The increased popularity of enfranchisement, coupled with increasing property values, has led to an increase in focus on the detail of the valuation calculations. In particular, there has been an argument on the calculation of the appropriate ‘deferment rate’. This is basically the yearly rate of return that a buyer of the reversion would be looking to achieve on the investment. Because the reversion often needs to be discounted over a long period of time (ie the duration of an existing lease) small changes in the deferment rate can cause large changes in the final figure (eg in one case a deferment rate of 6% gave a value of £1.3m; a 5% deferment rate increased the value of the reversion to £2.3m). In Sportelli [2006] the Lands Tribunal pleased many Ls by laying down a nationwide deferment rate of 4.75% or 5% (lower than previously expected – thus benefiting Ls). The effect of this was probably to transfer billions of pounds out of the hands of Ts and put it in the hands of Ls. What was particularly important was that the LT said that these should be guideline figures across the whole country and not just in London (even though the deferment rate is just one component of a factual valuation, and is therefore surely affected by local conditions). Now, however, Sportelli has gone to the CA which has agreed with 4.75% (for houses) and 5% (for flats). But, the CA disagreed with the suggestion that there should be no distinction between prime Central London and other parts of the country, although the LT’s figures should be the starting point. Potentially, therefore, this opens the way for higher rates in other parts of the country. But, in practice that is likely to be difficult to achieve since it will be very difficult for either party to produce evidence of long-term regional variations in the various factors taken on board by the LT (and, indeed, an article in the SJ says ‘it is difficult to think of what evidence might usefully be called’). In practice, therefore, deferment rates of 4.75% and 5% are likely to be applied nationwide. Earl Cadogan v Sportelli [2007] EWCA Civ 1042 discussed in [2007] SJ 1418. © Practical Lawyer