Written statement to Parliament

HS2 Phase One property

Outcome of the HS2 2013 consultation on property compensation for the London to West Midlands route and details of compensation packages.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The Rt Hon Sir Patrick McLoughlin MP

I am today (9 April 2014) announcing to the House the outcome of the 2013 consultation on property compensation for the London to West Midlands HS2 route (Phase One).

That consultation, which ran from 12 September to 4 December 2013, set out a package of assistance for owner-occupiers of properties affected by Phase One of HS2 that went beyond the legal requirements for compensation in recognition of the exceptional nature of the HS2 project.

While elements of today’s (9 April 2014) decision will be launched immediately, I want to make sure we get this decision absolutely right, so I will be asking for further views on the newer aspects of this package before we finalise it.

The details of the package are as follows:

  • Express purchase – this is being launched today (9 April 2014) and is for those people living closest to the line, in what is known as the ‘surface safeguarded’ area. Under this scheme owner-occupiers may be able to sell their home to the government, if they wish to do so at its full unblighted market value (as it would be if HS2 did not exist), plus 10% (up to £47,000) and reasonable moving expenses, including stamp duty.
  • Voluntary purchase - for people in rural areas outside the safeguarding area and up to 120 metres away from the line. Owner-occupiers in this area may be able to sell their home to the government for its full unblighted value at any time up until a year after the line opens. We intend for this to be launched later this year.
  • Need to sell – this scheme does not have a boundary and is available to owner-occupiers who have a compelling reason (including job relocation, ill health) to sell their house but are unable to do so because of HS2. The government would pay the full, unblighted value for these properties. We also intend to launch this later this year, when it will replace the exceptional hardship scheme which will continue to operate in the meantime.

All 3 options will be accompanied by a rent back option. This is for owner-occupiers who, having sold their property to government, would prefer to carry on living there and may be able to rent it back, subject to property suitability checks. This will also be implemented immediately.

These compensation arrangements incorporate a range of improvements to our original proposals, taking account of points made by members of the public, property experts and others during the consultation. For example, I have decided that the need to sell scheme, as the name suggests, will require applicants only to show they have a compelling need to sell, rather than demonstrating that they would suffer hardship if they could not sell.

In recognition of the exceptional nature of HS2, we are also considering going further than providing compensation and will undertake a further limited consultation on the following proposals:

  • As an alternative to the voluntary purchase offer, we are proposing a cash payment of between £30,000 to £100,000 – for owner-occupiers in rural areas outside the safeguarding area and up to 120 metres away from the line who don’t want to sell their home and move.
  • Home owner payment - this is proposed to apply to owner-occupiers between 120 metres and 300 metres from the route in rural areas. This could enable people in these areas to share in the benefits of HS2, which will run near them but will not provide them with a direct benefit. The details of (amounts and eligibility) any payments would need to be determined following consultation.

Initial thinking is that payments could be from £7,500 to £22,500 depending on how near the route the property is located. This would come into effect following Parliamentary approval of the HS2 route between London and the West Midlands.

These decisions and the forthcoming consultation do not apply to other proposed HS2 route sections. I intend to bring forward further proposals for supporting property owners alongside future decisions on extensions to the HS2 route.

In addition to these proposals, we need to ensure residents’ views have an effective way of being heard. HS2 Ltd will develop a residents’ charter, designed to help residents know their rights and will appoint an independent Residents’ Commissioner who will ensure that they adhere to the commitments made in the charter. The charter and commissioner will provide residents with a voice and representation.

Together, the charter and the commissioner will ensure that residents are informed of any developments fairly and efficiently. The charter will contain a number of principles against which HS2 Ltd will be measured in their communications with people affected by the development of the railway.

I have decided not to introduce a ‘property bond’ which was one of the proposals that was consulted on in 2013. I appreciate that this will disappoint many who were advocating such an approach. We studied the idea very carefully but felt that it was untried, would not facilitate the smooth operation of a normal property market and would add to uncertainty rather than reduce it.

I believe these proposals represent the best possible balance between properly compensating people affected by the line and providing value for money for the taxpayer. The voluntary purchase offer and the need to sell scheme are intended to be launched later this year, following the further consultation which I aim to commence shortly and intend to conclude before the end of the year.

A full description of these proposals is in today’s command paper, Property compensation consultation 2013 for the London to West Midlands HS2 route: decision document. I have published this report on www.gov.uk and provided copies to the libraries of both Houses.

More about the new property package of measures:

Published 9 April 2014