Affects on Residential Property Value as a
Consequence of Telecom Instalations

This is a difficult area to give definitive advise on, like all developments that have an actual or perceived health effect linked to them then there is an adverse effect upon property prices, particularly in the stage up to the permission being granted when the uncertainty of whether the development is to proceed is unsure. Desirability of the property in question, or the locality can also affect the potential resell value of a property. It all comes down at the end of the day to the willingness of a potential new owner purchasing the property at the price that is being asked. Perhaps that is stating the obvious, but it is a very important aspect as whilst we have horror stories of homes being unable to be sold at any price, we equally have situations where the fact a mast exists has made no difference to the ability to sell a home, even where that mast is seen locally as being controversial.

The nearest we can get to putting any estimate to the potential loss in value is from homes that are close to other similar developments such as High Powered Cables and Incinerators. An easy start is to assume that a potential loss is likely to be in the region of 20% to 30% of its pre development value. But as we say there are many other competing factors such as the desirability of the home, the availability of homes within an area, as well as the type of dwelling, if the property is likely to be seen as a family home then that might attract a greater discount than say a student home, due to the reluctance of parents to place their off spring in any form of danger, real or perceived.

In a recent court judgement concerning a wind farm development District Judge Michael Buckley said that the noise, visual intrusion and flickering of light through the blades of turbines reduced the value of a house by a fifth. He said that the value of a remote house in Marton, in the Lake District, fell significantly because of the construction of a wind farm of seven 40m-high turbines 500 metres away. "The effect is significant and it has a significant effect on the property" he said. "It is an incursion into the countryside. It ruins the peace". We have to turn to cases such as this due to the lack of any precedents specifically affecting telecom installations.

Irrespective of the merits of a case if the planning regime has fully considered the case, it is unlikely that the courts would overturn a case due to a mere infringement of the rights under Article 8 of the European Convention on Human Rights (right to enjoyment of property), due in the main also for the need of the courts to protect the interests of the land owner to be free to develop his land, least those same Article 8 rights are breached. For a case relating to the deminition in value of property where Article 8 was the only issue in question see Lough & Anor v First Secretary of State & Anor [2004] EWCA Civ 905 (12 July 2004). Similarly where there is a statutory scheme of protection, even when without that scheme a clear violation of a right had occurred, including actual damage to a persons property then a claim could not be made out outside of that scheme, see Marcic v Thames Water Utilities Ltd.

Insurance is now available against the potential for adverse developments including telecom masts close to residential property. The insurance premium is £12 per month for 25% of the properties value up to a maximum of £100,000 plus removal expenses, being the projected difference in the before and after value of the property affected by the development. The insured must sell their home and move. Whilst the policy would be of little benefit to anyone already affected by a development, the conditions being that it the policy must be taken out within 13 weeks of the person moving into the new property, and a declaration must be signed that they are not aware of any adverse developments that are likely to affect the policy at the time of taking out the insurance. This is further evidence of the acceptance of inappropriate developments affecting residential property values. Information on the scheme can be obtained from Lucas, Fettes & Partners 0207 413 0999.

We only have one known case where compensation was directly assessed and compensation paid in relation to a telecommunication installation, and that was as a direct consequence of a finding of maladministration by the Ombudsman where the Swindon local planning authority had failed to notify the applicant within the statutory 56 day period (telecom developments) that prior approval was required, this resulted in an estimated drop in value of the 4 affected houses of £117,500.00, which the council had to pay to the local residents. The Court of Appeal found in Nunn, R (on the application of) v First Secretary of State & Ors [2005] EWCA Civ 101 that the only course open to a failure of a local planning authority to abode by the rules and as a consequence development concent was granted by default which would otherwise have been refused was to make an applicaton for damages against the local planning authority in the County Court under Section 6 of the Human Rights Act, or in the alternative to make a complaint to the Ombudsman.

It is said that altering the status of the main highway to intensive road use near to a house will tend to have a short term impact on value, and commonley one finds with District Valuers for compensation cases, the degree of settlement would be in the range of 5% - 10%. The situation of a pylon, be it supporting electricity or telecommunications antenna, is certainly a more significant event because there is uncertainty as to the potential which these masts may have upon health issues. Further, because the masts, being single site locations, tend to affect a small number of properties, it is easier for purchasers to avoid those houses and seek alternative but similar property nearby. Impact on value is therefore greater than for highway developments.

From all the evidence that we have our best estimate to be taken purely as a general proposition, with each affected property requring an individual assessment of any depreciation in value, taking into account the market position and local circumstances at the time of the potential sale, is that the average property is likely to drop by between 20% to 25% where the property is within 100 metres of a telecommunication installation or of a high powered cable network installation. Naturally the depreciation will then fall away with the distance from the phone mast. It must also though be considered that the 100 metres mentioned is not definitive but illustrative, some cases may dictate that installation 500 or more metres distant from the installation are having negative impact on property prices.

We also need to look at the question of depreciation in relation to such aspects blight, revocation of permission and discontinuance of use, as well as compulsory purchase of land, all of which give indicators of property loss. First it must be appreciated that proprty value in it self is not a material planning consideration, however, loss in amenity value is, the drop in value can in that respect act as an indicator of a negative effect upon amenity and therefore by a round about route be a material consideration. Secondly it should also be appreciated that there are only a limited number of developmet types where compensation can be paid, whilst some are statutory such as blight and Code 16 of the Electronic Communication Code, whilst others only come into being where a public authority makes a mistake and therefore opens up a challenge at common law, or Section 6 of the HRA.

Evidence of a drop in value would be prima facia evidence of a negative effect on amenity (quality of life) for existing residents, this would be argued in either the local authority determination or at an inquiry, providing it is argued as just that supporting evidence of loss in amenity and not a complaint of a drop in your own property value.

Blight is where compensation is payable due to the negative effect of public authority development proposals. Whilst we do not deal with the question of blight in this paper it is a good indicator of potential loss in value, the starting point for such investigation is the Lands Tribunal which has decision letters and other indicators of how the assessment of a loss in value is arrived at. There are other areas where land is devalued most of these are also dealt with by the Land Tribunal.

To put the problems of compensation into context the statement by Lord Justice Carnworth in Waters & Ors v Welsh Development Agency [2002] EWCA Civ 924 which relates to compulsory purchase says it all:-

"The right to compensation for compulsory acquisition is a basic property right. It is unfortunate that ascertaining the rules upon which compensation is to be assessed can involve such a tortuous journey, through obscure statutes and apparently conflicting case law, as has been necessary in this case. There can be few stronger candidates on the statute book for urgent reform, or simple repeal, than section 6 of and Schedule 1 to the [Land Compensation Act 1961]."

If a court of Appeal judge finds it so daunting how are we lesser mortals expected to fair, nevertheless as his opening comments states where there is a right to compensation it is a basic right, in other words an absolute right, subject only to incomprehensible rules that surround the multitude of provisions.