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Compensation schemes for property blighted by new London to Birmingham rail line unveiled
26-10-2012
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The UK Department for Transport today (Thursday 25 October) announced its long awaited proposals for a series of schemes that, it claims, will help restore confidence to the property market along the route of HS2 and make it easier for those affected to claim compensation.
It added that the proposed discretionary schemes go beyond the statutory compensation schemes that the government is legally obliged to comply with.
A consultation on the proposed safeguarding zone along the route, which generally extends to 60 metres either side of the track, has also been announced. Safeguarding is the technical term for the planning mechanism that protects large scale public infrastructure projects from conflicting developments nearby.
Both consultations will close on 31 January, 2013 and under the proposals, affected property owners may choose to be treated via one of the discretionary schemes, depending upon the type and location of their property. Each has a subtly different entitlement to compensation.
‘The first thing affected property owners should do is find out which zone their property is in. Once they have established that, they can find out which discretionary compensation scheme may be relevant,’ said James Del Mar, head of property consultant Knight Frank’s HS2 team.
‘This will allow them to either respond to the consultation if they feel the packages are inadequate or start to plan for which packages they should apply for. Alternatively, they may conclude it will be better to make a claim based on existing legislation such as statutory blight and compulsory purchase orders,’ he explained.
‘We will be looking very carefully at the details once they are finalised before advising our clients whether to take advantage of them or not. Farmers and rural landowners will need to plan particularly carefully and take expert advice because they are likely to own a number of affected property types such as farm land, commercial buildings and residential property, that fall within the various zones and could be eligible for a number of the different compensation packages,’ he added.
He pointed out that currently commercial property with a rateable value over £34,800 will not qualify for the new schemes and this could penalise those farmers who have created successful diversification enterprises.
He also said that whether the 60 meter safeguarding strip will be adequate along the entire route is debatable. ‘It does seem wrong that the sale and leaseback scheme only applies to those whose houses will need to be actually demolished.
Other properties should also qualify. There are still going to be many people who will not qualify for any form of compensation for the loss in value of their homes caused by HS2 until one year after the line has been operational. That strikes me as iniquitous, particularly to those who live outside the voluntary purchase zone and want to move home, but will not qualify for the revised hardship scheme even though HS2 has reduced the value of their homes,’ said Del Mar.
Those who own properties that will need to be demolished can opt for the sale and rent back scheme. Home owners can sell their property to the government when they wish but remain in their homes as tenants until their land is actually needed for construction. It provides full compensation, including moving costs, a home loss payment amounting to 10% of the sale price up to £47,000, Stamp Duty and professional fees.
Those with properties within, or partly within, the safeguarded zone could come under the streamlined system of advanced purchase. Owner occupiers of residential properties and owners of commercial properties (with a rateable value not exceeding £34,800) can ask the government to purchase their property under compulsory terms at a time of their choosing after safeguarding directions are made which will probably be the Spring of 2013. They will receive the unblighted open market value of the property, a home loss payment and disturbance costs such as fees, removal costs and stamp duty on a new property of equivalent value.
Those within a new Voluntary Purchase Zone (VPZ), that is likely to be 120 meters either side of the route except above tunnels in rural , may come under the streamlined voluntary purchase scheme. Owner occupiers of residential property or owners of commercial property with a rateable value not exceeding £34,800, can ask the government to purchase their property for its unblighted open market value. Home loss payments, fees, Stamp Duty and removal costs would not be paid.
Those outside the VPZ who need to sell their properties, but cannot achieve an acceptable price because of HS2 may qualify for a new hardship scheme. Those with blighted properties who need to move home or face hardship can sell them to the government for their unblighted market value, subject to satisfying specified criteria.
Those living above tunnels may be entitled to compensation under measures to provide peace of mind for property owners. Before and after surveys at the government’s expense and a settlement deed which will guarantee that HS2 would be liable for any damage caused by tunnelling, in perpetuity.
Construction is due to start in 2017 and phase one is due to be open to passengers in 2026.
