land in the Green Belt at a price of just over £19,000 per acre. This was said to have been an arms length transaction.
Transaction 9 related to a small area, 0.63 acre, of ground immediately adjacent to the 18 acres of Transaction 2. The site is the subject of a lease from November 1999 at a rent of £40,000 incorporating a three year option to purchase at £400,000 which represents over £600,000 per acre. This arrangement affords the 18 acres an access to Hallyards Road.
In Mr Harrison’s opinion Transactions 8, 9 and 10 all relate to CERT and the site of the approved park and ride car park. This had full planning permission which was granted in accordance with the Lothian Structure Plan which had identified the need for and the location of this facility. He explained that approximately half the park and ride site, with planning permission, was subsequently sold to Norwich Life Pensions Limited for use as a car park related to the Airport (and not to CERT).
Transaction 11 relates to an area of land extending to 10 acres offered for sale on the open market in June 2000 by agents Montagu Evans and sold for £3 million (£300,000 per acre) in October 2000. The purchaser, IBIS (598), is jointly owned by Frogmore Developments plc and Salmon Harvester Properties Limited. This land is situated on the east side of Eastfield Road immediately south of the Hilton Airport Hotel. It is the closest undeveloped land to the built up area of the Airport. Mr Durman’s evidence was that at its current stage of preparation the Master Plan for the Airport did not include this site, but the owners of the Airport had made it clear that further land outside their existing boundaries would be required. The agent’s Sales Particulars offered a “Development Opportunity Adjacent to Edinburgh Airport … the fastest growing airport in Scotland and in recent years there has been extensive development in the immediate area … located within minutes of Edinburgh Park, Scotland’s Premier Business Park and will benefit from close proximity to the approved CERT link … The land is currently allocated as Green Belt…”.
Mr Darling told the Tribunal that it was clear from this sale that the open market value was £300,000 per acre which reflected the hope value that the purchasers considered was inherent within the open market value. The purchase was not subject to obtaining planning permission for development. For the respondents it was said that this was a site which was promoted in relation to CERT and Edinburgh Airport. The value had no bearing on the subjects in the “no-scheme” world.
Mr Harrison said that he did not consider the claimant’s comparable evidence supported the level of his claim for compensation. With the exception of Transaction 1, all the comparables related to the proposed CERT scheme. In the no scheme world, that evidence was irrelevant. He accepted that it was perhaps understandable that higher prices were paid prior to 1999, and particularly between 1994 and 1998 when the Lothian Structure Plan was in a state of limbo. However the Edinburgh Green Belt Boundary Study was approved on 12 April 1999 and so any speculation that may have driven hope values before that date was now suppressed. There were tangible reasons why hope value could accrue over and above existing use value in his comparisons. They represented a sound indicator of market sentiment in respect of both hope value in the current climate of the plan-led system, and also in the context of a now approved structure plan and local plans at final draft stage of preparation. If the Tribunal took the view that hope value did exist at the subjects then his comparisons, and the £5,464 paid for the land comprised in Transaction 5, supported his estimate of £5,000 per acre but he emphasised that it was not his contention that any hope value did exist at the subject site.
We do not consider that Transactions 8 and 9 can be accepted as relevant examples of hope value since there is evidence of planning permission. Similarly, while it is not possible to be sure, in the absence of any detailed information, as to what the purchasers are actually anticipating to happen at No 11, it appears to be the case that their expectations bring the site within the “near ripe” category (as defined by the Tribunal in Young v Lothian Regional Council, supra, at page 24K) and therefore approaching the point where hope value may translate into development value. We cannot distinguish what contribution the CERT scheme has made to the level of hope value established at this location. However, having perused all the planning documents, heard the evidence and conducted a site inspection the Tribunal is inclined to the view that in this instance such a transport link is a factor secondary to the proximity of the land to the boundary of the Airport and its potential for a range of Airport related uses, possibly following acceptance of the Master Plan now in preparation. Even if the effect of the scheme has a part to play, we are satisfied that, in any event matters are at a stage of maturity of expectation well beyond that which may exist elsewhere in the locality.
