A PROPERTY tribunal has ruled a valuation of an East Lancs home for compulsory purchase purposes was £10,000 out.

Council surveyors in Burnley estimated that the true worth of the rundown 28 Spenser Street in Padiham was £60,000.

But Lloyds Bank had an outstanding mortgage - to an investor named as David Geoheghan - on the property for a little more than £80,000.

An Upper Tribunal of the Lands Chamber at the High Court heard Mr Geoghegan had rented the house out after securing a mortgage with Lloyds in March 2008.

But the court heard tenants had damaged the property - and after it fell further into disrepair it came to the attention of Burnley Council's empty homes team.

The court was told between late 2020 and mid-2021 the authority corresponded with Mr Geoghegan, who acknowledged the property's poor condition.

But he said he did not have the funds to repair it and discussions about funding remedial works came to nothing.

Council officers offered to buy the property but at a price which was less than the bank's outstanding mortgage.

Then in March 2022 the council decide to make a compulsory purchase order (CPO) and valued the house at £60,000.

Bank lawyers noted that another property in Spenser Street, albeit in good condition, had sold for £88,000 and a second, requiring repairs had gone for £73,500.

Tribunal surveyor Peter McCrea said: "In my judgment it is misleading to simply deduct the cost of refurbishment work (which the in seeking the CPO the authority put at around £35,000) from a refurbished value to arrive at a value in poor condition. The market seems more nuanced than that."

He added: "It appears that developer/landlords are prepared to spend time and effort refurbishing a property with a view to letting it, without the need to immediately cover their costs."

Mr McCrea said the best comparable valuation concerning 28 Spenser Street was the one for around £70,000 which required repairs.

He ruled: "I am satisfied on the evidence that the mortgagor has chosen not to participate in the negotiations or the reference. The bank had made a valid claim....I determine that compensation of £70,000, plus any statutory interest, should be paid to the bank in part satisfaction of the mortgage debt secured against the property."