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Windfalls from Wayleaves

Capitalising wayleave payments and claiming  compensation for property depreciation caused by power line infrastructure could provide a much-needed capital injection for  farmers and landowners.

Usually, wayleave agreements provide an annual payment to cover rent and loss of farm profit.  No allowance is made for the impact such structures can have on property values, says Ashley Dodgson, of the Land & Property Specialists GSC Grays.

However, landowners can serve notice to terminate the agreement.  Usually, this means the electricity supplier will ask the Department for Trade and Industry to issue a necessary wayleave to avoid re-routing its lines.

However, this is only used as a last resort.  It is usual for both parties to enter into negotiations, and for a formal Deed of Easement to be granted, with compensation terms agreed as part of this procedure.

“Reduction of property values depends on the proximity of the power lines and apparatus to farm houses, cottages and farm buildings,” says Mr Dodgson.  “Typically, one can look at a 5-20% reduction to capital value.”

In addition, a permanent easement should create a one-off payment worth 20 times the annual wayleave payment.  “For example, an owner-occupier with a 16.8 m tower situated in an arable field would receive approximately £2743.80 in compensation.”

Other claims may include loss of amenity or sporting rights and reduced productivity due to restrictions on irrigation or buildings with development potential, he adds.  “We have secured some significant payments for clients”.

However, by capitalising wayleave payments  landowners, and their successors, forego the right to future receipts, warns Mr Dodgson.  “But this does not preclude the right to receive payments for additional equipment.”

Nevertheless, farmers should consult their  accountant before entering a permanent easement to assess tax implications and to consider the impact of loss of future wayleave payments on property values, he says.

BT wayleave payments can also be capitalised.  And farmers should check they are being paid for new fibre-optic cable installations crossing their land, which can be worth up to 39.5p/m says Mr Dodgson.

For further details please contact Ashley Dodgson at the GSC Grays Stokesley office on tel: 01642 710742.

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