Sir John Bourn, head of the National Audit Office, reported to Parliament today on the extent to which the Highways Agency has obtained best value for the taxpayer on the disposal of property acquired in connection with road construction. Since the Agency was created in 1994, it has raised £238 million (at 1999 prices) from the sale of 3,300 properties in England. Disposals peaked at £65 million in 1997-98. In March 1999, the Highways Agency held around 2,650 properties and pieces of land.
On average, properties owned by the Agency lose 32 per cent of their value before disposal
- The law requires the Agency to acquire property at its unblighted, open market value. On disposal, the Highways Agency obtained on average 68 per cent of the price it had paid for the properties, after taking inflation into account; a loss in value of 32 per cent.
- For properties disposed of because they were affected by a road scheme but not needed for construction, the average loss in value was 42 per cent, partly reflecting the actual impairment caused by the presence of the new road.
- Around three quarters of recent disposals have been the result of road scheme cancellations, where the threat of roadbuilding and the consequent blight will have been lifted in many, but not necessarily all cases. For these properties the average fall in value was still 27 per cent.
- The loss in value tended to increase with the length of time that properties had been held by the Agency. Properties sold within one year of acquisition sold for around 19 per cent less than the acquisition price, with this loss rising to around 37 per cent after ten years.