2004] EWCA Civ 1530, 30 November 2004. Appellant tenants (F) carried out extensive works before occupying the property owned by respondent freeholders (J). F served a notice on J under the Leasehold Reform Act 1967 on 31 August 2000 (the valuation date) to acquire the freehold. As the parties were unable to agree a price, the matter was referred to the Leasehold Valuation Tribunal, whose determination was reduced on appeal by the Lands Tribunal. The issue arose as to whether the valuation should take account of development potential. The price payable according to s9(1A)(d) is the open market value at the valuation date with the price diminished by the extent by which the property's value has been increased by improvements made by tenants or predecessors (assumption (d)). F submitted on appeal that the comparison should be between the property's value in its improved and its unimproved state at the valuation date. "Held": appeal dismissed. Assumption (d) does not require the value of the potential for improvement to be excluded from the valuation of the unimproved house but does require a calculation of the amount of the increase arising from the improvements, which necessarily involved a valuation of the property in the state it would have been in on the valuation date had it not been improved. View the decision at www.bailii.org.