In London's High Court Mr Justice Latham dismissed a judicial review challenge brought by former Cheshire Regiment Lieutenant Colonel David Owen, 64, and his wife, Barbara, 65.
The couple attacked the Department of Transport's decision not to buy their home on grounds that it would not be 'seriously affected' by construction of the Cirencester by-pass.
The Owens brought their bungalow home at Ashgrove, the Whiteway, Cirencester, in November 1990, but at the time of the purchase were not aware of the full implications of the A417 bypass development, said the judge.
The judge commented: 'There is no doubt that they have put forward a strong case for saying that the effects of the construction work will be significant.
'Further, estate agents instructed on their behalf advised that it would be a waste of money to try to market the property, and indeed expressed the view in January 1993 that it was unsaleable 'at the present'.'
'It is not therefore surprising that they feel aggrieved at the refusal of the Secretary of State to acquire their property.' Mr Justice Latham said: 'It seems to me to be impossible on the face of it to say that the Department failed to ask the right question, or to take into account all the relevant considerations.'
He said DTp officials had not been 'constrained' by the strict wording of the Government's guidelines.
The court heard that the DTp would not, in any event, have'exercised its discretion' to buy the property as the couple had purchased their home with 'knowledge of the line of the proposed by-pass'.
The Owens had sought judicial review of the Secretary of State's decision - confirmed on April 20 this year - not to purchase their home. Their case was dismissed and they were ordered to pay legal costs. The judge denied them leave to appeal, but the couple may still petition the Appeal Court directly.