Golf courses
Source: gov.uk (2025-04-28)

This publication is intended for Valuation Officers. It may contain links to internal resources that are not available through this version.

1. Scope

This section deals solely with stand-alone golf courses.

Whilst such properties may have bar and lounge facilities, retail outlets or other leisure facilities, these will be subsidiary to the main use as a golf course. It is recognised that golf courses may also be found at hotels, large leisure centres, other sporting hereditaments, etc. but in such instances the value of this element will be derived as a consideration of the whole. The valuation considerations which follow may assist by providing a cross check against the preferred method of valuation adopted when a golf course is ancillary to another class of property.

Golf driving ranges and themed mini-golf (often referred to as adventure golf) are covered in Rating Manual: section 6 part 3 - section 455.

Ownership of golf courses falls into three main categories; private members clubs (non-profit making), commercial (proprietary) clubs and municipally owned.

Most golf courses are affiliated to the English or Welsh Golf Union, which set the standards for par.

The quality of courses ranges from basic nine hole conversions of farmers’ fields, to manicured championship courses, with a wide variety in between. The physical characteristics can vary greatly, from upland or downland courses, to parkland, heathland, or seaside links.

Typically, in addition to a golf course, the hereditament will also have a clubhouse, professional’s shop, greenkeeper’s building, and practice land (anything from a small putting green, up to a covered, floodlit driving range). An increasing number of hereditaments also include health and fitness facilities and / or letting rooms.

2. Description and Special Category Code

List Description: Golf Course and Premises Primary Description Code: LS2 SCAT code: 117, suffix S

3. Responsible Teams

This is a specialist class of property, to be valued by valuers in each Business Unit.

4. Co-ordination

The Golf Course Class Co-ordination Team has overall responsibility for this class and will provide advice as necessary during the life of the Rating Lists. The team is responsible for the approach to and accuracy and consistency of valuations. The team will deliver Practice Notes describing the valuation basis for revaluation and provide advice as necessary during the life of the rating lists. Caseworkers have a responsibility to:

follow the advice given at all times

not depart from the guidance given on appeals or maintenance work, without approval from the co-ordination team

seek advice from the co-ordination team before starting any new work

An increasing number of larger hotels (SCAT Code 138S) have a golf course as an ancillary within the overall assessment. Responsibility for valuation of these lies with the Unit Valuer team and guidance on hotels is provided in Rating Manual: section 6 part 3 - section 510 (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-510-hotels).

Also a number of golf courses have large health and fitness centres, some of which are equivalent to stand-alone private health and fitness centres (SCAT Code 259 & 260S). These are also the responsibility of the Unit valuer team and guidance is available in Rating Manual: section 6 part 3 - section 965 (https://www.gov.uk/guidance/rating-manual-section-6-part-3-valuation-of-all-property-classes/section-965-sports-and-leisure-centres-private).

Indeed, it may be more appropriate to value as a health and fitness centre with ancillary golf course or as an hotel with an ancillary golf course. This will depend on the particular circumstances of each hereditament. In such cases the rateable value must fully reflect the value of the newly created entity and not simply be an addition of individual values.

5. Legal Framework

5.1. Exemption of certain local authority golf courses

A golf course which has been provided by, or is under the management of, a local authority may be exempt from rating under Schedule 5 para 15 LGFA 1988, if it is held as part of a larger public park and available for free and unrestricted use by the public. The payment of green fees does not necessarily defeat the free and unrestricted use of the course by the public as they can be considered to be for the purpose of regulating the game of golf, not excluding the public.

The question of exemption of local authority golf courses is covered in much greater detail in Rating Manual: section 6 part 6 part C, which must be read when considering this issue. It has become apparent that in recent years local authorities have, in many instances, ceased to be directly involved in the management of what were municipal golf courses. There has been an increasing tendency for these previously exempt golf courses to be offered to let in the open market. In a number of instances this has involved the tenant committing to substantial capital expenditure both in respect of the course itself and the clubhouse and greenkeeper’s buildings. The initial rent in these circumstances is often minimal during the early years of the tenancy.

The exemption conferred by Schedule 5 para 15 will extend to all buildings within the curtilage of the course, which are used in connection with its maintenance and to any “clubhouse”, occupied together with the course, which is available for use by all members of the public playing the course.

Guidance is given in the Practice Note in respect of clubhouses adjoining exempt courses and separately assessed because they are either outside the curtilage of the exempt golf course or in separate occupation.

Advice should be obtained from the Golf Class Co-ordination Team who will liaise with the Unit Technical Adviser and the National Valuation Unit, if appropriate, before exemption is conceded.

