HS2: New discretionary compensation package launched

These discretionary measures are in addition to the existing statutory compensation schemes - some of which will only apply once HS2 is operational - that are generally considered insufficient for an infrastructure scheme of the scale of HS2.

The package consists of five elements:

• Express purchase – for owner-occupiers in the safeguarded area (approximately 60m from the railway in either direction), or the owner of a small  business or agricultural property.

• Voluntary purchase – voluntary purchase to assist owner-occupiers in rural areas who live outside the safeguarded area but within 120m of HS2.

• Need to sell scheme – for owner-occupiers who need to sell. This scheme has no outer boundary.

• Rent back – for those who sell their property under an HS2 compensation scheme but want to rent it back and live in it.

• Home owner payment – for properties in rural areas 120-300m from HS2 in phase 1. To offer a lump sum cash payment to owner occupiers on a sliding scale – to be consulted on.

The creation of a Residents’ Charter and the appointment of an Independent Residents Commissioner were also announced.

HS2 Ltd said the charter will embrace the following key principles:

• Property packages and other measures will be communicated clearly

• All communication will use plain non-technical language

• Individuals will be offered a single named case officer with direct contact details

• Individuals will be offered the opportunity to meet in private with HS2 property specialists

• HS2 Ltd will commit to a reasonable response time for all property compensation-related enquiries.

However, the government has ruled out the introduction of a transferable property bond that organisations like the CLA said would add confidence to property markets along the route.

James Del Mar, Head of Knight Frank’s HS2 team, said:

"Many of those affected by HS2 will feel this package is still inadequate given the disruption that HS2 will cause."

“But at least it will now be easier for people to work out which compensation route is best for them when making plans for the future (see our guide below), although the fact that some of the new proposals need to be consulted on further before they are introduced will prolong the agony for some.

“Although the Express Purchase scheme will be helpful for many of those affected, it is still a version of the Statutory Blight process and applications will need to be filled in carefully, particularly for properties that do not fall 100% within the safeguarded area. Agreeing fair levels of compensation for farms and businesses could also involve detailed negotiations and the need for expert advice.

“Hopefully the Independent Residents Commissioner will have the teeth to ensure that those affected are treated fairly and their claims handed in a timely and professional manner.”

What compensation measures apply to me?

I own a house, farm or small business within the Safeguarded Zone (generally 60m for the centre of the track)

The Express Purchase Scheme is a relaxed version of the existing Statutory Blight process where property owners apply to the government to acquire their properties for their un-blighted open-market values. A decision will be made within two months and owners have three years to sell their property once their blight notice is accepted.

A home-loss payment equivalent to 10% of its value (up to £47,000) and reasonable moving costs including stamp duty will also be payable.

Where only part of the affected property is within the safeguarded zone, the Express Purchase option could still apply, but only if over 25% of the property is included in the zone.

Those with property above the deep-bored tunnelled sections of HS2 will not be eligible for Express Purchase.

I live outside the Safeguarded Zone, but within 120m of the centre of the railway line

Eligible owner-occupiers in rural areas will be able to apply to the government to buy their properties for 100% of its un-blighted open-market value as part of a new Voluntary Purchase proposal.

Those who satisfy the criteria, but do not want to sell can apply for a compensation payment equivalent to 10% of the un-blighted open-market value of their property (from a proposed minimum of £30,000 to a maximum of £100,000). Both these proposals are subject to consultation.

I live in rural area between 120m and 300m from the route

The government is planning to consult on a home-owner payment of £7,500 to £22,500 depending how close people live to the route.

I live in a rural or urban area but won’t qualify for any of the purchase schemes mentioned above

A new “Need-to-Sell” scheme will be available on a case-by-case basis for those living along the entire route of HS2 who can prove they have a “compelling” need to sell their property, but cannot do so due to the proposed railway, having marketed their homes for at least three months.

The government hopes to introduce this by the end of 2014.