This case study is based on a real instruction. Names, addresses and identifying details have been changed, and figures rounded, to protect client confidentiality.

The instruction

A private landlord owned a two-bedroom flat in South London, let on an assured shorthold tenancy at £1,650 per calendar month. The building fell within a regeneration scheme promoted by a housing association acting as acquiring authority.

He was offered £285,000, described as “market value in its tenanted state”. He had bought the flat fifteen years earlier as part of a small portfolio and had no intention of selling.

Investors are compensated differently — and often less well advised

Owner-occupiers receive a good deal of attention in compulsory purchase, and rightly so. Investors are frequently left to work it out for themselves, and the differences matter:

• No home loss payment. That 10% payment is for people displaced from their own home.
• Basic loss payment instead. Under sections 33A–33K of the Land Compensation Act 1973, a person with a qualifying interest held for at least one year receives 7.5% of the value of that interest, subject to a statutory cap.
• Different disturbance profile. An investor’s losses are commercial: void periods, re-letting costs, the transaction costs of reinvestment, and — critically — the stamp duty on a replacement investment property, which for an additional dwelling is charged at the higher rates.

Note also that sections 33A–33K were amended by section 110 of the Planning and Infrastructure Act 2025, with the changes applying where notice of the making of the compulsory purchase order was published on or after 18 February 2026. The qualifying conditions and the measurement basis for floor space differ between older and newer schemes, so the date of the scheme matters.

The valuation argument

The authority had valued the flat as a tenanted investment, applying a discount to vacant possession value on the basis that a purchaser would inherit the tenancy. That approach was wrong on these facts.

The tenancy was a periodic assured shorthold. The owner could have brought it to an end on notice and sold with vacant possession, and in this location a flat of this type sells to owner-occupiers, not to investors — the vacant possession market was demonstrably deeper and priced higher. The correct question is not “what is it worth as it stands today”, but “what would a prudent owner have realised on the open market in the no-scheme world”.

We evidenced vacant possession sales of comparable flats outside the scheme’s influence, and deducted only the costs and void period a purchaser would allow for obtaining possession.

The outcome

Settled at £350,200, an uplift of £65,200 on the opening offer, of which £27,000 came from the market value argument alone. Our fees were recovered from the acquiring authority.

We also advised on the timing of the replacement purchase. Disturbance is only recoverable where the loss flows naturally from the acquisition and the claimant has acted reasonably to mitigate. Buying a replacement before the compensation position was agreed would have weakened the claim; buying too long afterwards would have raised questions about causation.

What landlords should watch for

• “Tenanted value” is not automatically the right basis. Where vacant possession could reasonably have been obtained and the vacant possession market is stronger, that should be reflected.
• Ask about the basic loss payment. It is not always volunteered. 7.5% of a £312,000 interest is £23,400.
• Higher-rate SDLT is a real loss. On a replacement investment property the surcharge is substantial and forms part of a properly presented disturbance claim.
• Keep the tenancy documentation. Rent records, the tenancy agreement and any correspondence about possession all bear on the valuation basis.

Frequently asked questions

Do landlords get a home loss payment under a CPO?

No. The home loss payment applies to owner-occupiers displaced from their own home. Landlords and other investors with a qualifying interest held for at least a year receive a basic loss payment of 7.5% of the value of the interest, subject to a statutory maximum.

Is a tenanted flat worth less under compulsory purchase?

Not necessarily. The valuation should reflect what a prudent owner would have realised on the open market in the absence of the scheme. Where the tenancy could reasonably have been ended and the vacant possession market is stronger, valuing the property purely as a tenanted investment will understate the compensation.

Can I claim the stamp duty on a replacement investment property?

Yes, in principle. SDLT on a reasonable replacement is a loss caused by the acquisition and is recoverable as disturbance. For an additional dwelling the higher rates apply, which makes this one of the larger disturbance items in an investor’s claim.

Own an investment property affected by a scheme?

Blakes Chartered Surveyors act for landlords and investors in compulsory purchase across London and the South East. We prepare the valuation report, identify every recoverable head of claim, and negotiate directly with the acquiring authority’s surveyors — normally at their cost, not yours.

Call 020 7373 7373 or email info@blakessurveyors.com.