Sanderstead Removals Limited v Andrew Mouland (Valuation Officer)

This is an appeal against a decision of the Valuation Tribunal for England (‘the VTE’) dated 20 October 2025 in which it dismissed the appellant’s appeal against an existing rating assessment of rateable value £174,000 effective from 1 April 2017.

The appeal concerns a warehouse and office complex near Godstone in Surrey. The property (‘the Property’) is occupied by a removals company and is mainly used for the storage of customers belongings whilst they are in the process of moving.

The appellant’s position is that the assessment should be reduced to rateable value £130,000. The respondent says that assessment for the Property should be altered to rateable value £167,000.

I inspected the Property on 10 April 2026 accompanied by the site manager, Mrs Heather King MRICS Dip Rating and Mr Mehbub Ali MRICS of the Valuation Office (‘VO’). On the same day I also carried out external inspections of comparable properties in Surrey.

This appeal was heard under the Tribunal’s simplified procedure. Mr Austin Marshall MRICS appeared as both advocate and as an expert witness (as the Tribunal’s Practice Directions permit). Mrs King represented the respondent Valuation Officer and called Mr Ali as an expert witness. I am grateful to the parties for their submissions.

The Property is in the site of a former quarry about a mile north of the village of Godstone and approximately 0.5 miles north of Junction 6 of the M25 Motorway. The nearest town is Oxted which lies some 3 miles to the south east. From the motorway the site is reached by turning off the A22 road on to Quarry Road, a single track lane which runs uphill for a distance of about 500 metres to the site. Quarry Road then bisects the Property and continues past five residential properties before terminating. The parties helpfully provided a statement of agreed facts on which the following description of the site and buildings is based.

Following the closure of the quarry the site was redeveloped for commercial use during the 1970s. The perimeter of the Property is not fenced or gated and the part of Quarry Road that runs through the Property is included in the hereditament. It is a designated bridlepath and bike path (route 21) and the public therefore have a right of access over the road at all times.

The Property comprises five purpose-built warehouse buildings arranged in a cluster to the north of Quarry Road, and office, carparking, and storage land which are located towards the southern end of the site. The whole site amounts to some 8494.9m² (2.09 acres). Warehouse 1 is constructed on sloping land and access to this unit for loading is by means of a raised concrete platform the uppermost part of which is about 1.5 metres above ground level. To the side of the platform, there is a raised access point, about 1 metre in height. The adjacent Warehouse 2 is similarly equipped with a small loading apron.

Warehouses 3, 4, and 5 are accessed via a gated roadway 3.8 metres in width at the entrance, widening to 4.9 metres and then further widening to 15.5 metres to provide a limited turning circle. There are two portacabins adjoining Warehouse 5, one on top of the other. They each measure about 23.4 m². Access to the upper portacabin is by an external staircase.

The office building is a two-storey rotunda structure built in the 1980s. Owing to the sloping nature of the Property the main entrance is at first floor level and can be accessed by an aerial walkway. Twenty three marked car spaces are located around the office building. There is a separate piece of unsurfaced land on the eastern edge of the site behind the office building which is used for overflow parking.

A further area of open land, adjacent to the entrance of the site and raised above Quarry Road is utilised for the placement of shipping containers which are themselves used for storage, and for lorry parking. This land which extends to 566.6 m²,is fenced and gated and accessed from the concrete apron to the front of Warehouse 1. It is agreed that on the material day there were twelve containers on the land.

As far as the individual buildings are concerned, the warehouses are all of steel portal frame construction with brick/block lower walls and profiled steel cladding above. The roofs are clad in a similar profiled material but unlike the walls are insulated. Corrugated plastic roof lights are provided. None of the warehouse buildings are heated and each is equipped with a single roller shutter door and a single-phase power supply. Warehouses 1,2,3, and 4 were all constructed in the 1970s and Warehouse 5 was added in 1999.

Warehouse 1 has an eaves height of 7.47 metres. This building is linked with Warehouse 3 by a roller shutter door at rear. As Warehouse 3 is built on higher ground, access between the two buildings is by a ramp in Warehouse 3. Loading access for this building is by the canopied loading platform at the front and there is a single roller shutter door.

Warehouse 2 has an eaves height of 5.86 metres. This building is also linked to Warehouse 3 at the rear by an opening in the dividing wall, where there is a shallow ramp. There is no interconnection with Warehouse 1 next door, which is at a lower floor level. Access for loading is from a small apron outside the roller shutter door, beside the road. The road beyond the apron is inclined.