5.2 Composite Hereditaments

Any dwelling house within the curtilage of the hereditament, as well as living accommodation of the steward of a clubhouse, will be domestic property and the hereditament will be a composite hereditament.

5.3 Unit of Assessment - Let Outs

A “professional shop” may be found to be in the separate occupation and control of the professional employed by the club and capable of separate assessment. Similarly, the catering operation may be let out to a third party. The individual circumstances of each case will dictate what entries are to be made in the Rating List.

5.4 Land used for the dual purpose of golf and agriculture

“Land kept or preserved mainly or exclusively for purposes of sport or recreation” is excepted from the expression “agricultural land” and is therefore rateable (Para 2(2)(d) Sch 5 LGFA 1988). When land is found to be used for the dual purposes of golf and agriculture, guidance on rateability will be found in the following judgements and decisions:

a. Bearstead Golf Club v Maidstone AC (1931) KB 14 R & IT 307.

b. Dening v Chard RA and Yeovil AC (1933) 19 R & IT 287.

c. Goodwood Golf Club v Chichester AC (1935) 22 R & IT 140.

d. Abernant Hotel and Estate Co Ltd v Davis (VO) (1954) LT 47 R & IT 694.

e. Bloodworth (VO) v Marquess of Exeter (1958) LT 51 R & IT 822.

f. Peak (VO) v Burley Golf Club and Harding (VO) v Bramshaw Golf Club (1960) CA 53 R & IT 277.

6. Survey Requirements

On inspection a course scorecard should be obtained which will provide basic details of the course including: number of holes, layout, total length, course and hole par, location of bunkers and so on. A total course area should be calculated together with the area of any amenity land (woodland / landscaping). The availability of car parking and practice areas should also be noted. The location of any hazards such as roads, rights of way, pylons and the like which may interfere with the use of the course should also be recorded along with the course’s liability to flood. The clubhouse, greenkeeper’s accommodation and any shop area should be measured to net internal area (NIA). It must be remembered that greenkeeping buildings are often located within the course away from the main buildings and should not be overlooked when survey or referencing is undertaken.

An NIA survey should also be carried out for any health and fitness accommodation or letting rooms. An inspection checklist for golf courses is available at Appendix 1, and should be completed for all new properties and updated on maintenance work.

The details of any premises licence or club premises certificate should be obtained together with details of any licence permitting weddings or civil partnership ceremonies. Details of the licensed rooms and their facilities should be noted along with any facility to erect marquees. Any brochures for the property should be obtained and details of planning consents for use as a venue should be checked.

Where found on inspection, reference should also be made in the survey report to any of the items noted in paragraph 8.4 below.

7. Survey Capture

All plans, surveys and checklists should be stored in the property folder of the Electronic Document Records Management (EDRM) system with the rating survey captured on RSA, where two survey units should be created - one for the course itself and the second for the clubhouse. All other survey details, including the greenkeeper’s accommodation, should be captured as “other additions”.

8. Valuation Approach

8.1 Rentals

The approach to valuation should, wherever possible, be on a rentals basis. Where this is limited locally, evidence of comparison with other golf courses in a wider area may be the only practical method of valuation bearing in mind the doubts which the courts have cast on valuations having regard to capital costs and profits. When carrying out valuations on comparative terms, ‘price per course’ should be used as the unit of comparison.

This is supported by the Lands Tribunal, which endorsed the practice of valuation by reference to direct or indirect rental evidence in the cases referred to elsewhere in this section. Every effort should be made to obtain details of rents and lease terms, although such lettings may be on favourable terms and possibly as low as agricultural value. In order to derive a basis of comparison it is advisable that details of membership, total subscriptions and other sources of income are obtained. Rents passing on golf courses where the club has Community Amateur Sports Club (CASC) status should be distinguished and comparison made with rents available for non-CASC registered clubs.

8.2 Receipts and Expenditure

The majority of golf clubs are not operated as commercial ventures but run for the benefit of their members. The use of the receipts and expenditure basis of valuation is therefore inappropriate in determining annual value as profit will not be the primary objective of the occupier.

