A landowner has been awarded more than £5.8 million compensation under the Electricity Act 1989 after its development plans were scotched by an overhead power cable crossing its land. The Upper Tribunal (UT) ruled that the cable’s presence had reduced the land’s value close to zero and the pay-out represented a fair assessment of the blight on its potential for housing development.
Arnold White Estates Limited (AWE) was in 2007 granted outline planning consent for large-scale housing development on its land-holding of about 20 acres on the southern edge of Leighton Buzzard, Bedfordshire. AWE soon afterwards contracted to sell the site to house-builders for more than £25 million.
But the sale of just over three-and-a-half acres of the site – at an agreed price of more than £5.3 million - was conditional on removal of an electricity line that had crossed it since the 1960s. At the time, AWE and local authority planners were confident that the line would be moved elsewhere to make way for development.
However, that proved a forlorn hope and, in June 2010, the Secretary of State for Energy and Climate Change granted National Grid Electricity Transmission Plc. (NGET) a wayleave to keep the line in place for another 15 years. NGET must now pay the price for being granted that right after the UT ordered it to pay AWE £5,829,476 compensation for the loss of the land's development potential.
The tribunal agreed with AWE that its loss as a result of the cable's continued presence should be calculated on the basis of the index-linked sale price that had been agreed in 2007. NGET's plea that that took no account of the drop in land values in intervening years was rejected. The tribunal accepted that the land would be incapable of development until the wayleave expired and ruled that, 'in the real world', the strip of land affected by the cable was only worth a nominal £1.