£6 million differential in Lowood estate valuations

by DOUG COLLIE

Two specialists who were asked to provide valuations for the 94-acre Lowood country estate in the Central Borders provided estimates of £8 million and £14.25 million respectively, according to documents released by Scottish Borders Council under Freedom of Information.

The £8 million price tag, based on vacant possession, was applied by the District Valuer who was called in by SBC before council officers and their representatives opened negotiations to buy the property from the Hamilton family, owners of the attractive estate with a mansion house and several cottages.

A second valuation by DV Elin Herd which was subject to so-called special assumptions worked out at £9 million.Her newly released report, submitted to the council in May 2018 describes Lowood as "a high risk asset to purchase".

Meanwhile a separate exercise conducted on behalf of the sellers by private valuer Rob Forrest in October 2016 had calculated a valuation figure of £14.25 million.

Last December the local authority handed over £9.6 million to two Cayman Islands-based companies to acquire Lowood. When legal costs, loan charges and taxes are added the final bill totals almost £11 million.

For several months SBC refused to disclose the valuation figures because of a confidentiality agreement with the District Valuer's office. But a number of people lodged FOI requests for the information, claiming disclosure was very much in the public interest.

It has taken an intervention by the Scottish Information Commissioner to ensure the figures and reports are available for public scrutiny.

According to correspondence from SBC: "The Scottish Information Commissioner has contacted us to advise that it has discussed this matter with the Valuation Office Agency (the District Valuer). We are advised that the DV is content now for the valuation information to be released, provided it is not done so out of context.

"As you will appreciate the purchase of land by local authorities for economic growth, housing and business space is not an unusual activity and occurs throughout the country, whether by city deals, urban regeneration companies, business gateway activities or directly by the authorities themselves".

In this case the council intends building upwards of 300 houses on the Lowood land, the residences to become an extension of Tweedbank village. But there have already been claims the transaction is 'speculative and risky' given the limited housing market in the area and the environmental implications for the nearby River Tweed Site of Special Scientific Interest.

The DV's report explains: "The main objective for Lowood is to develop medium density residential accommodation with the housing being arranged in “clusters”. These will be defined residential neighbourhoods built on the site of young tree plantations and surrounded by the retained deciduous tree belts. Each “cluster” will have a small area of community space such as local retail, studios/workshops at its centre to provide a mixed use character to the development.

When the document was drawn up the site had an indicative capacity of 330 units. "However we have been advised that there is the potential for a substantial increase in this figure."

The report also claim that taking into consideration the scale of the subjects the DV did not consider that in the current market conditions there would be a purchaser prepared to acquire the site in its entirety without an allowance for substantial risk. 

"Rather we would anticipate that fully serviced and remediated development land would be disposed in tranches of c.4 acres over a period of 10 years. Sales in the order of 4 acres would in our opinion offer an appropriate level of development and absorption so as not to saturate the market with new housing.

"We are yet to see significant rises in property prices due to the presence of the railway but this may come in time once the issue with Brexit is settled and there is more economic certainty. Journey times from Tweedbank to Edinburgh Waverley are less than an hour and residents in any new housing at Lowood will only be a short walk from the station.

"The development of Lowood Estate will require substantial investment and there is a restricted market for large scale developments of this nature. There are few developers who would wish to acquire such a quantity of land in one tranche, tying up capital for several years and with all the required infrastructure costs. This is a high risk asset to purchase."