Testing rateable values by comparison with rents paid to Corporations

The composition of the “Old Corporation” and the Borough Council are dealt with separately: see Corporations. This page deals with the land and buildings held by those two bodies. Most corporation property consisted of land and buildings, including some land outside Louth. Very little of this property was occupied by the Corporation itself; most was leased to provide income. Since the Corporation never died, it could afford to take the long term view and some of the leases were for 99 years or even longer.

The three rating lists constitute good sources of information about Corporation property but can be supplemented by: (a) the survey referred to here as Espin 1817, (b) the town clerk’s report on property in 1836 (Paddison 1836), (c) various minutes and rent records, (d) the lists of property contained in the schedules to the Compromise Act and (e) some press reports.

Old Corporation Minutes and Accounts

Minutes of the Old Corporation survive for the period up to 1835 but are somewhat sparse. They sometimes give useful information about property but certainly do not record all transactions.

For some years there are “rentals” ie accounts showing rents due from tenants and the amounts paid. Separate rentals were compiled for the Corporation’s general property (“Queen Elizabeth’s Rental”) and the property held for the support of the grammar school and bedehouses (“King Edward’s Rental”). An initially confusing feature of the rentals is that they included manorial rents of various types. These were survivals of medieval law under which the owner of what came to be regarded as freehold land had to pay rent to the lord of the manor (ie in Louth the Corporation), usually in money but occasionally in goods (eg two fat hens annually for a house in Maiden Row). The important feature of these manorial rents was that they could not be increased. As most had been fixed at dates in the remote past, the rent payable were very small, often only a few pence a year. They were of no economic significance and were not included in the rating lists.

Espin 1817

Thomas Espin (Louth’s first real cartographer) carried out a limited survey of Corporation property in 1817. He was paid 25 guineas for the work.¹ The survey is particularly useful in identifying agricultural land, for which there were given the names of the fields, their areas and the then tenants, but not the rents paid. Espin’s measured areas often allow his plots to be matched with those found in the rating lists and other documents. Unfortunately his field names are of little use: in other documents the same names were used for different fields and different names were used for the same fields. A numbering system included in Espin’s survey was used subsequently in the accounts but not in the minutes. The fields shown on Espin’s plans can sometimes be equated with the Ordnance Survey plots that first appeared with the 25 inch OS plans published in 1889. The comparison shows that Espin was a good surveyor, but not quite up to OS standards.

Espin’s survey listed 109 items of Corporation property and gave the names of most of the tenants. The pieces of the Corporation’s land in Louth with stated acreages had a total area of 235.73 acres; this figure includes three small fields not totalled by Espin, and not shown on his plans, and excludes 5.01 acres that was “part of Claypit or Monks’ Dike Close in ming with Mary Hutton”.² Not all of Espin’s acreages coincide with those in R1823; some fields were divided and others amalgamated; and there are other discrepancies that may be due to boundary changes. Some of the small plots recorded by Espin are not identifiable in R1823. Most of the items in Espin 1817 had no stated acreage and some of the Corporation’s real property was only vaguely described by Espin; for example we see in Mercer Row “Houses shops &c” with the tenants “Manby Goe and others”.

Corporation Property in R1823

Unlike Espin 1817, R1823 distinguished the two rentals referred to above by showing for King Edward’s rental properties with “Louth School” in the proprietorship column. More obscurely, some properties are shown to have belonged only partly to the Corporation. R1823 has 112 records relating to Corporation property (including market tolls) with a total (half) value of £632 and recorded area of about 235 acres; but the actual acreage was somewhat larger, because many properties were not measured.

Comparison with Rents

An obvious way of both determining the basis of the rating valuations and checking their accuracy would be to compare them with the rents due under the various tenancy agreements, but this cannot always be done, firstly because some of the 112 records referred to in R1823 are not identifiable in the rentals.

Secondly some of the rents were due under long leases and did not reflect current values. For example, John Holland was paying only £15 1s for his watermill and house under a lease expiring in 1853 (231898); when the lease was renewed the new rent was £100.

Thirdly some of the rents initially seem to be absurdly low, a few shillings a year for a house. The explanation is generally that these rents were only ground rents payable under building leases. Ground rents reflected the site value only, not the value of the building. The development of James Street was carried out on that basis. It appears that some small houses were built without proper leases on the basis that Corporation would deal fairly with the tenants. This particularly applied to the houses at Monks’ Dyke Head (records 231041–231056). The relevant plan in Espin 1817 showed a jumble of buildings on the site. Probably the houses were of mud and stud construction and built on land originally let as vegetable plots.