In the North Worcestershire and South Staffordshire golf club cases (Stourbridge Golf Club Ltd, v Clark (VO), Blackwell Golf Club Ltd v Linley (VO), Barr (VO) v Enville Golf Club Ltd, South Staffordshire Golf Club Ltd v Barr (VO): (1959) 52 R and IT 437) the Lands Tribunal held that, although assistance may be afforded by consideration of the receipts of a club, the receipts should not form the major approach to valuation for the following reasons:

a. receipts do not properly reflect the variation of rental levels between one part of the country and another

b. the production of accounts should be at the discretion of the ratepayer

c. where available, modern and reliable rental evidence was the most valuable evidence

8.3 Contractor’s Basis

The contractor’s basis method is equally unreliable. Although evidence of current costs of construction may be available in respect of individual courses, these costs may well bear little relationship to the costs of construction elsewhere. Cost will depend to a major extent on the physical characteristics of the land and the nature of the subsoil etc. upon which the course is constructed, in addition to the extent and quality of the greens, the proximity of services and the necessity to provide artificial, in the absence of or to supplement natural, hazards.

In Prince’s Golf Club (Sandwich) Ltd v Millwood (VO) (1961 IR & VR 246) the Lands Tribunal expressed the view that no economic return could be expected from the considerable sum expended by the occupiers in the rehabilitation of a derelict course.

8.4. Valuation Considerations

The individual and inherent characteristics of each golf course must be taken into account where they are of such a nature as to affect rental value.

The following factors are likely to affect the rental value of a course and should be noted during the inspection:

a. the accessibility of the course and its proximity to centres of population

b. competition from neighbouring clubs

c. the type of competitions hosted by the club (though it should be borne in mind, that some clubs may choose not to host outside competitions, preferring to keep the course available for the use of their members)

d. area of the course (the minimum area of a non championship standard 18 hole course is between 35 and 40 hectares, this area is normally sufficient to enable each hole to be played without interruption and provides a total playing length of about 6,000 yards, a higher category course will generally require a greater area)

e. the nature of the subsoil and the contours of the land (courses with poor-draining soil or those in low-lying areas can be prone to flooding and subject to closure for significant periods)

f. the quality of course design and construction, eg. greens laid on predominantly sand base, to USGA standards

g. cost of maintenance

h. water source (mains or bore hole - the former being a considerable operational cost)

i. irrigation (the availability of a piped water supply to the tees and greens and, in some cases, fairways, is of considerable benefit)

j. course layout (the course may suffer dissection by public roads, an excessive number of footpaths or rights of way which can prove to be a serious inconvenience to the players)

k. grazing and/or common rights may be exercised over the whole or parts of the course

l. adequate land should be available for car-parking

m. planning restrictions limiting either the activities of the club or the time during which it can operate (eg. prohibiting the use of the clubhouse for non-golf events such as wedding receptions, seminars, etc, or restricting the hours that the course, clubhouse or driving range may be used)

n. driving range - number of bays, are they just for members use or available on a more commercial basis

o. Site of Special Scientific Interest (SSSI) - the presence of any land designated as an SSSI should be noted, the area recorded and its location shown on the plan

9. Valuation Support

Golf courses should be valued using RSA to achieve valuations which follow the recommended approach.

Additional support is available through:

Survaid.

Class Co-ordination Team for Golf.

Practice note: 2023 - golf courses

1. Market Appraisal

Golf participation has been in decline since the sport’s peak in popularity in the 1990s. Membership numbers in England fell from 850,000 in 2006 to 642,240 in 2018 the most recent reported date with similar patterns in Scotland and Wales. These changes have seen the gradual disappearance of members’ waiting lists, capacity issues and a reduction in club joining fees prior to the pandemic. Although there have been a number of golf club closures since the last revaluation there is still arguably a general golf course oversupply in many parts of the country. In response there has been an increase in flexible membership with only 13% of courses offering this in 2012 it has now increased to 36% in 2018 the most recent reported date.

Part of the fall in membership is because many golfers no longer feel the need to be a member of a club. They do not want the commitment of an annual membership fee and the pressure that brings in terms of time and money. There are ‘deals’ to be had such as two for one offers and low green fees. Golf club membership may be falling in some areas with golfers preferring the greater flexibility of ‘pay-as-you-go’ but there is an overriding concern of the sports perceived inability to attract younger players. In response the industry has increased the number of flexible memberships, discounted rates for younger players and incentives such as a free introduction to the golf pro. However, quality courses and clubhouses situated in areas with high levels of participation and income levels such as the South East continue to attract a strong membership.

Where membership has fallen many clubs are trying to respond by exploiting opportunities to develop the income producing capability of green fees, professional shop sales, outside functions and conference facilities. Increasingly, letting accommodation and/or health and fitness facilities are provided, ranging from a small gym area through to a large wet and dry leisure and fitness centre with separate membership. There has been an increase in the number of clubs franchising out the catering where a third party can run this element more efficiently. Some clubs are also looking to become more female and family friendly to widen the appeal of golf generally. Examples of this include relaxing the rules on dress codes and increasing 9 hole competitions.