Mr Darling foresaw development at Eastfield Road as the western end of a carpet of further development which he envisaged rolling out eastwards from the Airport to Gogar roundabout. This we do not accept. While the nature of the A8 corridor is such that development can be envisaged within it we find nothing in the evidence which allows an assumption that development at Eastfield Road once commenced will inevitably progress along the A8 to the subjects, over a mile distant. Therefore, even although he has made a considerable discount of two-thirds from the rate of £300,000 per acre to his own suggested rate of £100,000 per acre we cannot find any economic, institutional or physical association between the relevant subjects to justify such a comparison of hope value.
One of the difficulties of making comparison between the subjects and the transactions in the A8 Corridor is that the latter are clustered in the Eastfield Road area. There is little to justify any prospect of general development in other locations whatever the development pressure. In examples where the land purchase itself is extensive there is little possibility that more than a modest part will benefit from any future development.
In the case of Transaction 5, for example, it is not known what proportion of the 183 acres could realistically be considered to be capable of attracting planning permission for future development related to the Airport, and, at the date of purchase, there were some uncertainties as to access. Unlike the other comparables it does not have access to Eastfield Road. On the evidence that whatever concession to development pressure there might be, the A8 should remain a green or wooded corridor and that the only material development opportunity in the foreseeable future is Airport related, there is no justification for taking more than a modest portion of this extensive tract of land as having actual hope value. Mr Harrison’s evidence was that it was sufficiently close, at least in part, to the Airport to be potentially included within the airport related activities zone. This would tend to lie in the area nearest to Eastfield Road and to the Airport. Assuming an agricultural value of £2500 per acre produces a rate of above £20,500 per acre as the actual hope value of say 30 acres.
There is also scope for adjustment to be made to two of the comparables to obtain a clearer perception of the price per acre paid for holdings in this locality. The subjects described in Transactions 6 and 10 are both now in the ownership of associated companies. The purchase of the narrow strip of land separating the 34.09 acres from Eastfield Road offered considerable benefits for development. Looked at as a whole, the price paid for the total 35.25 acres was in excess of £20,000 per acre. This land is located at the interchange of Eastfield Road and the A8. Access to the A8 is not likely to be permitted so close to the existing interchange but the site has a considerable frontage to Eastfield Road, (thanks to the second purchase), and is opposite the existing park and ride site.
Ignoring for the time being the need for adjustments to the transactional evidence, and looking only at Plots 2, 3, 5, 6 and 7, the price per acre actually paid for land without any obvious prospect of planning permission in the vicinity of the Airport and in Eastfield Road in particular averages £17,591. If the adjustments suggested above, to isolate actual hope value, were made to transactions 5 and 6, the average price per acre becomes £22,800 with a range of £19,000 to £33,000.
These transactions cover a period of over ten years during the first half of which there were reasons, as explained by Mr Harrison, for a degree of uncertainty as to planning outcomes in the area, sufficient for there to be recognisable scope for speculation. If his views were correct, the sales in the later years should have been affected by the growing planning certainty. Hope values do not appear to have risen over the latter period and expectations may, accordingly, have been dampened to some extent. It is clear, however, that the supposed planning certainty did not have the effect of removing expectations of planning gain.
However, we find the levels of value in the locality of Eastfield Road to be of limited relevance to the subjects. Interest in land near Gogar roundabout derives from its own strategic location. There are differences in terms of location and expectation. Although we would expect the hope value of land at Gogar roundabout, and elsewhere in the A8 corridor to be of the same order as the range of hope value demonstrated by these comparisons we cannot rely on them as a direct guide.
