In Yarde v London Borough of Newham, the acquiring authority made a compulsory purchase order relating to a house owned by Mrs Yarde. This was confirmed by the Secretary of State in July 2007.
The house vested in the authority on 15 January 2008. That was the date used for the valuation of the property to enable the calculation of compensation. The authority's surveyor used three comparable nearby properties and ruled that he would have assessed the value at £300,000. However, he reduced the value to take account of the poor condition of the house and the consequent cost to a purchaser who would have renovated the house.
Mrs Yarde valued the property at more than £420,000. However, the Lands Chamber found there was no evidence to support that sum.
The Lands Chamber found that the authority's valuer was correct to value the house at the date of vesting on the basis of section 5 of the Land Compensation Act 1961. This provides that "the value of the land shall ... be taken to be the amount which the land if sold on the open market by a willing seller might be expected to realise". The house was in poor condition at the vesting date as a result of many years of neglect.
The Lands Chamber also accepted the point that a purchaser would have been entitled to expect a profit of at least £20,000 to compensate for the trouble and risk of repairing the house.