These informal ground rent leases were clearly unsatisfactory and later the policy of the Borough Council was to put the tenancies on a more businesslike basis by granting proper leases at nominal rents for fixed terms, after which the lease would run from year to year and a full rent reflecting the value of the house would be charged. Paddison 1836 showed examples of this including a house (380133) let on a new seven year lease to William Dixon at the tiny annual rent of 5s. Later in 1836 there was a general debate on the subject; the majority view apparently favoured 17 year leases in recognition of the work done by the occupiers or their predecessors. In a comparable case Reuben North, who was emigrating, asked for compensation for the house that his father had built on Corporation land; it was eventually agreed that he should be allowed to nominate a tenant for a ten year lease at the very low annual rent of 4s 6d. He would then be able to sell the nomination.³

Rents per acre for arable and grazing land varied widely, ranging from £1.46 to £4.77 with an average of £2.40. Small pony paddocks near to the town centre were particularly valuable. Pasture was more valuable than arable land.

Auction Sale of Leases 1826

In 1825 the Corporation decided to adopt a more systematic approach to letting agricultural land. The minutes do not record the reasons for this decision, but it may have been partly attributable to the publication of R1823. The Corporation served notice to quit on tenants occupying in total 101 acres at a total rent of £249; this compared with a total rating assessment of £280 (after doubling the half values in R1823). The land was re-let from 1826 on a standard basis: the new leases were for seven years; prospective tenants had to agree to make a lump sum payment (“fine”) of £5 per acre for pasture and £3 per acre for arable land and then bid at auction the additional annual rents per acre that they were prepared to offer.

The result was to increase the annual income from the fields dealt from £249 to £283.⁴ The figure of £283 has been calculated on a simple cash basis, the lump sum payment being divided by seven; but the real gain was greater, because the lump sum payments must have helped the Corporation’s cash flow and reduced the need for borrowing. The extent of the new leases was limited: the 101 acres of land were divided amongst 22 tenants; but within these limits they provide the best possible evidence of letting value. No similar exercise was carried out in the subsequent years of the Old Corporation’s ownership.

Conclusions on R1823

The valuers for R1823 were not members of the Corporation; nor, with the possible exception of Christopher Ingoldby, were they the sort of people likely on social grounds to be admitted to the Corporation. There is therefore no reason to suspect them of being biased in favour of the Corporation. The auction figures point to two conclusions: firstly that the values in R1823 were intended to represent half of the rent that a tenant could be expected to pay, without any deduction for the landlord’s expenses and secondly that the valuations were reasonably accurate. There were many individual differences; but this was to be expected: valuers that merely copied a landlord’s rent list without exercising their own judgement would have been negligent.

The position on the Corporation’s non-agricultural land and buildings is more difficult, because they represented only a very small sample of the buildings in the town. The most that can be said is that the figures are not inconsistent with the above conclusions.

Paddison 1836

One of the first actions of the new Borough Council was to call for a report on its property and income and Richard Paddison, the town clerk,⁵ produced a full report (Paddison 1836) dated September 1836.

Paddison stated that the borough property, some of which was outside Louth, comprised 64 houses and other buildings and extended to nearly 284 acres plus some unmeasured yards and gardens. This excluded the “Louth School” properties. The main problem with Paddison 1836 as a valuation guide is that its contents are often difficult to match with entries in R1823 and R1838.

Paddison 1836 suggested that some properties had been “rented below their value”; some rents had already been increased by the new Council. On the general rental position, allowance should perhaps be made for political bias: it suited the reformers on the Council to suggest that their Tory predecessors were incompetent and perhaps corrupt.

In addition to the rents payable by the Council’s tenants Paddison 1836 included a list of the small manorial rents (see above). This list is occasionally helpful in identifying the owners of land, since many names are given in a fuller form than in R1838. For example R1838 shows Eelmire Close (381708) as owned by “Maxey”, a name not otherwise found in the rating list. Paddison 1836 shows that this meant John Maxey, paying 4d a year. This was probably the John Maxey shown in the 1841 census as living in the prison, where he held the post of chief turnkey.

Open Land in 1838

A distinction may be drawn between buildings and agricultural land. Buildings necessarily required expenditure on repairs etc at frequent intervals, but landlords’ expenditure on agricultural land was normally limited to infrequent drainage or other improvement schemes; routine expenditure (eg repairing fences) was met by the tenant. Accordingly, for open land the view might be taken that the statutory deduction should be nil, thus making the rateable value the same as the letting value. This was certainly the view in Louth at the time of the 1862 revaluation.

It is possible to compare the new RVs in R1838 for the most of the larger plots of the Corporation’s agricultural land with the rents actually paid in 1837. The systematic rent lists available for 1823 are not available for 1838 but some information can be derived from Paddison 1836 and from such minutes as have survived. The land concerned comprised 29 fields with a total area of 141 acres. The recorded rents totalled £375, which compared with totals for a new RV of £391 and a doubled old RV of £380. This indicates that the new RVs, like the old, were close to the full letting values.