We can consider evidence of subjects nearer the Gogar interchange such as Mr Allison’s land to the south-west of the roundabout part of which was compulsorily acquired at £40,000 per acre and evidence at the same time of the compulsory acquisition of 7.677 acres (3.107 hectares) of land from the claimant by Lothian Regional Council in 1992 for £40,000 per acre.
The acquiring authority had a statutory obligation to compensate for his loss of an interest in land at open market value. We also note the evidence that this level of value was mirrored in other settlements at the time. Mr Harrison accepted in cross-examination that there was no established reason why the Tribunal should not accept the figure as proper evidence of value. We see no reason not to do so.
The other evidence available in respect of value is the letter from the Chairman of Murray International Holdings, dated 20 May 1992, to Mr Young which read:-
“Further to our recent discussion, I confirm that in November 1990 I offered to purchase land to the north of Glasgow Road which you had recently acquired from Sauchie Estates. Both you and I were fully aware that this land was ear-marked to be included in our overall plan for the area.
I confirm I was prepared to offer a price in the region of £1.72 million for the 43 acres as per a similar one I legally made to one of your adjoining neighbours. You have consistently indicated you are not keen to sell and I understand this remains the position but would of course be prepared to discuss further if this was to change.”
That offer represented £40,000 per acre and is in respect of the 42.86 acres referred to at the beginning of this Opinion. The fact that this offer was not converted to an actual transaction left its value as evidence open to challenge by the acquiring authority. But given the whole content of the letter, the activity of that company in the market and the actual evidence of prices paid, we have no difficulty accepting that this informal offer indicated a hope value for the land at that time.
Mr. Darling said that the price of £40,000 per acre paid by Lothian Regional Council in 1992 was consistent with the £100,000 he now considered appropriate because, “development pressures have materially increased, as has the general level of land values with planning permission.” He considered that hope values were following the trend of rising land values. This he felt was demonstrated by Transaction 11 which was another factor relied on as justifying his valuation.
We do not see that it is possible to make a direct correlation between the trend in hope value at the subjects and the trend in values of land with planning permission in West Edinburgh. Hope value, as has been explained, is held in tension between the demand for land and the view taken of the probable future supply of land. It cannot be assumed that there will simply be a series of extensions of the Green Belt. It may be that the line of the Green Belt to the west of Edinburgh will never again alter; it is by no means inevitable that it will. If the expectation of release of land in this locality was as a consequence deflated that, in turn, would be expected to deflate hope value even if demand was rising. Mr Darling agreed that hope value could fall as well as rise as expectations as to future planning changes altered. We note that hope value in the Eastfield Road area has not increased over the last decade, with the obvious exception of Transaction 11 which we have indicated is in a different category of expectation.
When considering the subjects in light of the said figure of £40,000 it is important to recognise that the subjects are not immediately adjacent to the roundabout. The eastern part is separated from the road by mounds which make the site less attractive because of their very presence and because they eliminate direct exposure from the roundabout and the highways radiating from it. It is the northern part of Mr Young’s fields, next to the airport, which are the subject of acquisition. That part is physically less desirable than the southern part of the fields and is certainly less desirable than land suffering none of these disadvantages.
The subjects have other disadvantages. They would not be suitable for some forms of development because of their location at the end of the secondary runway. There will be restrictions on development because of the existence of the gas pipe line. The claimant, while not proposing any particular end use, has illustrated the possibility of ingress and egress with reference to a low traffic generating use. It is accepted that high generating traffic uses such as a park and ride location are not appropriate. The percentage of the site which may be developed may therefore be low in relation to competing sites. That implies lower development value. The subjects are landlocked and rights of access would be required from the A8 across the wedge shaped strip of land if they were to be developed.
These comments are principally applicable to fields 2066 and 4675. It was accepted that fields 7764 and 9264 to the west were landlocked because access would not be permitted from the A8. Mr Darling anticipated that access would eventually be obtained from the west as a consequence of the carpet of development that he envisaged rolling out from there.
