Announcement of compensation schemes for homeowners in areas neighbouring path of HS2

Friday 16 January 2015

The Government has today announced details - long awaited by homeowners and estate agents - of compensation schemes for property in areas neighbouring the path of High Speed 2 (HS2) Phase 1.

Rt Hon Patrick McLoughlin MP (Secretary of State for Transport) announced the Government’s package of measures as the final outcome of two consultations:

"The proposal for the alternative cash offer (now named the cash offer) and homeowner payment will be introduced. These schemes aim to help maintain the cohesion of communities along the route of Phase One of HS2 and provide an early share of the benefits.

"I can also announce that from today HS2 Ltd will accept applications for voluntary purchase, the cash offer and the need to sell schemes. These schemes supplement those launched earlier this year, namely express purchase and rent back. The result is an exceptional package of measures for an exceptional project. Over 2500 dwellings are within the express purchase area, rural support zone (within which the voluntary purchase and cash offer schemes are available) and homeowner payment bands. In addition, the need to sell scheme will independently consider applications regardless of the distance from the railway."

Mark Hayward, Managing Director of NAEA responded:

“The Department of Transport’s announcement today bringing clarity to provide assistance to owner occupiers along the line of route for Phase One of HS2 will mean those impacted will breathe a sigh of relief. It’s only fair that home owners in peripheral areas of the proposed HS2 route are compensated appropriately and these new measures mean that there are now a number of options available to them, including the opportunity to sell their property to government and then rent it back. After a long period of uncertainty, this will help people along the route plan for their futures.”

Details of the full package are available here:

· Express purchase –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 there were no plans for HS2), plus 10% (up to £49,000) 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 (this is the area defined as the rural support zone). Owner-occupiers in this area will be able to sell their home to the government for its full unblighted value at any time up until one year after Phase One first opens for public use.The Rural Support Zone Guidance notes and application form are available here.

· The cash offer (known as the alternative cash offer during the consultation). This gives rural owner-occupiers within the rural support zone two measures to choose from, if they wish: selling their property to the government for its full unblighted market value under the voluntary purchase arrangements described above or remaining in their home and receiving 10% of that value. This payment is a minimum of £30,000 and is capped at £100,000. This scheme will be available until one year after Phase One first opens for public use.

· The need to sell scheme– this scheme does not have a boundary and is available to owner-occupiers who have a compelling reason to sell their house (for example this might be as a result of job relocation or ill health) but are unable to do so because of HS2. The government will pay the full, unblighted value for these properties. This scheme replaces the Phase One exceptional hardship scheme (EHS) and those EHS applications that have not been consider by the panel will automatically be transferred to the need to sell scheme. This scheme is available in both urban and rural areas. The Need to sell Guidance notes and application form are available here.

· The homeowner payment scheme will give rural homeowners outside the voluntary purchase area but within 300 metres of the line the opportunity to share early in the benefits of HS2. These payments will be available following Royal Assent of the hybrid Bill for Phase One and will be tapered as follows: owner occupiers between outside the rural support zone and within 180 metres of the centre line of the railway will receive £22,500, those beyond this and within 240 metres £15,000 and those beyond this and within 300 metres £7,500.

The express purchase, voluntary purchase and need to sell schemes are all accompanied by a voluntary rent back option: owner-occupiers who, having sold their property to government would prefer to carry on living there may be able to rent it back, subject to property suitability checks.

In addition, as part of the desire by HS2 Ltd to improve communication with residents and communities near to the route of the railway, it has been agreed that a Residents’ Charter will be introduced. This will help to ensure that residents are treated in a fair, clear, competent and reasonable manner. It will embrace a number of key principles:

· Discretionary property packages will be communicated clearly, in the plainest, non-technical language possible

· Individuals will be offered a single named case officer.

· Individuals will be offered the opportunity to meet in private with a property specialist from HS2 Ltd to explain the discretionary and statutory measures.

· HS2 Ltd will commit to a reasonable response time for all property related enquiries.

This package of measures will be administered by HS2 Ltd under these guiding principles and will signal the beginning of a new relationship with the communities along the route of Phase One of HS2.