HS2 Phase 1 Compensation Consultation

HS2 Phase 1 Compensation Consultation

Following the last Compensation Consultation which concluded in December 2013, the Government announced it’s new compensation arrangements in April 2014.

The current consultation which closes at 23.45 hours on Tuesday 30 September 2014, concerns two new proposals announced in April 2014:

1.  Alternative cash compensation, and

2.  Homeowners payments.

Both of these proposals relate to rural areas. Whilst this process is about compensation for homeowners living near to phase 1, it is open to everyone.  The outcome will directly influence the compensation proposals for phase 2 so will affect all of us. It is vital that as many as possible respond to this consultation.

Below we have set out a brief overview of the compensation arrangements announced in April 2014.

HS2’s current compensation arrangements

1.     Properties within safeguard zone, (60 m each side of track). Express Compulsory purchase of property.  The Government confirmed that it will be prepared to purchase all qualifying owner-occupied property within the zone under an expedited process. This came into effect in April 2014.
2.    Properties within Rural Support Zone, (120m each side of track   proposed). Voluntary purchase scheme. Property owners between the safeguarded area and 120 m from the track will be able to ask the Government to buy their homes at the un-blighted market value. It is planned that this scheme will be open to applicants by the end of 2014.

 

3.    Properties outside the above zones A need to sell  scheme. Applicant must demonstrate a compelling need to sell their home and are unable do so because of HS2. This scheme will also come into force by the end of 2014 and replaces the previous exceptional hardship scheme.

 

4.    Properties within 1 and 2 above. A rent back scheme. This relates to properties that the Government has purchased under the above schemes. If the property is suitable for letting, the Government will consider applications from the previous owners to rent the property back under a Crown tenancy agreement.

 

The current consultation relates to two further proposals, the details of which are as follows;

  1. Alternative cash compensation.  An alternative cash offer to owner-occupiers within the Rural Support Zone (60m to 120m from the track) who do not wish to sell their home via the voluntary purchase scheme. They would be able to apply for an alternative cash offer valued at 10% of the un-blighted market value, capped between £30,000 and £100,000. If implemented this would come into force by the end of 2014 and be available to apply for until one year after the opening of HS2.
  2.  Homeowners payments.  A potential cash payment to rural owner-occupires who’s properties are outside the Rural Support Zone but within 300m of the track (120m to 300m). The Government are proposing that these payments would come into force upon Royal Assent to the HS2 Bill and remain until one year after HS2 is operational. They are also proposing that these payments be tapered, per property as set out below:
  • 120m to 180m          £22,500
  • 180m to 240m          £15,000
  • 240m to 300m          £7,500

The consultation contains only two questions, seeking views on each of the above proposals.

Full details of the proposals and consultation can be found at https://www.gov.uk/government/consutations/hs2-property-compensation-consultation-2014

Our response to these options

  • We believe that no one should be financially disadvantaged as a result of HS2. Including the far wider area during construction.
  • These proposals do nothing to help the property market or provide assistance to sell a blighted home. Blight is real, extensive and severe and goes far beyond the current schemes.
  • We believe there should be only one criterion used to calculate compensation payable to property owners, and that is whether or not their property has suffered a loss in value as a result of the plans for HS2.
  • Neither of the two proposals remedy the current deficiencies in the current compensation schemes. The result is that it leaves the vast majority of those blighted out to 500m and beyond, suffering a significant loss in the value of their property and having to bear that loss personally.
  • Following disclosures in response to Freedom of information requests, it was established that PwC , the advisors for HS2 ltd, estimates rural blight at 40% average loss out to 120m, 30% loss out to 300m and 20% loss out to 500m. They have also concluded that blight from HS2 would be at the upper level of what has been experienced in other schemes. Other experts consider that average losses will be greater then this and will be suffered over a much larger area.
  • PwC have also advised that blight is expected to stay at its worst until 2023.  They have also concluded that HS1 is not a comparator for assessing HS2, which is what the Department for Transport continue to do.
  • In relation to the Alternative cash compensation: the proposal is based on 10% loss and is capped. The cap is totally unjustified. We believe that any sum should be uncapped and be a realistic compensation figure based on the best estimates of blight in the zone.
  • In relation to the Homeowners payments: We believe that the proposed payments of between £7,500 to £22,500 are wholly derisory. They amount to just 1% to 3% of average property values next to HS2 and are a fraction of the expected losses, estimated by PwC for the 120m to 300m area, as averaging £184,000.
  • In any such scheme the payments must be larger sums and it must apply to properties beyond then the proposed 300m. PcW confirm that blight in the next rural ban, 300m to 500m, is also material. A previous CBRE study suggests that blight was equivalent to 20% for all properties out to 1km, in both rural and urban areas.
  • We continue to believe that the only fair compensation is for every blighted property to be subject of a property bond, guaranteeing the market value of each property. We believe that the previous decision to reject this should be revisited. DfT rejected it on the basis that the financial risks were too great. This was despite the fact that their advisors PcW had concluded that it would be inexpensive with a net cost of £30m (if successful and £158m (if it were not), which is under 1% of the HS2 subsidy.
  • We believe that there should not be a fixed compensation zone based on the distance from the track. Upon evidence from an accredited surveyor that a property has been devalued by HS2 a property bond or appropriate compensation should be issued.
  • We are concerned that the compensation scheme was designed to meet a budget and not to provide fair compensation to all those affected.
  • The previous ‘exceptional hardship scheme’ as been replaced with the ‘need to sell scheme’. However the qualifying criteria from the previous scheme remain largely unchanged. If as the Government claim, compensation is to be full and fair and for those most directly affected, the inclusion of hardship criteria is inappropriate. We believe that if you are affected, you should be compensated regardless of your personal circumstances.
  • We believe that if the Government can afford to build HS2, they can afford to fairly compensate those who are affected.

If you agree with our views, please feel free to use any of them in your consultation response.

How to respond

You can respond online at https://HS2Property Consultation2014.dialoguebydesign.net  by email to HS2PropertyConsultation2014@dialoguebydesign.com or by post to Freepost RTET-YGJB-GUAY, Property Compensation Consultation2014, PO Box 70178, London, WC1 9HS

If you prefer, both STOPHS2 and HS2 ActionAlliance have templates on their websites that can be completed and submitted direct. Just follow the links on this website to access their sites.

If you would like further information or assistance please contact a member of your action group.