Warehouse 3 has a low eaves height of 3.18 metres. The building is constructed in three bays supported on steel columns. It is connected to Warehouse 1 by a roller shutter door in the southern wall. Again, there is a ramp to overcome the 1.35 metre difference in floor level between the two warehouses. Consequently, the access ramp extends to about 42 m². Warehouse 3 is also linked to Warehouse 2 by an opening in the southern wall. The difference in floor level here is 0.19 metres and there is a ramp down within Warehouse 2. It is also connected to Warehouse 4 by an entrance with a wooden sliding door on the northern wall of the building. The internal concrete floor of Warehouse 3 is not all at the same level. Approximately halfway back into the unit and across its entire width there is a fall in the floor level of 0.31 metres. This difference in level is managed by way of a ramp which covers an area of 104 m².

Warehouse 4 has an eaves height of 3.89 metres. This building is next door to Warehouse 3 and is connected internally. External access is through a roller shutter loading door from the side roadway.

Warehouse 5 also has an eaves height of 3.89 metres. This building is detached from the other four warehouses and is again accessed from the side roadway.

The office building has offices of a basic standard on the upper level with toilet facilities, showers, and a works office on the lower level. The upper-level offices have two cassettes to provide heating and cooling. The lower level has no heating. The following plan depicts the layout of the site.

Non-domestic rates are a tax on property and the unit of property which is the subject of tax is the 'hereditament'. Section 64(1) of the Local Government Finance Act 1988 (the 1988 Act), defines a hereditament by reference to the definition in section 115(1) of the General Rate Act 1967, which provided that:

Schedule 6 of the 1988 Act contains provisions about valuation for the purposes of non-domestic rating. Paragraph 2(1) provides that the rateable value of a hereditament is taken to be equal to the rent at which it might reasonably be expected to let from year to year if let on the antecedent valuation date on certain assumptions.

The first assumption in paragraph 2(1)(a) is that the tenancy begins on the day by reference to which the determination is to be made. The second assumption, in paragraph 2(1)(b), is that "immediately before the tenancy begins the hereditament is in a state of reasonable repair but excluding from this assumption any repairs which a reasonable landlord would consider uneconomic".  The final assumption, in paragraph 2(1)(c), is that the tenant undertakes to pay all usual tenant's rates and taxes and to bear the cost of the repairs and insurance and the other expenses (if any) necessary to maintain the hereditament in a state to command the agreed rent.

Statute requires that the appeal Property be valued reflecting certain matters as they existed on the material day, which for the 2017 Non-Domestic Rating List is 1 April 2017, and by reference to values pertaining at the Antecedent Valuation Date (AVD) which is 1 April 2015. The matters which must be taken at the material day are set out in paragraph 2(7) of Schedule 6 Local Government Finance Act 1988. The matters relevant to this appeal are:

The Property was originally let to the appellant on a full repairing and insuring basis for a term of 10 years from 18th November 2011. The landlord was and remains Fry’s Properties Limited who are unconnected to Sanderstead Removals Limited. The lease is inside the Landlord & Tenant Act 1954, and the letting was concluded with an initial three month rent free period followed by six months at half of the annual rent of £155,000.

Under the terms of the lease the tenant may not make any internal non-structural alterations without the landlord’s consent and is prohibited from making any structural alterations. A retrospective licence to carry out works was issued on 18th February 2013 after the tenant carried out the following:

The lease provided for a rent review on 18th November 2016 to the open market rental value. The review was not implemented by the landlord.

The lease was renewed in 2022 and backdated to 2021. The rent was agreed on a stepped basis over the first five years of the 20 year term, rising from £225,000 to £325,000 per annum. There is a break clause in favour of the tenant in November 2031. The tenant agreed to undertake further works which Mr Ali costed at £91,547. He considered that this rent on an in terms of rateable value basis amounted to £285,185 per annum. In December 2024 the landlord agreed a reduction in the rent from an equivalent figure of £270,938 to £153,616 per annum.

In compiling rating lists the VO groups similar properties together in valuation schemes. For the purposes of the 2017 Revaluation the Property was placed in a scheme applicable to miscellaneous factories, warehouses, workshops, and stores not located on industrial estates and built between 1955 – 1979. The scheme relates solely to the Borough of Tandridge. Properties in this scheme have a base rate value range from £55.00 to £80.00 per m². Features such as parking are included in the basic value but other aspects of the property such as fenced and surfaced land or storage containers are valued separately.

Both parties adopted the same starting point for their valuations, namely the agreed tone of £55.00 per m², and there was consensus about the adjustments for lack of heating (-2.5%) and insulation in the warehouses (-2.5%). The appellant makes three allowances for layout/fragmentation (10%), access and adverse topography (10%) and security (5%). The result is a valuation of rateable value of £130,000. The VTE, in its decision, applied an allowance of 2.5% for layout.