In our opinion these two fields suffer disadvantages other than lack of access. The environmental and archaeological features identified in the draft local plan present a barrier to connection with any future development to the west as well as an inhibition to development in these fields themselves. More importantly we do not accept that development will be permitted across the considerable distance between Eastfield Road and the subjects, even although we accept that it may be permitted in the area of Eastfield Road itself. Our analysis of Transaction 5 has suggested that after identifying a possible area for development proximate to the Airport the purchaser was otherwise paying only agricultural value for the bulk of that land holding. These extensive acres are to the west and bordering the subjects. Any prospects for development there are, physically and by reason of lack access, not associated with the interchange at the Gogar roundabout. They are potential candidates for the woodland corridor treatment proposed in the A8 Corridor Study.
We are satisfied on the evidence that there is an expectation of releases of land from the Green Belt within the A8 Corridor from the Royal Highland Showground to the Edinburgh By-pass. It is clear that such expectation is highest in the Eastfield Road area, where the market has been most active. We can accept that there is a basis for genuine expectation in the open market that, at the Gogar roundabout, because of its location on the edge of the urban area of Edinburgh and because it is a strategic road transportation interchange there may also be such release. Certain types of development might come to be permitted at such a location which would remain inappropriate elsewhere in the broad acres of the Green Belt. However, we are also satisfied that the evidence of development pressure at Eastfield is substantially influenced by its proximity to the airport terminal buildings. We are satisfied that the evidence of values towards the west end of the A8 corridor would not provide a speculator with a direct basis of assessment of value at the east end.
We have accordingly come to the view that the most reliable figure available as a starting point for assessment of “hope value” for the particular subjects here in question is the open market value of £40,000 per acre paid in 1992 for the adjacent land. However, we have no doubt that this figure requires modification both to reflect the overall effect of the underlying general changes relevant to speculative dealing in this area and to reflect the comparative differences between the parcels of land in issue.
The market is speculative one. Even the transactions which have been relied on within that market have been based on the possibility of some form of development rather than a specific use for which planning permission might conceivably be granted, at some future date, within the Green Belt. The claimant’s position was clearly based on that approach. While the rewards are potentially considerable the risks of loss are also very high. The sums paid as hope value in the local comparisons are typically of the order of 2% of possible development values, at today’s prices.
Although, on the evidence, the demand for land in this locality is constant and its development value is increasing with the prospect therefore of higher rewards, we are satisfied that the planning position now established in this part of the Green Belt has shifted the ratio of risk to reward against the speculative investor. In other words the increased determination of the planning authorities to defend the Green Belt means that the risk of not obtaining planning permission has significantly increased.
However, we have given consideration to the fact that, as the amount invested is low compared with the potential for development in this area, a speculator may be relatively indifferent to an increase in the stake required for entry to this market. He may be more concerned with securing an opportunity to purchase rather than keeping his investment amount to within a very small percentage of his possible future capital gain. As the value of money has changed over that period, albeit in a low inflation environment, it could be that an entrant into the market would consider paying much the same figure as the market had demanded in 1992, despite the risks being higher. It can, nevertheless be assumed that, where the conditions of the market are seen obviously to be moving against him in planning terms, the hypothetical purchaser would expect to be able to reflect that in his negotiation of price. These considerations can only be weighed very broadly.
If there had been no change in the effect of planning policy it can reasonably be assumed that today’s hope value price for the adjacent land at the Gogar roundabout would be higher than the £40,000 per acre paid in 1992 to reflect both the change in the value of money and also the importance of the development pressures referred to in evidence on behalf of the claimant. However, there has been an adverse change in planning policy and we are of the view that this change is a factor which at least outweighs any pressure for an upward movement in that value. At the end of the day we have concluded that the evidence supports the view that the general factors, for and against modification of the 1992 figure, should be treated as cancelling each other out. We, accordingly, have to consider the specific location of the subject site and its particular disadvantages on the basis that a site in the immediate locality, not so disadvantaged, would have a hope value of £40,000 per acre.