Despite the problems in the industry golf is still a very popular sport and the golf industry generates approximately £1.8bn of annual income.

At the lower end of the pay and play market, more municipal owned courses in public parks are now privately run following successful competitive tendering. Exempt municipal courses are now regularly placed in the open market to let and a review of courses with a rates exemption may need to be undertaken in some areas.

One innovation at this end of the market was the introduction of foot golf to the UK in 2013. This involves installation of 21” holes, usually on secondary or nine hole courses, with participants kicking a football around the course. Foot golf’s popularity took off fairly rapidly with 200 courses and 30,000 weekly players by September 2016 the most recent date reported. These additional customers have also led to increased revenue being generated from food and beverages. There has been an increased trend in 9 hole or secondary golf courses closing and reverting solely to foot golf.

The COVID-19 pandemic had a major impact on Golf Courses in the period leading up to the AVD (1 April 2021). Details of the various restrictions implemented by statute in response to the pandemic, and of the vaccination rollout, can be found online. In February 2021 the UK Government published its Roadmap out of lockdown for England which set out four steps to relax restrictions. Step 1, easing restrictions on outdoor gatherings, had already taken place by the AVD.

The later three stages of the Roadmap for England included
- the opening of outdoor hospitality, and non-essential retail (Step 2, no earlier than 12 April)
- most legal restrictions on meeting others outdoors to be lifted, opening of indoor entertainment venues such as cinemas, casinos and bingo halls (Step 3, no earlier than 17 May 2021)
- the removal of remaining restrictions on social contact (Step 4, no earlier than 21 June)
Subsequent to 1 April 2021 steps 2 and 3 took place as planned, but Step 4 was delayed four weeks to 19 July.

The situation in Wales, both leading up to and after the AVD, was similar although not identical.

Performance in 2020

Golf has benefited from increased demand between the lockdown periods due to less restrictive demands placed on outdoor activities with the number of rounds played in July, August and September up by 59% from the same period in 2019. Proprietary courses have tended to do better due to their membership fees being less than membership courses.

Operators are expected to benefit from pent up demand caused by the national lockdowns with some courses seeing again the emergence of waiting lists. Longer term prospects are dependent on whether the industry can maintain this increased popularity of golf. Booking systems are now used by 96% of members clubs in 2020 compared to 51% in 2019 to enable more efficient use of the golf course.

To address the age bias of golf and attract younger players there has been a move to shorten courses or revert 18 hole courses to 9 holes.

2. Changes from the last Practice Note

There are no changes from the broad principles followed for the 2017 Rating Lists and the approach is therefore the same.

3. Ratepayer Discussions

There have been no ratepayer discussions for Revaluation 2023.

4. Valuation Scheme

Whilst rented courses may not be prolific it is considered that there should be sufficient examples to support the rental/comparative basis of valuation. It is possible that in the future, rented properties may become scarcer as the trend for members clubs has been to purchase the freehold. Industry representatives take the view that when undertaking a valuation consideration must be given to the “profitability potential” which may require a review of accounts and turnover figures. Such information may be useful in assisting the valuation process but the rental/comparative basis must be adopted and any suggestion that golf courses should primarily be valued having regard to receipts and expenditure must be resisted.

4.1 Courses

Considerable judgement may be needed to determine the most appropriate categorisation but the physical characteristics will be readily apparent i.e. plain farmers’ fields, upland or downland, parkland or heathland, or seaside links. Which category the course falls into (see Appendix 1 to this Practice Note) may, however, be subjective and will need to reflect all the attributes of the course under consideration, although the categories offer a description as a guide to this; i.e. whether A, B, C or D and their sub-groups + or -. It is recommended that the valuation scale adopted reflects location, ranging from, on the one hand, high value areas with easy access to large conurbations, through to remote rural areas on the other.

Categorisation of the course is the key factor affecting valuation, and it is important that due consideration is given to this aspect at the analysis stage. Factors which should be taken into account include:
- location (including drive time)
- competition (competing demands from other clubs)
- cost of maintenance (including irrigation)
- the nature of the subsoil and the contours of the land
- water source (mains or bore hole - the former being a considerable maintenance cost)
- the existence of rights of way that interfere with play
- common and grazing land rights and restrictions
- size of the playing area, which if small, may necessitate crossing fairways, or protective netting adjacent to tees
- susceptibility of the course to flood
- presence of any land designated as a Site of Special Scientific Interest (SSSI)
A “named” course may command a higher rent and Category A & A+ courses are more likely to be subject to individual negotiation and agreement.

