An increase to the budget for compensation related to rights of light for the Plashet Road development was approved. This decision was made by Paul Kitson, Corporate Director of Inclusive Economy & Housing.

Plashet Road Compensation Budget Increase

The meeting approved an increase to the budget for compensation payments concerning rights of light for the Plashet Road development. This decision, made by Paul Kitson, Corporate Director of Inclusive Economy & Housing, will see the total budget for these payments, including legal and surveyor fees, and a contingency sum, rise to £845,400.

The original budget for rights of light compensation was set in a non-key decision report signed on 22 May 2023. However, subsequent studies and the emergence of new claims have necessitated a revised budget. The initial studies by the Right of Light consultant were provisional, based on desktop research and external observation. Following physical inspections, it was identified that seventeen properties were affected by the development. Of these, eleven have submitted validated claims.

The compensation is calculated based on a formula that considers the extent of light loss, likely rent, and applicable yield. The recommended compensation is between three to five times the amount of light loss. The revised budget includes £216,828 and £361,400 for compensation payments, representing three and five times the book value respectively. In addition to compensation, the budget now includes £204,000 for legal and surveyor fees for each property with a validated claim. A contingency budget of £280,000 has also been approved to cover any unforeseen future claims.

The report noted that alternative options, such as obtaining rights of light indemnity insurance, were considered but deemed not financially viable due to high excess and unacceptable terms. The Deed of Release route, which involves securing agreements with affected owners, was recommended by the council's consultants, legal, and insurance teams.

The financial implications of this decision will be contained within the overall Housing Revenue Account (HRA) Affordable Homes for Newham programme budget. The expenditure is estimated to be £395,400 in the financial year 2024/25 and £450,000 in 2025/26. The council's authority to override land rights for planning purposes is derived from Section 203 of the Housing and Planning Act 2016¹.