The disadvantages relevant to the subject site in terms of being effectively landlocked, the existence of a pipeline and the proximity to the airport and its secondary runway with consequential restrictions on some forms of development, have been referred to in detail. What weight a speculator would attach to these matters is difficult to forecast. Mr Thompson accepted on a broad approach that the effect of a lack of access might justify a reduction of one third. We are not satisfied that speculative developers, such as those who have repeatedly featured as parties in nearby land transactions, would automatically apply such a figure. It may, perhaps, be appropriate as a guide in a situation where there is an identified development being impeded by an identified ransom strip. Over a longer term a speculator might well have reasonable expectations of negotiating a lower figure. However, in the present situation, where there are several comparative disadvantages as well as lack of access to be assessed and where only a broad approach is possible, we consider that a reduction of one third can be taken to be realistic. Accordingly, in the case of the subject land to the east of Castle Gogar Drive a reduction from £40,000 of one-third is appropriate giving a value rate which can be taken as £27,000 per acre.
The land to the west of the Drive is, in our view in a different category. It is more remote from Gogar roundabout and we are not satisfied that it can properly be compared with any of the suggested comparators. If there is to be any Green Belt left in the A8 corridor we consider that this land is the most likely not to be released. If it was free for development, it would share the same problems as the eastern subjects in obtaining access to the A8 but would, of course, require separate negotiation with the proprietors of the Drive to allow access to be taken to it from the eastern site. We have already expressed our conclusion that we do not accept the likelihood that access would become available from the west.
We do accept that there would be speculator interest in this western site but assessment of the value is almost a matter of impression. We take the view that it can fairly be fixed at £10,000 per acre.
|10.3 acres (East of Castle Gogar Drive) @ £27,000||=||£278,100|
|8.5 acres (West of Castle Gogar Drive) @ £10,000||=||£85,000|
The claimant sought compensation, in addition to the open market value of the land taken, in respect of severance and injurious affection for the small triangle of land retained in his ownership to the north of the subjects. The claim was for the diminution in value of the retained land for the reason that it would be detached from the land remaining with the claimant’s farm and would be physically landlocked and incapable of any productive use. Mr Darling proposed that this head of claim be made at the same rate per acre as for the land acquired, that is, total loss of value.
In their offer, on a hope value basis, the respondents had initially made the same allowance for loss under this heading as on their existing use basis in the amount of £150, representing a one-third reduction in the agricultural value of the land. However, during the course of the hearing it appeared that the respondents conceded that the most appropriate way to deal with this issue was for them to acquire the severed land together with the land compulsorily acquired. This concession implies an open market value at the same rate as the land compulsorily acquired. We do not understand the concession to extend as far as agreement to purchase the severed land at that price.
In the circumstances we propose an award for injurious affection at the same rate of £27,000 per acre. But for compulsory acquisition this land would have the same open market value as the land taken. Compensation for land not taken cannot be awarded at full open market value because the claimant retains ownership and enjoys such use as it may afford. Although the benefit of such use is negligible the area is small and we consider that the rate should simply be diminished by £2,500 per acre, being existing agricultural value, to give a rate of £24,500 or £7,350 for the 0.3 acre.
Although the respondents’ position included provision of £2000 in name of accommodation works, it is inappropriate to make any such award when the assessment of compensation is on the basis of development rather than existing use. No such claim was made expressly and we make no allowance under that head.
The Tribunal’s determination of compensation is therefore made up as follows:-
|Value of fields 4675 and 2066||4.128 ha||£278,100|
|Value of fields 9264 and 7764||2.444 ha||£85,000|
|Severence (part of field 2066)||0.121 ha||7,350|
In addition to the £370,000 there must be paid the surveyor’s fee in accordance with Ryde’s scale and such legal fees as were incurred for the preparation of the claim.