It is recommended that analysis and valuation of the course element for 2023 is in terms of a price per course, taking into account all the above factors in accordance with the table in Appendix 1. This follows the approach used for the 2017 Rating List.

Additional amenity or woodlands should only be valued if it is a feature of the actual course played and/or can be seen to enhance the value of the overall course. For example, an area of land located at the course boundary which has been declared an SSSI and ‘out of bounds’ is unlikely to add value to the course and any onerous liability to maintain it may need to be reflected; whereas an attractive central reservation of mature trees and azalea bushes which define the fairway will clearly add value.

Consideration has also been given to the category and description of other accommodation and this is also shown at Appendix 1. The following should be noted:

4.2 Accommodation

a. Clubhouses have been categorised into four types (see Appendix 1), from top quality through to improved and unimproved traditional purpose built and converted buildings down to the lowest category of inferior construction. An eye to the basis adopted for sports and social clubs is important, taking into account that golf clubs are naturally attached to large areas of land. Size of clubhouse may be an issue (for an average 18 hole course, a clubhouse of between 700 meters and 1000 metres ITMS is needed). Where the ITMS area exceeds this, it may be necessary to consider whether the excess adds to the overall value.

The following standard approach to valuation factors has been incorporated into the clubhouse scale matrix (measurement is to NIA):

Public Rooms - 100%

Including pro shop, committee rooms, bars, lounges, dining rooms, snooker rooms etc. Note: Pro shop (a shop size of 60 metres to 80 metres of sales area is normally required. Anything larger is likely to lead to expensive over stocking). However, in some locations the shop will have a commercial viability beyond that traditionally associated with supporting the club. If the expected trade profile is not ancillary to the course the value will reflect the special circumstances and a quantum allowance is unlikely to be appropriate.

Secondary Accommodation - 75%

Including changing rooms, kitchens, offices etc. (the area of changing rooms is to include showers and WC’s, unless there are no separate WC’s attached to public areas).

Ancillary Accommodation - 50%

Including general storage etc., no further adjustments for ancillary accommodation should be made except in exceptional circumstances e.g. trap door access to basement stores.

Where a separately assessed golf clubhouse (Scat code 060) is situated adjoining an exempt course regard should be had to the rating hypothesis of a willing landlord, a willing tenant and vacant and to let [see the Court of Appeal decision in Shell-Mex v Langley (1960) RRC 249]. Depending on the physical position, it is likely that the rateable value of the clubhouse should reflect some additional rental value for the benefit of the adjoining exempt course. It is unlikely that any enhancement will exceed 50% of the value of the exempt course but regard should be had to the relative negotiating strengths of the hypothetical landlord and the hypothetical tenant. A clubhouse valued on this basis should be described as GOLF CLUBHOUSE and PREMISES and further guidance can be obtained from the Golf Course Class Co-ordination Team or the Unit Technical Adviser.

b. Greenkeeper’s accommodation varies tremendously in quality from the very best with rest rooms, offices, toilet and shower facilities required under the Health and Safety at Work Act to the most basic of building and will therefore have a wide range of value to reflect quality and location. See Appendix 1 for a description of each category. Also, see final considerations below.

c. Practice land and practice areas (required particularly for teaching purposes) including putting greens and pitch and putt areas: When adopting an overall value per course, a view will have to be taken on the need for any value adjustment to reflect the existence and quality of these facilities when seen as outside the normal expectation, compared with other courses of a similar standard. If an addition is required, it should be in the form of a spot figure.

d. Other facilities such as driving ranges, swimming pools, bowling greens, etc. will be valued according to their quality and the location of the golf course. Driving ranges should be valued at a price per bay reflecting the range itself (see below). Where gym facilities have been created from part of the clubhouse then the clubhouse value should be used, however, for purpose-built gym accommodation then reference should be made to the local private health and fitness scale. Any letting rooms should be valued having regard to the local “double bed unit” scale.

Stand-alone driving ranges and themed mini golf are covered in RM Vol 5 section 455. Exceptionally, a golf course hereditament may include themed mini golf, such as “adventure golf”. Where this is in the same occupation as the golf course it should be valued as part of the golf course hereditament. Any rent passing may not reflect the many improvements made by the tenant. In such circumstances the additional RV to the golf course should be arrived at by applying a rental percentage, in the range of 12% - 16%, to the estimated fair maintainable trade (gross receipts excluding VAT) at the AVD.

