JAMES AND OTHERS v. THE UNITED KINGDOM JUGDMENT 11 which was introduced by the 1974 Act. The 1967 basis applies to less valuable properties, and the 1974 basis to the small percentage of more valuable properties (see paragraphs 19 in fine and 21 (b) above) brought within the scope of the legislation for the first time by the 1974 Act. The essential features of the two bases of valuation may be summarised as follows: (a) The 1967 basis of valuation applies to properties with a rateable value of up to £500, or £1,000 if the house is in Greater London. The price payable is the amount which the house, if sold on the open market by a willing seller, might be expected to realise on the assumptions, inter alia, that (i) the tenant has exercised his statutory right to obtain an extension of the lease for fifty years, and (ii) the purchaser is someone other than the tenant (section 9 of the 1967 Act, section 82 of the 1969 Act and section 118 of the 1974 Act). The effect of the assumption as to the extension of the lease is that the tenant pays approximately the site value, and pays nothing for the buildings on the site. The assumption that the purchaser is someone other than the tenant, introduced by the 1969 Act, also excludes any element of "merger value" from the price (see paragraph 13 above). This basis of valuation reflects the policy outlined in the 1966 White Paper (see paragraph 18 above). (b) The 1974 basis of valuation applies to properties with rateable values of over £500 and up to £750, or over £1,000 and up to £1,500 if the house is in Greater London. The price payable is the amount which the house, if sold on the open market by a willing seller, might be expected to realise on the assumption, inter alia, that at the end of the tenancy the tenant had the right to remain in possession of the house under the 1954 Act, that is as a statutory tenant paying a "fair rent" reflecting his occupation of the house (see paragraph 16 above - section 9 of the 1967 Act as amended by section 118 of the 1974 Act). In principle, this basis of valuation is more favourable to the landlord and is intended to provide a price approximately equivalent to the market value of the site and house, assuming it to be tenanted under the 1954 Act; it also allows the landlord a share of the "merger value". However, in a case where a tenant had obtained a fifty-year extension of the lease and subsequently, before expiry of the original term date of the tenancy, applied for the freehold, it was held by the Lands Tribunal (see paragraph 25 below) that the assessment of the compensation had to be on the basis of the tenant having extended his lease (Hickman v. Phillimore Estate (1985) Estates Gazette, Vol. 274, p. 261). In such circumstances, therefore, the landlord receives substantially less than the above market value in compensation. The Government recognised at the hearings before the Court that this decision had identified a loophole in the 1974 Act that needed to be cured by amending legislation. The Court has since been informed by the Government that the decision of the Lands Tribunal has been set down for appeal.