Upper Tribunal signals increase in rents for rural telecoms sites

Under the Electronic Communications Code, telecoms operators can compulsorily acquire sites for telecoms apparatus and renew existing lease arrangements. The rents payable by operators for these sites are assessed on a "no network" basis - being the rent that would be payable on the open market for the site, if it was not being used for telecoms apparatus.

This is workable when a site has a clear alternative use which can be valued, such as a parking space or a room within a building. However, it makes valuation very difficult when there is no discrete alternative use (as is often the case for greenfield sites) and operators and landowners have tried creative ways to value such sites.

The Upper Tribunal has sought to simplify the valuation process. In early 2022, in EE Limited and H3G UK Limited v Affinity Water Limited, the Tribunal summarised previous Tribunal valuations, which would then act as a tonal indicator of rents for similar sites. This has been come to be known as the "Water Affinity Table".

This included rents of £600 for a rural site in an estate location, £750 for a standard greenfield site, and £1,200 for a rural site adjacent to housing. These values have dominated negotiations ever since, to the dismay of landowners bound to accept them.

However, in welcome news for landowners, the Upper Tribunal has now confirmed in EE Limited and H3G UK Limited v AP Wireless II (UK) Limited that these values need to be reassessed. It did so for two reasons:

1.  First, the values used in the Water Affinity Table were set in 2020 and need to be adjusted for inflation. At time of writing, this would result in figures closer to £800 for a rural estate, £1,000 for a standard greenfield site, or £1,600 for a rural site adjacent to housing.
2. Second, the Tribunal accepted that telecoms agreement do impose an additional burden on landowners which comparable agreements do not. For example, they confer significant security of tenure with long notice periods, they tend to be disruptive in terms of access and upgrading, and they come with associated rights of set down, tree lopping and so on. This should be reflected in the hypothetical negotiation between the parties.

As a result, the Tribunal concluded that the appropriate tonal rent for a rural mast site is now £1,750. This figure may then be adjusted to reflect special circumstances of a particular site.

This modest increase is unlikely to satisfy rural landowners on whom telecoms leases have been foisted, but it does reflect a willingness by the Tribunal to depart from the Affinity Water Table and to increase rents for rural sites to better reflect inflation and the true impact on landowners of telecoms masts on land.

If you are a rural landowner and would like advice on telecommunications apparatus on your land, please contact Philip Sheppard in our Real Estate team, or complete the form below.