The resultant total RV should reflect the additional value of the other facilities to the whole hereditament and not simply be a sum of individual values. In all cases it is necessary to consider the additional rental value added to the golf hereditament as a whole. For example, a driving range at some golf clubs is only a facility provided for the benefit of the membership and would result in nominal additional rental value. In other instances, a driving range can be a major commercial operation which substantially enhances the rental value. Location is therefore likely to determine if additional facilities are a major commercial factor to be reflected in the valuation.

4.3 Final Considerations (‘Stand back and Look’)

It has been agreed that when applying the guidance, it is essential to take an overview of the final valuation and give proper consideration to the relativities of the constituent parts. There is an expected range and relationship between some of the parts.

By way of example only, if a clubhouse value is, say £35/m2, it may be inappropriate to adopt £30/m2 for a greenkeeper’s shed. Similarly, if the course is of a low category and poor quality it would require special circumstances for the clubhouse to be valued at say £65/m2.

Also, as a guide only, when negotiating leases or rents, surveyors adopt a rule of thumb whereby the value of a course (without buildings) should be approximately two thirds of the total rent and greenkeeper accommodation would be a maximum proportion of 7.5% of the total valuation. The valuation model for rating purposes is unlikely to exactly mirror the market approach where many components are rolled up into a single value. However, any significant deviation from these general principles should alert the valuer to ‘look again’.

Golf courses are by their nature often very individual and there will frequently be elements that seem to deviate from the perceived norm, such as regular flooding, steeply sloping sites, or excessive public rights of way, which will need special consideration and judgement. When contemplating any allowance for such factors, careful investigation will need to be given to the particular nature of the courses from which comparable rental evidence has been obtained, since the disability may be common locally and already reflected in the local ‘tone’.

Appendix 1

Categorisation of Course and Buildings

1 Course

Category Description

Category A+ Elite championship course capable of holding top PGA events

Category A Prestige championship course with national prominence

Category B Very good course up to County championship standard with excellent local reputation

Category C Standard members, best pay and play and best municipal course

Category D Standard municipal pay and play and poor members course

Category D- Poor municipal and poor pay and play course

2 Clubhouse

Category Description

1(1) Modern high quality purpose built country club style or good period conversion affording spacious public principal rooms and locker rooms with excellent facilities

1(2) Modern utilitarian building purpose built or traditional clubhouse or good quality residential conversion with much improved public principal rooms and locker rooms

1(3) Traditional purpose built or residential conversion with standard accommodation that may suffer from inferior layout

1(4) Inferior construction or poor conversion suffers from a number of disadvantages

3 Greenkeepers Accommodation

Category Description

2(1) Brick or pressed steel with tiled or metal roof with good headroom and office and mess room facilities

2(2) Standard shed with no added facilities

2(3) Timber or stone barn of inferior quality and low headroom

Inspection checklist can be found here (https://assets.publishing.service.gov.uk/media/63c8148ae90e076850604dd7/Golf_Course_RM_Appendix_1_Inspection_checklist.xls).

Practice note 1: 2017 - golf courses

1. Market Appraisal

Following the rapid increase in the number of golf courses during the 1990s it has taken a while for the full impact of the disappearance of members’ waiting lists, capacity issues and club joining fees to fully filter through. However, from a position of huge demand for golf there is now a general golf course oversupply in many parts of the country.

Golfers are now free to shop around for the best deals with courses often competing to attract golfers. A lot of golfers no longer feel the need to be a member of a club. They do not want the commitment of an annual membership fee and the pressure that brings in terms of time and money. There are ‘deals’ to be had such as two for one offers and low green fees. This situation, allied to the recession from 2009 onwards has reduced the number of golfers being members of a club by approximately 20% from 882,000 in 2004 to 707,424 in 2013. Golf club membership may be falling in some areas with golfers preferring the greater flexibility of ‘pay-as-you-go’ but there is an overriding concern of the sports perceived inability to attract younger players. However, well located quality courses and clubhouses continue to attract a strong membership.

Where membership has fallen many clubs are trying to respond by exploiting opportunities to develop the income producing capability of green fees, professional shop sales, outside functions and conference facilities. Increasingly, letting accommodation and/or health and fitness facilities are provided, ranging from a small gym area through to a large wet and dry leisure and fitness centre with separate membership. Some clubs are also looking to become more female and family friendly so as to widen the appeal of golf generally.

It should be noted that golf is still a very popular sport and the golf industry generates approximately £3.4bn of annual income. Nevertheless, in extreme cases some courses have closed often reverting to agricultural or some other alternative use due to oversupply, location issues or inferiority.