Buildings in R1838

For buildings the evidence is sparse and inconsistent. Clearly, in view of the wording of the 1836 Act, the valuers ought to have made some deduction for landlords’ expenses; but the extent of this is nowhere stated. In a note to the printed version of R1851 it was stated that the 1838 valuation was “at the full yearly value deducting only a trifle for repairs and insurance. &c.” [Emphasis added.]

The difficulty in assessing what reduction was made is illustrated by the case of a house on the corner of Maiden Row and Eastgate, which had been occupied by William Hardy in 1823 (230428). It had been built (or rebuilt) by the Corporation in 1819 at a total cost of about £613. The initial rent of £35 pa was reduced to £32 in 1823 and this corresponded to the half value of £16 found in R1823.⁶ The accounts showed a further reduction to £30 in 1827 and Paddison 1836 showed the house occupied by Hardy’s widow at an annual rent of £30. R1838 (380631) showed a new RV of £25. If we assume that the 1838 valuers accepted £30 as the open market rent, the new RV points to a reduction of 16.7% for landlord’s expenses, which would have been much more than the Borough Council spent. However, the valuers may have thought that the open market rent was lower than £30: when a new tenant entered in 1841, his rent was only £26. His successor in 1853 paid only £20, though with more repairing obligations. The new RV in R1851 was £18. The house was included in a big sale of Borough Council property in 1865 and fetched £440.⁷

The Lucas Leases

The only evidence of corruption, or at least undue influence, seems to have related to the Lucas family. Frederic Lucas (1788–1842) was at the time of R1823 a solicitor in partnership with the Corporation’s town clerk; he became town clerk himself in 1824. He was the son of wine merchant and his brother, Henry (1788 – 1844), carried on the family business in premises belonging to the Corporation in the corner of Butcher Market. The rent in 1823 was £28. R1823 (230999) showed £20 as the RV; but this was reduced on appeal to £12 10s, thus making the RV less than half the actual rent.

In 1835, when the end of their property powers was near, the Corporation granted Henry a 21 year lease a rent of £28 pa. This led to legal proceedings in which, in a typically florid speech, Paddison suggested that the proper rent was at least £40. After hearing a good deal of valuation evidence, the jury found that the annual value of the premises in 1835 had been £35 but there had been no corruption.⁸

The Lucas defence was that Henry had, at his own expense, considerably improved the premises; and the Corporation judged it unfair that this should increase the rent. For rating purposes this was irrelevant. R1838 fixed the RV of the premises at £28, an apparently unjustified valuation: the valuers cannot have been unaware of the jury’s finding and a reduction of £35 to £28, an allowance of 20% for repairs and insurance, looks excessive. There were two other instances of Lucas tenancies where the initial valuations in R1823 were reduced (230674/380953 and 231587/380954).

Sales in 1838

Schedule (D) to the Compromise Act listed certain sales of property by the Borough Council in 1838. Some of these were very small and some were for land outside Louth but the remainder constituted seven sales amounting in total to almost 31 acres of land. In 1836 the total rent received for this land was £69.50, which compared with a total RV of £79.50 in R1838. The total sale price of the freehold was £1,893, or 27.2 years’ purchase. (Years’ purchase (“YP”) was used to calculate capital values by expressing the capital value as a multiple of the rent obtainable. Agricultural land tended to have the highest multiple, because land lasts for ever; buildings had lower multiples according to their condition. For example recently constructed properties at Spital Hill were advertised for sale at about 10 YP, which shows their quality to have been very low.)⁹ Freehold sale prices can sometimes be used as a reality check on rents, but this constituted too small a sample to be of much significance. Moreover estimates of what was at the time a typical figure for YP vary.¹⁰

Basis of Valuation in R1851

By 1851 there had been a number of sales of Council land and so Council properties are a less valuable guide to rents. Moreover there is no systematic information on the rents actually paid. A comparison between the old values given in R1851 and the new values shows an overall percentage reduction of 16% for Council property, which is virtually the same as the overall reduction for all properties in the town.

If the valuers had intended to make standard percentage deductions to take account of repairs, insurance etc (as happened later: see the 1862 revaluation) one possible course of action would have been to look at the Borough Council’s accounts to identify expenditure on repairs and insurance.

Accounts were produced by the Borough Finance Committee, but the surviving copies date only from 1850. Financial statements were produced half yearly and showed rough estimates of future payments under broad headings and a detailed list of payments due, but the records of actual expenditure were not classified under the same headings as the estimates. In 1851 estimated expenditure on repairs and insurance was £33 and identifiable actual expenditure seems to have been less than £39; but some of this expenditure related to the Mansion House, which was not let. Total rental income was a little over £1,400, but this included market tolls. The figures for the following year were similar. The most that can be said is that in 1851 it is unlikely that the Council’s expenditure on the repairs and insurance of income-yielding buildings reached 5% of rental income.

Corporation Land