The respondent takes a different approach. He takes the view that many of the disadvantageous characteristics of the Property are already reflected in the tone and to make further allowance for them would amount to double counting. He does however allow 5% for the floor level issues in Warehouses 3 and 4 before making an end allowance of 7.5% for the layout of the site to arrive at rateable value £167,000.

In its decision the VTE determined the total area of the Property at 3,498.49 m² and from that figure the area in terms of main space (‘ITMS’), having applied a factor of 1.2 to the offices, is 3,248.02 m². In this appeal Mr Marshall’s calculation of the total area excluding the storage land mirrored that used by the VTE whereas Mr Ali arrived at a figure of 3,545.39 m² using identical components to Mr Marshall. Arithmetically the correct figure is 3,545.39 m². The ITMS calculations were also disparate, but there is no need for me to determine that figure.

As the tone is agreed, it would appear that the task for the Tribunal is simply to determine the appropriate end allowance. However, as the tone is said by the respondent to already reflect a variety of deleterious aspects usually found in properties of the type included in the scheme it is necessary to investigate whether that proposition is accurate. I therefore turn to the expert evidence.

Mr Marshall is a surveyor with Conneely Tribe, Chartered Surveyors and is based in London. He has 28 years’ experience of rating valuation. Mr Ali is a Senior Valuer in the Croydon office of the VO. He joined the VO in 2015 and qualified as a Chartered Surveyor in 2023.

Before I consider the evidence relating to tone and allowances, I note that neither expert placed much weight on the passing rent. Mr Marshall took the view that the landlord was likely to have been professionally advised in relation to the 2016 rent review and that the passing rent was already full, or more than full, value. He preferred to start from what he described as “a sound basic tone derived from the available evidence”. Mr Ali did at least provide an analysis of the passing rent. He derived an ‘equivalent constant rent from the first five years rents and then added the annualised cost of the improvements undertaken by the tenant. This produced a figure of £147,622 per annum which he said was the adjusted rent in terms of rateable value.

Notwithstanding that the tone is agreed between the experts, Mr Ali, and to a lesser extent Mr Marshall, devoted a significant part of their reports to the analysis of comparables in support of their respective positions. The following properties were amongst those identified by the experts and which demonstrate that the scheme covers a broad range of property types and locations.

Turning to end allowances the experts identified seven comparables that had informed their conclusions. These are shown in the following table:

I will deal with each of these allowance comparables in turn.

Mr Marshall provided an ariel photograph of this site, and it appears to be a small warehouse and yard reached by a narrow roadway which itself connects to a country lane. Mr Marshall commented that the allowance of 10% was agreed as part of a ‘challenge’ decision and regarded it as useful evidence. Mr Ali said that “this is a materially different market context to the appeal property and is not comparable.”

This comparable has more in common with the Property. It occupies a site close to junction 6 of the M25, the site is elongated but broadly triangular in shape, it slopes and the entrance is shared with another occupier. The total site area is in excess of 7,000 m². In his report Mr Ali said that the allowance was given for the size of the site. He commented that the allowance did not demonstrate that the Property suffered from an equivalent “size” disadvantage against its own comparables or that a similar quantum allowance should be imported. He considered that this property did not provide a sound basis for direct comparison with the Property, and he therefore placed limited weight on it.

This property comprises nine separate buildings together with 32,814 m² of hard-surfaced land providing circulation and external storage. Some of the buildings date from the 1940s. Despite the annotation of ‘divided or split site’ in the table it is in fact fully enclosed. The allowance refers to the fragmentation of the various buildings on site. As its address suggests, its shares nothing in terms of location with the Property.

Mr Marshall had been personally involved in this property and noted that the site was level and was not encumbered by rights of way. His view was that the Property was “marginally less compromised….but not by a wide margin”. Mr Ali opined that allowances of 7% for access and 12.5% for fragmentation took account of the particular physical characteristics and operational constraints of the site. He did not consider that the allowances were applicable to the Property owing to material differences in configuration, layout and functional utility. He concluded that it did not provide a sound basis for direct comparison with the appeal property, and limited weight had therefore been placed upon it.

These modern units are a located in an industrial estate in Redhill. One of these appears to be used, in part at least, as a showroom. The 5% allowance suggests that the units are contiguous but not interlinked. Mr Ali described it as follows: “The property comprises distinct sections of accommodation with differing forms and functions, including a modern glazed frontage element and adjoining industrial units arranged behind and to the side. The layout results in separation between elements of accommodation, with differing access points and a lack of a single, uniform operational space.” Mr Marshall noted the size of the aprons to the front and the level site. Mr Ali placed limited weight on it.

