Context

• London Borough of Newham had a requirement to dispose of 20 residential development sites to Populo Living and was required to demonstrate Best Consideration in line with Section 123 of the Local Government Act 1972.
• Local authorities have wide land disposal powers under sections 123 and 127 of the Local Government Act 1972 and section 233 of the Town and Country Planning Act 1990. However, they are required to seek specific consent from the secretary of state where the consideration is less than the best that can reasonably be obtained.
• We were instructed to assess whether there was any undervalue.

Our Approach

• Our team prepared Red Book Valuations on a residual basis. There would be an undervalue where the Unrestricted Value exceeds the proposed value of consideration or the Restricted Value (or Value of Consideration) plus the value of any Conditions.
• We considered the sites as a whole, taking into account the receipt of dividends and a margin on loan funding and a permitted undervalue where it can be demonstrated that the disposal will help to secure the improvement of the economic, social or environmental well-being of the area.

The Result

• The transfer of properties was approved by the London Borough of Newham and Populo Living.