SMM 173 - Applied Appraisal Valuation: Methods and Case Studies

Assignment Task

Background 

Estelle Clarence owns a smallholding (known as the Old Farmer's House) which she purchased 20 years ago to run her riding school from at £450,000. The property comprises a detached period 2-storey dwellinghouse of 4 bedrooms, 12 acres of grazing land, an outside exercise arena and stabling and a tack room/stable for 6 horses.

Since buying the property she has modernised the house, increased the horse boxes from 6 to 10 (all boxes occupied), built a small administrative barn/building and resurfaced the exercise arena at a total cost of £110,000. Over the years, other repairs have been carried out to maintain the fences, reseeding of the grazing fields and adding additional water points around the holding.

Ms Clarence owns 5 of the horses with the other five owned by private individuals who pay a weekly rent for the use of the stables, exercise arena and grazing.

Question

All question should be answered with marks as allocated and word counts for indicative purposes. Word counts will not apply to valuations Suunnitted in MS Excel.

You must submit your essay and report answers in MS Word supported by Excel spreadsheets with your calculations.

All answers should have valuation and cost assumptions clearly stated to support the use of all inputs. Numbers on a page without supporting notes will not earn marks. Where answers require legal justification through quoting relevant statute and/or case law, the referencing should comply with Harvard standards. When quoting case law, you should concentrate on the findings of the court or tribunal rather than quoting all the factual detail unless it is relevant to the argument.

Provide answers to the following three questions:

(a) Examine the law (statute and case law) surrounding severance with specific application to the case study and appraise how the impact of severance (and thus loss) could be reduced.

(b) Using the information provided, construct a fully supported compulsory purchase heads of claim for Estelle Clarence. You should provide the claim as a costed valuation and tie this into a set of notes to explain what you have done. It is crucial that you use the evidence given and analyse this to assist formulating the claim. You may make any other reasonable assumptions as necessary to support your calculations 

(c) There is a proposal that CCC may, within the next 5 years, carry out other road improvements and are looking for a children's equestrian centre to support disadvantaged children in their care. Discussions between the County Council and Miss Clarence have led to the possibility that the Council may purchase by agreement, in advance of future compulsory purchase powers, the whole property less the immediate house with its access to Main Road and half an acre of land of surrounding land. This is not wholly accepted by Miss Clarence as she would like to sell out as a whole.

If the acquisition was to proceed on the basis of (a) purchase of the entire smallholding or (b) the small holding less the house and 0.5 acre surrounding land, calculate the compensation claims if the acquisitions were to proceed on these bases.

All relevant valuation assumptions must be clearly stated and the usual valuation protocols followed.

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