HS2: Knight Frank answers six burning questions landowners want to know
What do recent changes to Phase Two of the HS2 train line mean for land and property owners? We ask the experts to find out more.
5 minutes to read
The Prime Minister announced on 4 October 2023 that Phase Two of the High Speed Two (HS2) train line from Handsacre, north of Lichfield, to Manchester, would be scrapped.
As a result, the Department for Transport (DfT) has confirmed that all work on Phase 2a will stop, including land acquisition. But what does this mean for land and property owners left in its wake?
Currently, the only guidance available to refer to with regard to the disposal of surplus land is the Phase 2a Information Paper: C6 Disposal of Surplus Land. However, this paper was produced to deal with surplus land post the completion of HS2 Phase 2a, but it does provide an indication of what the process may be post the cancellation announcement. There will be a huge amount of work for HS2 Ltd to get through to put in place a programme to enable the transfer of land and property back to previous or even new owners. It is expected that this will take many months.
In the meantime, the following questions and answers aim to provide some guidance for those who may be affected by the decision.
HS2 has taken my land, but it is no longer needed. What will happen to my compensation claim for its value?
Compensation for the land taken is based on the price it would have sold for in the open market on the day that it was taken, assuming that HS2 had been cancelled. Unusually, that has now actually happened in Phase 2 (subject to confirmation of some areas), so your claim is unaffected.
If HS2 no longer needs my land, will they return it to me?
If your land is no longer needed, HS2 may be obliged to offer it back to you under the ‘Crichel Down’ rules. There are some exemptions, but unless those apply, the former owners or their successors will be offered a right of first refusal. The C6 information paper states that: “in accordance with the Crichel Down Rules, and subject to key Guiding Principles set out in this paper, landowners may be offered the opportunity to buy back land, at market value, that has been compulsorily purchased from them”.
If the land is offered back to me, how much will I have to pay?
The land will be offered back to you at its market value, assessed at the time it is offered back.
If the land is offered back to me, when will that happen?
The government has indicated that surplus land taken for Phase 2a will be offered back sometime soon, although we don’t yet have a definite timetable. As of October 2023, the government has said property no longer required will be sold, and a programme is being developed. It is not clear how long it may take, but it could take several months due to complexities and the HS2 track record.
Land taken in advance of statutory powers for Phase 2b – which had not yet been granted powers – under the Statutory Blight (TACP act) brings forward compulsory purchases and will offered back to previous owners. But if purchased under discretionary schemes (e.g. need to sell scheme, market value, usually houses), they are not obliged to offer back the property; such is the nature of the schemes. These will be retained until the government decides on what they will do instead. That is likely to be sometime next year or possibly later.
The land taken by HS2 has severed some of my other land, and I understand that I would be compensated for its reduction in value. Will I still be compensated for the severance, or will I have to return that compensation if it has already been paid and I re-purchase that area and access is returned?
The severance claim is likely to be unaffected, as compensation for severance is assessed on the day that it occurred, taking into account only the information that was known or which could reasonably have been foreseen at that time. The cancellation of this part of HS2 was not expected, so it must be ignored.
The construction and future operation of HS2 would have devalued my retained property. If HS2 is not going to be built, am I still entitled to compensation for this ‘injurious affection?
Surprisingly, the answer appears to be that you are. As with severance caused by the taking of some of your land, injurious affection is normally assessed on the day the first land was taken and takes account of the construction and expected future operation of the entire scheme, including works undertaken on neighbouring land, using all known and foreseeable information at the valuation date, which will be prior to the cancellation. The cancellation of a large part of a major project like this, at this late stage is simply unprecedented, and the compensation code is not set up to deal with these circumstances.
Conclusions
Before any selling back of land occurs, the safeguarding directions need to be removed - the planning rules stopping development on the route for anything else.
Tim Broomhead, in Knight Frank's Compensation Department, explains that: "In property terms, this will mean that we won't be able to obtain Blight Notices for clients who have land affected by the scheme. They still may not be able to sell because of the footprint of the scheme." He continued: "It is unprecedented for a large scheme like HS2 to be cancelled after such a significant programme of land acquisition. The return or sale of unneeded property from the HS2 project will throw up novel and potentially complex property and valuation issues not necessarily envisaged by the Critchel Down Rules. I predict that HS2 land disposals will take some considerable time to formulate and for the government to execute."
If you are affected by any of the issues as a land or property owner, then for further advice, please contact:
Tim Broomhead
Partner, Compensation Department
Or
Jonathan Scott-Smith
Partner, Compensation Department