HS2 compensation

hs2 compensation

HS2 Compensation

"Knight Frank is one of very few major firms of property consultants that did not apply to work for HS2 Ltd, the organisation charged by the government with delivering HS2, and therefore has no conflicts of interest. 

"Right at the beginning we made a conscious decision to represent only those adversely affected and not to even apply to join HS2 Ltd’s panel of consultants, which now includes most of the country’s large surveying practices."

James Del Mar, Head of HS2 Team

Now that the route for Phase 1 of HS2 has been Safeguarded, it is possible for affected property owners to serve the government with a Statutory Blight Notice.

This area of compensation is complex so Knight Frank’s HS2 team has prepared the following Q&A guide to Safeguarding and Statutory Blight

What is “Safeguarding”?

It is a process that effectively protects the route of HS2 from any planning applications or developments that could adversely affect its construction or use.

Has all of HS2 been Safeguarded?

Only Phase 1 (London to Birmingham) has been Safeguarded so far. The route for Phase 2 (Birmingham to Leeds and Manchester is still under consultation. The sections of Phase 1 through Bromford and Ealing in London  have also not yet been Safeguarded, pending a decision on whether there should be bored tunnels in these locations.

How can I find out if my property is in the Safeguarding Zone?

The zone broadly covers 60m either side of the route, but detailed maps are available on the HS2 website www.hs2.org.uk

Does Safeguarding mean HS2 is definitely going to be built?

No. The Hybrid Bill that will create the legal framework for the construction of HS2 still has to pass through parliament. Although HS2 still enjoys official cross-party support, if sufficient MPs vote against it the bill could be blocked. This or the next government could also decide not to proceed with the scheme.

Does Safeguarding mean the route for Phase 1 of HS2 has definitely been finalised?

Not completely. The government says the route could still be refined in response to “engineering developments, the draft Environmental Statement consultation and the parliamentary process.” Major changes, however, would seem unlikely at this stage.

What does safeguarding mean for property owners along the route?

It is important because it means the owners of property within or partly within the Safeguarding Zone can now serve the government with a Statutory Blight notice.

What is a Statutory Blight?

It is a process that allows affected owners to sell their property to the government for its un-blighted  open-market value – i.e. what it would be worth if HS2 hadn’t been proposed.

Who can serve a Statutory Blight notice?

  • Owner-occupiers of residential property within, or partly within, the Safeguarding Zone.
  • Owner-occupiers of commercial property with an annual rateable value not exceeding £34,800 within or partly within, the safeguarding zone.
  • Owner-occupiers of agricultural units including a house within, or partly within, the Safeguarding Zone.

I own a farm on the route. Can I claim for just part of my land?

No. Statutory Blight notices can only be served for a whole property. You can make a claim for your whole farm, but this could be refused. On a case-by-case basis the government may agree to acquire parts of a farm.

What about if my property is above a tunneled section of the route?

In this case only the subsoil may be Safeguarded to prevent the construction of buildings with deep foundations. The government says it does not plan to acquire above-ground property in these areas, which are marked separately on HS2’s Safeguarding maps.

I qualify, is there anything else I need to do before serving a notice?

Currently, you must have made “reasonable endeavours” to sell your property before serving a notice. The government says it hopes to remove this requirement by early 2014 after a consultation period.

How long does the process take?

The government has two months from receipt of a notice to accept it or not. You may also need to allow a period of time to market your property prior to issuing a notice to prove it cannot be sold for its un-blighted value. Once a notice has been accepted it would be prudent to allow three months to agree an acceptable purchase price with the government.

If my notice is accepted what compensation will I receive?

  • The open-market, un-blighted value of your property.
  • A home-loss payment of 10% of the value of your home (up to £47,000)
  • Reasonable moving costs and professional fees.
  • Compensation for business losses due to relocation or extinguishment is awarded on a case-by-case basis

What happens if my notice is accepted, but I change my mind and no longer wish to sell?

In Law, a Statutory Blight Notice, once accepted, cannot be withdrawn. It remains to be seen, however, if HS2 Ltd would allow a successful notice to be withdrawn and renegotiated.

What can I do if my notice is rejected?

If you don’t agree you have two months to make an appeal to an Upper Tribunal.

Are any other compensation schemes available if I don’t qualify for Statutory Blight?

Currently, the only other option for those outside the Safeguarding Zone is the Exceptional Hardship Scheme (EHS). This applies to homeowners who need to sell their properties due to exceptional circumstances and cannot achieve an acceptable price due to the HS2 scheme. It is, however, a discretionary scheme and the government has refused a significant number of claims.

The government had also proposed a raft of other discretionary compensations schemes, but a Judicial Review brought by opponents of HS2 ruled that the consultation process for this had been inadequate. A new consultation is due to open shortly.

If you are in the Safeguarded area and cannot serve a Statutory Blight notice you can still try to negotiate a sale and compensation package with the government on an individual basis.

If I don’t serve a Statutory Blight notice and the government needs to buy my property to build HS2 what will happen?

If the Hybrid Bill enabling the construction of HS2 goes through parliament (Royal Assent is scheduled for 2015) then the government can start issuing Compulsory Purchase Orders to affected property owners. This process is unlikely to happen until 2016.

What happens if some of the land which I have sold to the government is not actually needed for HS2?

Generally, land has to be offered back to the original owner, under something known as Crichel Down Rules, before being put on to the open market.

Who will pay my professional fees?

Reasonable professional fees relating to compensation claims can be reclaimed from HS2 Ltd.

How can I get more advice?

Please contact james.del.mar@knightfrank who heads up Knight Frank’s specialist HS2 property team

Compensation and Compulsory Purchase legislation is archaic and complex so this leaflet is not meant as a comprehensive guide. Please do get in touch using the contact details overleaf if you need further information on any aspect of HS2. You can also sign up for our HS2 alerts by visiting knightfrank.co.uk/hs2, following us on Twitter @KnightFrankHS2 or visiting the Knight Frank blog.

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