What is a ransom strip and why are they important?

What is a ransom strip?

A ransom strip consists of land which is not controlled or owned by a Developer whose use is essential for access or services to land intended for development. Often, a so-called ransom strip can be a substantial area of land (which can be introduced to form part of the development) and is not necessarily just a stand-alone means of providing suitable access or services for the development by others. The essential ingredient that makes it a ransom strip is that the owner holds (and can withhold) the ability to develop land owned by someone else. The ransom owner is the enabler.

How do ransom strips become important?

In most instances, it is the scale, location and nature of development that determines whether a land owner is dependent upon the co-operation of a third party. Typically, this arises where:

• neighbouring land adjacent to the public highway is required for suitable quality access,
• existing access fails to meet the technical requirements of the highways authority,
• existing restrictions (restrictive covenants) prevent change or intensification of use,
• existing easements are insufficient for the proposed use, and/or wayleaves and rights of third parties are incapable of termination without negotiation.

How is the value of a ransom strip worked out?

There is nearly always enhanced value to be realised by the ransom owner. At the maximum, there is case law that suggests a fair percentage might reach one third of the increase in value to the developing land. However this is often an elusive outcome because the mechanical criteria for the assessment of value suggested by established case law, is secondary in importance to numerous practical factors - the balance of convenience and advantage, the timing of the emergence of your land as a ransom as well as issues relating to comparable land values and development viability.

Must the private owner of a ransom land agree to grant access or other rights over it?

In almost every case, there is no element of compulsion. Exceptionally, statutory undertakers have limited rights in particular circumstances, to lay pipes and cables without your agreement, and local authorities must show a compelling case in the public interest to justify compulsory purchase.

What to consider if you are considering development on or purchasing land to develop?

Securing the appropriate value for your land - recognising both development and/or enabling qualities – is a specialist business and requires both specialist legal knowledge and professional involvement of chartered surveyors with suitable development experience.

You should always enlist professional legal and surveying help and guidance negotiating ransom values. 

We work regularly with many of the most experienced surveyors and consultants and will be happy to recommend suitable advisors to you. 

If you would like to discuss possible development plans and options, or would like a helpful referral to specialist commercial agents and surveyors, please do not hesitate to contact Robin at Robin.Cole@blanchardsbailey.co.uk or 01258 459361.