Unit 55 is an area of storage land forming part of an industrial estate. The site is shared with the neighbouring Unit 53. Mr Marshall said that this comparison directly supported the 5% allowance he had adopted. Mr Ali, on the other hand, said that the agreed allowance of 5% at Unit 55 acknowledged the inherent security limitations of storage land and shared control. He considered that an enclosed multi-unit hereditament such as the Property was in a different market and physical context and should not be directly compared to the situation at Unit 55. He accordingly placed limited weight on this comparable.

Units 2 and 3 are two adjacent industrial units occupied and assessed together. There is an agreed 7.5% allowance for the ‘divided or split’ unit. Mr Marshall considered that the divided and fragmented of the Property was more burdensome by comparison and his valuation therefore included an allowance of 10%. Mr Ali commented that the allowance at Units 2-3 had been determined by the Valuation Tribunal and comprised 5% to take account of the divided units and 2.5% to reflect specific physical disabilities including limited access to the loading bays and a lower eaves height in comparison to neighbouring units. He concluded that the overall allowance was specific to that hereditament and was not transferable to the Property.

These units comprise a number of separate buildings on a discrete site and Mr Marshall considered the arrangement to be akin to the Property. He thought that the site was level, with easier access, circulation and turning. Mr Ali agreed that the allowance reflected the divided and fragmented nature of the site but place limited weight on this evidence on the basis that the units in the Havenbury Estate comprised a row of multiple units each with its own frontage and roller shutter access.

The valuation scheme of which the tone forms part spans a range from £55.00 per m² to £80.00 per m² and the VO has routinely adjusted the adopted rate for material factors. The properties in the scheme which have been valued at a base figure of £55.00 are quite disparate and the analyses of the assessments, agreed or otherwise, do not readily reveal the quantum of the adjustments made (if any) to arrive at the final assessments.

The properties I listed at paragraph [34] demonstrate that surprisingly, distance from a motorway junction does not appear to be a material valuation factor and a degree of adverse topography seems not to merit an adjustment. Notably, Comforts Place Farm has restricted access, but no allowance has been given. Given the range of building types, characteristics and locations I find this ‘one size fits all’ methodology quite problematic in analysis terms.

In paragraphs [28] and [29] I set out the four factors that Mr Marshall identified as worthy of adjustment, and having examined a representative selection of other properties valued on the tone, I am satisfied that they are not otherwise accounted for in the value determined by the VTE.

Turning to the comparables and Mr Marshall’s first factor I find some assistance in Drake Road Mitcham, where there are nine buildings and an agreed allowance of 12.5%. I am not assisted by comparisons with modern conjoined units because they have little in common with the Property. In that context Mr Ali’s allowance of 7.5% appears adequate and I therefore adopt his approach. That brings me to the sloping nature of the site.

There are two comparables with sloping sites; they are both in Godstone and confusingly they are occupied by the Godstone Highways Depot and Highways England. Neither has an identifiable allowance for adverse topography. I find some difficulty in reconciling Mr Ali’s justification of the allowance at Godstone Highways Depot as being just for the size of the site. I observe from the evidence that in addition to the slope, the site has an irregular shape, multiple buildings and a shared entrance. The lie of the land at Highways England is in my view less problematic than the situation at the property. For the topographical issues I deduct a further 2.5%.

The third factor is problematic access. Mr Marshall’s adoption of 10% included the topographical issues I have dealt with under the second factor, and he did not break his figure down between the two aspects. The evidence from Traditional Bespoke Furniture at Brenchley where the allowance is 10% just for access suggests that his approach is modest. I am mindful that at Dalma House in South Nutfield there was no allowance for access problems caused by low bridges. In my view 2.5% is adequate to reflect the relatively short nature of Quarry Road and the small numbers of vehicles using it.

The final factor is security. Mr Marshall correctly points out that the Property cannot be secured in the way that most occupiers would expect. He says that the 5% he has adopted is supported by the 5% allowance in the valuation of Unit 55, Hobbs Industrial Estate. I do not agree that the two are strictly comparable, but I concur with the quantum of his allowance.

The resultant valuation, adopting the agreed relativities for items such as lack of heating and Mr Ali’s allowance for floor levels in Warehouse 3-4, follows paragraph [53].

It is instructive at this point to revisit the rent agreed between the parties in 2011. I have no evidence to suggest that the letting in 2011 was not freely negotiated and all the disabilities at the Property should therefore be accounted for in the rent. I place no weight on the 2021 rent as it is too far removed from the AVD to be of assistance. The landlord did not initiate the 2016 rent review, but those circumstances would not have been known to the occupier at the AVD. I have no information as to why the review was not triggered but I observe that the Tribunal’s valuation appears reasonable in comparison to the 2011 rent adjusted on an in terms of rateable value basis. I therefore determine the assessment at rateable value £149,517 which I round to rateable value £149,500.