Take a minute to ponder the real implications of pylons striding across your farmland

23rd February 2015

Just sit for a minute, and imagine the countryside without large electricity pylons. No awkward obstacles in the middle of fields. No low overhead lines obstructing farming practices, or sporting activities. No view affected from the farmhouse window, or no development land sterilised by their presence.

Now, sit for a further minute, and think about the real situation with the pylons in place, and ask yourself what impact the presence of those pylons are having on your farming business and then think about their impact on your property’s value.

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 land. However, electricity distributors may offer one-time only payments to obtain permanent rights which many landowners take without considering the true diminution in value to their freehold the presence of pylons have.

Our research department has just published a study which focused on a four mile stretch of pylons and assessed the impact on value the pylons had on seven registered land titles. The study looked at how the land title as a whole is affected, with an understanding on how the electricity legislation works in practice and a compensation payment reflecting the loss in value to the asset base was calculated. The study shows that overall; the diminution in value to the freehold is 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 a landowner should be entitled to.

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.

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.

I would 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. If a permanent right has already been granted, look at the terms and see what they relate to and whether they are for a specified time, as you may be able to review these in the future.

So next time you have a minute, you may like to sit and think about the real implication those pylons passing across your property are having on your asset base.

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