Council valuer did not inspect Lowood estate before £9.6 million deal

by DOUGLAS SHEPHERD

The public official who provided Scottish Borders Council with two valuations for the Lowood country estate, near Melrose, did not inspect the property before deciding it was worth either £8 million with vacant possession or £9 million with "special assumptions".

District Valuer Erin Herd also gleaned her factual information about the 94-acre estate from a previous valuation exercise, conducted for Lowood's owners in 2016 and which placed a £14.425 million price tag on the Hamilton family's estate.

The local authority ended up paying £9.6 million for the estate in December last year, and when fees, taxes and loan charges are added the total bill for taxpayers will total almost £11 million.

The decision to rely on a so-called "desk-top" valuation - a value calculated on restricted information - is contained in the newly published reports from Ms Herd and from private valuer Rob Forrest, released by the council under Freedom of Information.

It has also been disclosed that Mr Forrest concluded the available land for housing development when woodland and low lying areas susceptible to flooding were eliminated could be 37.48 acres while the council's own Masterplan for the area quoted a figure of 52.4 acres.

Mr Forrest concedes that the 37.48 acres quoted could change in a positive or negative direction depending on the outcome of detailed surveys.

He explains in his 37-page report dated October 2016 that he had been instructed to undertake a valuation of Lowood for the potential sale to SBC for strategic development to create approximately 300 new houses on greenfield land, and an enterprise centre within Lowood House.

His valuation did not contain information in respect of site servicing, access, land contamination or geotechnical surveys.. He adds: "Only Lowood House was inspected internally, and it is therefore assumed that all of the other [eight] properties are in good condition".

Commenting on the type and scale of housing development at Lowood before the council Masterplan was unveiled, Mr Forrest wrote: "It is considered that an appropriate planning density for the net developable area at Lowood is in the order of 20 units/hectare, thus 304 units in total and in accordance with Scottish Planning Policy it is probable that 25 per cent would require to be affordable housing. This equates to 228 prime residential units and 76 affordable units".

The valuation report for Lowood's owners also contains the following passage: "The residential development market remains relatively static within the Borders with only a small number of developments being built out at present.

"Developers remain cautious and are generally concentrating on developing out existing land banks before acquiring new sites. However medium to large strategic development requires years of planning and the new settlement of Tweedbank is testament to this. The benefits of the new railway link are already evident and further prosperity and growth forecast".

In the document provided for SBC and dated May 2018 Ms Herd says: "I have been provided with a copy of the valuation report carried out by Rob Forrest Rural in October 2016 and have relied on this for my factual information on the estate".

The report adds: "As agreed the property has not been inspected. The advice and valuation has been prepared on a desk-top basis - i.e. it is provided on the basis of restricted information. No detailed site survey, building survey or inspection of covered, unexposed or inaccessible parts of the property were undertaken. It has been assumed good title can be shown".

Ms Herd also says the site currently has an indicative capacity of 330 units, "however we have been advised that there is the potential for a substantial increase in this figure".

With reference to the council's plan to convert Lowood House into a so-called boutique hotel, the DV comments: "This is a risky project as it is debatable on the very limited information that we have on whether the finished hotel would be worth the cost of refurbishment".

It is explained that it was the council who approached Lowood's owners and offered to purchase the estate as a whole.

"The owners are also keen to sell to the council rather than dispose of various areas of land piecemeal over several years and more".