Landowners unaware of pylon compensation owed

10th February 2015

New research by land and property specialists George F. White has revealed that landowners could be owed thousands in pylon damage and disturbance compensation.

The majority of electricity pylons are in place under a temporary right (a wayleave agreement) between the landowner and electricity distributor. The landowner in turn receives an annual payment which is deemed to reflect the detrimental impact to agricultural activities that pylons have by being on or over their land. However, electricity distributors may offer one-time only payments to obtain permanent rights to keep pylons on land which many landowners take without realising just how much extra compensation they’re entitled to.

Robert Moore, Rural Practice Surveyor at George F. White said: “Our research shows that, overall, the compensation amount payable should be much higher than the current amounts being issued for permanent rights. Electricity distributors often capitalise annual wayleave payments, meaning landowners receive a one-off imbursement that, as our research has revealed, is a lot less than what they should be getting.”

The research focused on a four mile stretch of pylons around a town in the North East of England and assessed seven registered land titles. It looked at how the land title as a whole was affected and, by understanding how the legislation works in practice, a compensation payment for the loss in value of the land was calculated to be much higher, rather than just capitalising annual payments alone.

The capitalisation method fails to explore the impact pylon apparatus has upon assets such as dwellings, leisure facilities, minerals and land with development potential. For example, one land title – with arable land, residential and commercial property – went from a probable payment of £15,697 using the capitalisation approach to a possible compensation payment of over £230,000 by assessing the diminution in value to the property assets.

Robert continued: “There is nothing within the legislation that states capitalising annual wayleave payments is the set way to assess compensation. By doing so, the landowner fails to benefit from being compensated for the actual loss in capital value and that includes failing to address the impact of pylons on residential and commercial property as well as development opportunities. In simple terms if there are two identical houses – one with a pylon in the garden and the other without – the one with the pylon is clearly going to be worth less. It is this loss in value which needs assessing.”

Robert added: “We urge landowners who are considering granting permanent rights to electricity distributors to consider very carefully whether the offer on the table is truly reflective of the loss in value to the property as once a permanent right is handed over and a compensation amount agreed, it’s too late to look back.”

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