Valuation Office Agency
1.1 London Congestion Charge - the creation of the Congestion Charge Zone has resulted in the physical presence of signs, cameras etc and may also be physically manifest by an observable reduction in traffic. There is a clear link from these to the cause - they tell you there has been a legislative change. The situation is analogous to an order preventing traffic going down a road. The valuer therefore needs to envisage the existence of the Congestion Charge Zone at the AVD and consider what the consequences, if any, the imposition of an access charge would have on values. A subsequent increase in charge would not be physically manifest and thus not an MCC - but a physical extension to the zone would be.
2.1 London terrorist bombings 7 July 2005 - the effect of the London terrorist bombings on the propensity of people to travel within, come to London and to shop may be physically manifest by a reduction of footfall in shopping streets or noticeably less crowded tube trains. However there are no observable physical changes to the locality or setting of the hereditaments to be valued. The physically manifest changes in activity do not have a direct and immediately obvious to the eye cause and can only be associated with what are really attitude factors. Therefore the physical manifestations of reduced footfall etc should be envisaged as existing at the AVD but, divorced from the underlying economic and public perception causes, will not persist in the AVDs economic climate.
3.1 World Trade Center see the approach set out in paragraph 13.27 of RM2:7.
3.2 The New York World Trade Center was very clearly not within the locality of, for example, New Bond Street shops or hotels in London. Its destruction is, therefore, not a physical change to the locality. It is difficult to conceive that there were any physical changes in the locality of these properties as a result of the destruction of the WTC but if there were then these physical changes should be taken to have already occurred by the AVD.
3.3 The consequence of the destruction of the WTC was actually a public attitude shift both in the USA and in the UK (a non-physical cause). Any consequent footfall reduction taken back to the AVD should be viewed as unlikely to persist in the AVD world and therefore be disregarded.
3.4 For these reasons, the settled assessments for certain London hotels based upon observable reductions in taxis and people arriving at other hotels in the locality made prior to the clarification in this section of the Rating Manual should not be followed. Whilst the physical manifestation should be taken back to the AVD, there is no assumption of a frozen state and the prospective landlord and tenant standing outside one of the hotels to be valued at the 2000 AVD (1 April 1998) would expect, given AVD demand, attitude and the economic setting that guest numbers would quickly return to expected AVD levels and would make no allowance in their rental agreement. Whilst there will inevitably be some unfairness, because of the date restrictions on 2000 list alterations it is now not possible to correct the reductions. VOs should not regard themselves bound by the earlier agreements nor is it a matter of VOs impugning their lists. Agreements made on an incorrect legal basis do not create a tone.
3.5 In Re The appeal of Kendrick (VO) 2009 the Lands Tribunal said the VT appeared to have treated the events of 11 September as a matter that was physically manifest. It said this was not possible because it was a past happening, not a matter existing on the material day. While past events could not constitute matters for this purpose, it could see that the consequences of such events, if they endured at the material day, could be said to do so. Thus the attitude of air passengers to air travel as the result of the events of 11 September could, it was prepared to accept, qualify as a sub-paragraph (7)(d) matter, provided, of course, that it was physically manifest in the locality of the hereditament. It found, however, that this attitude was not physically manifest because it was masked by a number of other factors all affecting the footfall and numbers of aeroplane movements.
4.1 Speed restriction on Lake Windermere - The local authority has imposed a 10mph restriction on boats on Lake Windermere in Cumbria. Whilst the consequence might have been thought desirable to the majority - a reduction in noise and an increase in tranquillity - local businesspeople have noticed a reduction in trade as a wealthy and prone to spend segment of visitors, the power boat fraternity, have departed. The change is physically manifest - greater tranquillity and no fast moving boats on the water - and its cause is direct, i.e. the speed restriction. Any rating proposals should be considered on the basis that the speed restriction was in force at the AVD and the lake was more tranquil.
5.1 Foot and Mouth Disease Outbreak 2001 - Valuation officers accepted that the outbreak of FMD in 2001 was a MCC. The disease as such was physically present in many localities, physical signs were present on footpaths etc and in some areas carcass pyres and graves were physically observable and manifest. The cause would have been clear to the hypothetical landlord and prospective tenant standing outside a hereditament. A and D notices to stop businesses trading together with the orders closing footpaths etc were legal matters affecting the physical enjoyment of properties.
6.1 Olympic Bid - On 6 July 2006 the International Olympic Committee announced that London would again host the Games: this time in 2012. The announcement itself is not a MCC being similar to the draft compulsory order announcement in Prodorite or the creation of the enterprise zone in Addis. As with other MCCs it is necessary to show there has been a value significant MCC within the paragraphs of Schedule 6 para 2 (7).
6.2 The announcement itself did not affect the physical state of the locality or the use and occupation of premises in the locality. It is not in itself something covered by Schedule 6 para 2(7). It is difficult to see any banners advertising the bid as manifesting the outcome or indeed having a valuation significant effect given, at the AVD, the Games would be nine years away.
6.3 As re-development, vacation of premises, redevelopment etc occurs there will be physical changes to the locality which will constitute MCCs. These should be considered in the normal way as with any other redevelopment scheme. So if dwellings previously served by a corner shop are demolished then it may well be that the rental value of the shop would have been less at the AVD had the dwellings been demolished by the AVD.
7.1 Smoking Ban - From 2 April 2007 in Wales and 1 July 2007 in England a complete ban on smoking in enclosed public places came into force. The regulations under the Health Act 2006 make it against the law to smoke in virtually all enclosed and substantially enclosed (as defined) public places, workplaces and work vehicles. This includes permanent and temporary structures such as tents and marquees. The law applies to anything that can be smoked including water pipes (such as hookah pipes) and herbal cigarettes. Managers of smoke free premises have legal responsibilities to prevent smoking and ensure no-smoking signs are displayed. These signs must be a minimum of A5 size and must be displayed in a prominent position at every entrance to the smoke free premises. The sign must contain the international no-smoking symbol at least 70mm in diameter and carry the following words No Smoking. It is against the law to smoke in these premises. It is the local councils who are responsible for enforcing this new law.
7.2 Anticipating the ban a number of publicans erected, and have continued to erect, external shelters to allow drinkers to smoke legally whilst enjoying their drink but protected from the weather. Various designs are available on the market to order ranging from basic bus shelter like metal structures to quite elaborate timber designs. Heaters and flat screen TVs can be features.
7.3 Whilst the erection of a shelter was always considered by CEO (Rating) as likely to constitute a MCC as it represents a change in the matters affecting the physical state of the property, it was not considered that this change in the law could constitute a MCC and earlier versions of this advice reflected this. Advice from counsel now shows this view to be wrong and that the ban on smoking can be a matter affecting the physical enjoyment of a hereditament. In other words, how it can physically be used beneficially.
7.4 A change in the law which prevents the use of premises in a particular way, e.g. because it prevents people from firing handguns (in a gun club) or serving alcohol, or extends the use that can be made of premises, e.g. permitting the serving of alcohol on Sundays or for extended hours, is something that affects the physical enjoyment of those premises. Smoking is an activity undertaken by customers at Bingo Clubs, Public Houses, Members Clubs and many other hereditaments including offices.
7.5 The previous CEO advice was that the ban does not represent a matter affecting the physical enjoyment of the public house because it can still be physically enjoyed as a public house. Smoking being merely an incidental activity by customers and not something which went to the heart of the beneficial use of a public house which would be the sale of alcohol for consumption on the premises. However counsel advises that this is not the test.
7.6 The test is whether there has been a change to matters affecting the physical acti