How does HS2 Affect You?
The proposed route of the two phases of HS2 are as follows: Phase One: - London – through the Chilterns, Warwickshire to Birmingham, South Northamptonshire and Central Birmingham. Phase Two: Brimingham to the existing West Coast line north of Lichfield to Manchester and Leed, passing through Stafford, Crewe and Warrington. Manchester will be served by a spur off the main line which will run parallel with the M56.
Leeds will be connected via a supur off the main line running to the east of Birmingham following the M42 corridor towards Derby and Nottingham with a hub station located at Toton, a mile from the M1. There will then be a spur providing an onward route to the existing East Coast line connecting within nine miles south west of York.
A further spur will serve Leeds by branching off the main line and running within the existing Castleford to Leeds corridor.
Once it becomes known that there is to be a major transport route built through an area, the value of properties along the likely route will drop and the local property market begins to be affected by localised panic and those people in the area that are able to, will rush to off load their property before the value drops too far. Properties in the area become ‘Blighted’.
BlightProperty ‘Blight’ can come in two forms: Generalised Blight and Statutory Blight.
Generalised Blight is the term used to describe the effect on property in areas when the proposal for a major transport (or other infra-structure) scheme is first announced. At this stage the precise route is not announced, there is just a generalised proposal indicating which areas are ‘likely’ to be affected by the scheme. The affect on the properties within the areas likely to be affected is that the demand and therefore the value of the propeties begins to drop; purchasers and more importantly lenders are less inclined to buy or to lend on a property that may have a compulsory purchase order imposed on it at anytime in the next few years or is affected by the increased traffice and noise that close proximity to the proposed scheme will bring.
This a particularly difficult time for the owners of the properties in these areas as they may not be able to sell their property and will not have any legal recourse against those that have caused the ‘Blight’ i.e. the Government or the Local Highways Authority. There is no statutory compensation for ‘Generalised Blight’). Further, there is no guarantee that their property will be affected, it is known for large schemes to be planned for many years and then abandoned without anything happening, or the route is changed. In these circumstances, the property has this ‘Blight’ for many years and then when it is decided that the scheme will not happen, the Blight is lifted, but there is no compensation for the difficult years in which the property owner experienced financial difficulties due to being unable to sell the property; or had to sell at a loss.
Statutory Blight is where a property is directly affected by a major transport or infra-structure scheme and as such is under a very real threat of having a compulsory purchase order imposed on it. These properties are referred to by the Government and local authorities as being ‘online’ and are ‘statutorily blighted’.
The owner of a property suffering from ‘statutory blight’ can serve a ‘Blight Notice’ on the Local Authority or Highways Agency ( or in this case HS2 Ltd) forcing them to purchase the property at the current market rate. There conditions that must be satisfied before a Blight Notice can be served: 1. ‘Qualifying Interest’ - The owner of the property must have an ‘qualifying interest ‘ in the property. A qualifying interest would be that of an owner-occupier, or the owner of a business with an annual rateable value not exceeding £34,800 per year or a owner-occupier of an agricultural unit. 2. Residency Requirements – An owner occupier of the property must be living in the property, as their main residence as the date on which the Blight Notice was served and for at least six months prior to the service of the notice. If the property is empty it must not have been empty for more than twelve months before the service of the Blight Notice and the owner must have run a business from the property for at least six months prior to the property becoming empty. The same rules apply to business premises and agricultural units. 3. Statutory Provisions of the 1990 Act - The Statutory provisions of the Town and Country Planning Act 1990 (‘the 1990 Act’) would have to be triggered. The provisions of the 1990 act are triggered only once the Secretary of State has announced the preferred route of the scheme and published draft orders for the scheme . 4. Efforts to sell the property must have been made – The owner of the property must show that they have made ‘reasonable’ efforts (for at least three months) to sell their house and have been unable to do so except at a significantly reduced value ( a value less than 85% of the property’s market value).
The Government have introduced the ‘express purchase scheme’ which will apply to all properties within the ‘surface safeguarded area’ (the scope of the safeguarding area will vary from one Local Authority to another and you will need to check with your Local Authority to find out if your property is within the safeguarded area or the HS2 website interactive plan at www.hs2.org.uk/safeguarding ). Under the express purchase scheme, if your property qualifies for express purchase, you will no longer have to demonstrate that you have tried to sell the property. Details of the express purchase scheme are available at www.hs2.org.uk/developing-hs2/property/express-purchase
Once the property owner has served a Blight Notice, whether or not compensation will be paid out, will be discretionary and each case is considered on its individual merits. If it is clear that the property will be directly affected by the scheme, a Blight Notice will in most cases be accepted if the conditions above, are satisfied. Where it is deemed that the land on which the property is situated is either not needed for the scheme or only part of it is needs, the Local Authority or government (or in the case of H2, H2 Ltd will challenge the Notice.
Current Statutory Compensation Provisions
The owner of a property which is ‘online’(directly affected by the Scheme) and your property is compulsorily purchased, is entitled to claim the open market value plus a home loss payment of 10% (up to a current maximum of £47,000). In addition the owner of the property can claim their reasonable moving costs together with the surveyors and legal fees and stamp duty on the property they have to purchase as a replacement.
If only part of the land is needed for the scheme, the owner of the property can claim the open market value of that part of the property together with the value of an resultant loss of value to the remainder of the properly. If only part of the land is needed for the scheme, but that part of the land represents a significant part of the property such as the garden, the owner of the property can ask the government to purchase the whole of the property. Tenants of properties are also afforded some compensation if they live in a property that has to be compulsorily purchased to make way for the scheme and may be entitled to a £4,700 home loss payment together with reasonable moving costs. Council tenants have to be rehoused by the Local Authority.
Owners of business and commercial property who occupy the property are entitled to an occupier’s loss payment and disturbance costs (this can include business losses).
If your property is not directly affected and does not need to be compulsorily purchased, the owner may still be able to obtain compensation for the adverse effects of the scheme such as noise, pollution and so on, under the 1973 Land Compensation Act, however HS2 will have to have been running for at least a year before the property becomes eligible. Government’s Proposals to deal with Property Blight Caused by HS2 The government have published some draft proposals known as ‘A Fair Property and Blight Deal for HS2’ under which they propose amendments and additions to the current statutory provisions: Streamlined advance purchase scheme – to enable property owners who know their property will be compulsorily purchased to sell their property and move before the property is compulsorily purchased.
A sale and rent back scheme – to allow people to stay in their homes up to the point where the land on which their property is situated is actually required for the construction of the scheme. There will be provisions for the property to be purchased for the market value and then rented back to the owners at a market rent.
A small claims scheme –a streamlined scheme to make it easier for people living in the area to obtain compensation more quickly than under the existing statutory provisions, for disruption through the noise, pollution and congestion caused by the construction of the scheme.
Settlement Documents – legally binding settlement documents confirming that HS2 will be responsible for any issues arising from subsidence caused by the tunnelling involved in the scheme and any consequent vibration. There will also be compensation for owners of properties directly above the tunnel where the government has to compulsorily purchase the subsoil of the property.
A refreshed hardship-based property purchase scheme- allowing those owners of properties who through no fault of their own have an urgent need to move but cannot sell their property.
Is Your Property Affected?
If you are unsure as to whether or not your property is within the HS2 zone of influence, you can check the interactive map on the website of HS2 Ltd (the government run company set up to manage the project) at http://hs2.org.uk/interactive-map.