Capitalise on wayleaves

By Robert Harris

CAPITALISING wayleave payments and claiming compensation for property depreciation caused by power lines could provide a much-needed capital injection for struggling farm businesses.

Usually, wayleave agreements provide an annual payment to cover rent and loss of farm profit.

But no allowance is made for the impact such structures can have on property values, says Ashley Dodgson, of national property consultant Carter Jonas.

To account for this, farmers can serve notice to terminate the agreement.

It is then usual for the landowner and electricity supplier to negotiate a formal deed of easement, with compensation terms agreed as part of this.

“Reduction of property values depends on the proximity of the power lines and apparatus to houses and farm buildings,” says Mr Dodgson.

“Typically, one can look at a 3-15% reduction.”

In addition, a permanent easement should create a one-off payment worth 20 times the annual wayleave payment.

Other claims may include loss of amenity or sporting rights and reduced productivity due to restrictions on irrigation or buildings with development potential, he adds.

Nevertheless, farmers should consult their accountant before entering a permanent easement to assess tax implications and to consider the impact of loss of future wayleave payments on property values, he says.