At the lower end of the pay and play market, more municipal owned courses in public parks are now privately run following successful competitive tendering. Exempt municipal courses are now regularly placed in the open market to let and a review of courses with a rates exemption may need to be undertaken in some areas.

2. Changes from the last Practice Note

There are no changes from the broad principles followed for the 2010 Rating Lists and the approach is therefore the same.

3. Ratepayer Discussions

For R2017 central discussions once again took place with agents acting for ratepayers and advising the English Golf Union and the Association of Golf Course Owners. Positive views were received on the 2010 list approach which moved valuing the course element on a price per course basis in line with the approach adopted by the market. It was agreed that the course classification bands adopted for the 2010 list should continue to be used for 2017.

The guidance below is consistent with views expressed and whilst it cannot be taken as a formal memorandum of agreement it is expected that the majority of ratepayers’ agents will not seek to challenge the content of this Practice Note nor the valuation approach to be adopted.

4. Valuation Scheme

Whilst rented courses may not be prolific it is considered that there should be sufficient examples to support the rental/comparative basis of valuation. It is possible that in the future, rented properties may become scarcer as the trend for members clubs has been to purchase the freehold. Industry representatives take the view that when undertaking a valuation consideration must be given to the “profitability potential” which may require a review of accounts and turnover figures. Such information may be useful in assisting the valuation process but the rental/comparative basis must be adopted and any suggestion that golf courses should primarily be valued having regard to receipts and expenditure must be resisted.

4.1 Courses

Considerable judgement may be needed to determine the most appropriate categorisation but the physical characteristics will be readily apparent i.e. plain farmers’ fields, upland or downland, parkland or heathland, or seaside links. Which category the course falls into (see Appendix 1 to this Practice Note) may, however, be subjective and will need to reflect all the attributes of the course under consideration, although the categories offer a description as a guide to this; i.e. whether A, B, C or D and their sub-groups + or -. It is recommended that the valuation scale adopted reflects location, ranging from, on the one hand, high value areas with easy access to large conurbations, through to remote rural areas on the other.

Categorisation of the course is the key factor affecting valuation, and it is important that due consideration is given to this aspect at the analysis stage. This should include co-ordination with neighbouring Units. Factors which should be taken into account include:

Location (including drive time)

Competition (competing demands from other clubs)

Cost of maintenance (including irrigation)

The nature of the subsoil and the contours of the land

Water source (mains or bore hole - the former being a considerable maintenance cost)

The existence of rights of way that interfere with play

Common and grazing land rights and restrictions

Size of the playing area, which if small, may necessitate crossing fairways, or protective netting adjacent to tees

susceptibility of the course to flood

the presence of any land designated as a Site of Special Scientific Interest (SSSI).

A “named” course may command a higher rent and Category A & A+ courses are more likely to be subject to individual negotiation and agreement.

It is recommended that analysis and valuation of the course element for 2017 is in terms of a price per course, taking into account all the above factors. This follows the approach used for the 2010 Rating Lists. Again, co-ordination with neighbouring Units should be undertaken, prior to compiling a valuation scale in accordance with the table in Appendix 1.

Additional amenity or woodlands should only be valued if it is a feature of the actual course played and/or can be seen to enhance the value of the overall course. For example an area of land located at the course boundary which has been declared an SSSI and ‘out of bounds’ is unlikely to add value to the course and any onerous liability to maintain it may need to be reflected; whereas an attractive central reservation of mature trees and azalea bushes which define the fairway will clearly add value.

Consideration has also been given to the category and description of other accommodation and this is also shown at Appendix 1. The following should be noted:

4.2 Accommodation

a. Clubhouses have been categorised into four types (see Appendix 1), from top quality through to improved and unimproved traditional purpose built and converted buildings down to the lowest category of inferior construction.

An eye to the basis adopted for sports and social clubs is important, taking into account that golf clubs are naturally attached to large areas of land. Size of clubhouse may be an issue (for an average 18 hole course, a clubhouse of between 700 metres and 1000 metres ITMS is needed). Where the ITMS area exceeds this, it may be necessary to consider whether the excess adds to the overall value.

The following standard approach to valuation factors has been incorporated into the clubhouse scale matrix (measurement is to NIA):

Public Rooms - 100%

Including pro shop, committee rooms, bars, lounges, dining rooms, snooker rooms etc. Note: Pro shop (a shop size of 60 metres to 80 metres of sales area is normally required. Anything larger is likely to lead to expensive over stocking). However, in some locations the shop will have a commercial viability beyond that traditionally associated with supporting the club. If the expected trade profile is not ancillary to the course the value will reflect the special circumstances and a quantum allowance is unlikely to be appropriate.

