There is often a difference between the market value of land and the value placed on that land by its owner. The market value of land is the value that would be paid by a willing buyer to a willing seller. This is not necessarily the value which would be placed on land by the owner when, for example, it is subject to a compulsory purchase order.
When the market value and the value to the owner differ because of the value attaching to the land on account of its current use, this is termed ‘special value’. The normal circumstance in which special value is claimed is when there is a business on the land which has a significant relationship with it – typically where the owner has made an investment in the land on which the business is carried out.
Recently, the court addressed the question of whether compensation should be payable for the special value of land to be used for a business, if the business was to be carried on with a view to profit but had not yet commenced to trade on the land. In the case in point, the owner of the land had made infrastructure investments in it and had commenced work in connection with the proposed business, but the business itself had not commenced trading.
In the view of the court, once the investment in the land in pursuit of the business had been made, the fact that the business had not yet started to use the land did not prevent it from having a value over and above the normal market value.