Secondary Accommodation - 75%

Including changing rooms, kitchens, offices etc. (the area of changing rooms is to include showers and WC’s, unless there are no separate WC’s attached to public areas).

Ancillary Accommodation - 50%

Including general storage etc., no further adjustments for ancillary accommodation should be made except in exceptional circumstances e.g. trap door access to basement stores.

Where a separately assessed golf clubhouse (Scat code 060) is situated adjoining an exempt course regard should be had to the rating hypothesis of a willing landlord, a willing tenant and vacant and to let [see the Court of Appeal decision in Shell-Mex v Langley (1960) RRC 249]. Depending on the physical position, it is likely that the rateable value of the clubhouse should reflect some additional rental value for the benefit of the adjoining exempt course. It is unlikely that any enhancement will exceed 50% of the value of the exempt course but regard should be had to the relative negotiating strengths of the hypothetical landlord and the hypothetical tenant. A clubhouse valued on this basis should be described as GOLF CLUBHOUSE and PREMISES and further guidance can be obtained from the Golf Course Class Co-ordination Team or the Unit Technical Adviser.

b. Greenkeeper’s accommodation varies tremendously in quality from the very best with rest rooms, offices, toilet and shower facilities required under the Health and Safety at Work Act and European Community regulations to the most basic of building and will therefore have a wide range of value to reflect quality and location. See Appendix 1 for a description of each category. Also, see final considerations below.

c. Practice land and practice areas (required particularly for teaching purposes) including putting greens and pitch and putt areas: When adopting an overall value per course, a view will have to be taken on the need for any value adjustment to reflect the existence and quality of these facilities when seen as outside the normal expectation, compared with other courses of a similar standard. If an addition is required, it should be in the form of a spot figure.

d. Other facilities such as driving ranges, swimming pools, bowling greens, etc. will be valued according to their quality and the location of the golf course. Driving ranges should be valued at a price per bay reflecting the range itself (see below). Where gym facilities have been created from part of the clubhouse then the clubhouse value should be used, however, for purpose built gym accommodation then reference should be made to the local private health and fitness scale. Any letting rooms should be valued having regard to the local “double bed unit” scale.

Stand-alone driving ranges and themed mini golf are covered in Rating Manual: section 6 part 3 - section 455. Exceptionally, a golf course hereditament may include themed mini golf, such as “adventure golf”. Where this is in the same occupation as the golf course it should be valued as part of the golf course hereditament. Any rent passing may not reflect the many improvements made by the tenant. In such circumstances the additional RV to the golf course should be arrived at by applying a rental percentage, in the range of 12% - 16%, to the estimated fair maintainable trade (gross receipts excluding VAT) at the AVD.

The resultant total RV should reflect the additional value of the other facilities to the whole hereditament and not simply be a sum of individual values. In all cases it is necessary to consider the additional rental value added to the golf hereditament as a whole. For example, a driving range at some golf clubs is only a facility provided for the benefit of the membership and would result in nominal additional rental value. In other instances a driving range can be a major commercial operation which substantially enhances the rental value. Location is therefore likely to determine if additional facilities are a major commercial factor to be reflected in the valuation.

4.3 Final Considerations (‘Stand back and Look’)

It has been agreed that when applying the guidance it is essential to take an overview of the final valuation and give proper consideration to the relativities of the constituent parts. There is an expected range and relationship between some of the parts.

By way of example only, if a clubhouse value is say £35/m2, it may be inappropriate to adopt £30/m2 for a greenkeeper’s shed. Similarly if the course is of a low category and poor quality it would require special circumstances for the clubhouse to be valued at say £65/m2.

Also, as a guide only, when negotiating leases or rents, surveyors adopt a rule of thumb whereby the value of a course (without buildings) should be approximately two thirds of the total rent and greenkeeper accommodation would be a maximum proportion of 7.5% of the total valuation. The valuation model for rating purposes is unlikely to exactly mirror the market approach where many components are rolled up into a single value. However, any significant deviation from these general principles should alert the valuer to ‘look again’.

Golf courses are by their nature often very individual and there will frequently be elements that seem to deviate from the perceived norm, such as regular flooding, steeply sloping sites, or excessive public rights of way, which will need special consideration and judgement. When contemplating any allowance for such factors, careful investigation will need to be given to the particular nature of the courses from which comparable rental evidence has been obtained, since the disability may be common locally and already reflected in the local ‘tone’.

Practice note 1: 2017 - Appendix 1

Categorisation of Course and Buildings

1. Clubhouse

2. Greenkeepers Accommodation

3. Course