Exceptional Hardship Scheme and Property Blight
This blog entry advises on options available for people whose property is affected by HS2 proposals.
The Exceptional Hardship Scheme (EHS) allows you to apply for the Government to buy your property and is currently open. It helps people who urgently need to sell their properties now and who have found that they are unable to do so because of the high speed rail proposals.
If HS2 proposals go ahead, statutory property blight provisions would apply to people whose property would need to be purchased in order to build or operate HS2. People who qualify can require the Government to bring forward that purchase.
The Exceptional Hardship Scheme
Since 20 August 2010, the EHS has been open for applications from owner-occupiers of residential, agricultural and some commercial properties.
To qualify, you need to fulfil a number of criteria. Your property must be either on or in such close proximity to the proposed route that it would be likely to be substantially adversely affected by the line, and you must have had no prior knowledge of the proposals before you bought the property. You must also be able to prove that you urgently need to sell your property and that you would experience exceptional hardship if you couldn’t.
In addition you must be able to demonstrate that you have made all reasonable efforts to sell your property at a price, that the property would realistically sell at if there were not plans to build a high speed railway. The property would need to have been actively marketed with at least one recognised estate agent for a minimum of three months. If despite these efforts you haven’t received an offer, or one that is within 85% of the property’s realistic unaffected value, you may qualify for the scheme if you also fulfil the other criteria.
An EHS panel – which is mainly made up of members who are independent of Government – will consider your application and make a recommendation to the Secretary of State for Transport on whether or not it should be accepted. The Secretary of State will then make the final decision. The whole process takes around three months from HS2 Ltd receiving an application and you receiving a decision.
If your application is successful, the Government will offer to buy your property at its unaffected market value – that is the value of your property as if there were no proposals to build a high speed rail line in the area. In order to arrive at our offer value, we will appoint two independent companies, one of which you can choose, to value your property. The valuations will be of how much the property would be worth if there were no proposals to build a high speed line in the area. The Government will make you an offer based on the average of the two valuations.
Once the Government owns the property we always manage it to ensure a minimum of disruption for local residents. We do this through our managing agent who secures and maintains the property while they market it for rental. Properties purchased through the EHS, are advertised on the following website: http://www.smithsgore.co.uk/property-to-rent
The Government hasn’t decided yet exactly when the EHS will end. It aims to announce whether it will go ahead with the HS2 proposals by the end of 2011. Following this, and if the Government decides it wishes to build the line, new arrangements would be launched to help property owners and we expect the EHS to end around that time.
You can find out more about the EHS and how to apply from the HS2 Ltd website. Alternatively, you can request a copy of the EHS Guidance and Application Form via the HS2 enquiry line, 0300 321 1010.
Property Blight arrangements if HS2 goes ahead
If HS2 goes ahead, statutory blight provisions would apply to people whose property would need to be purchased in order to build or operate HS2.
People who remain in their homes would, under current law, be able to apply for compensation for loss of value caused by certain physical factors – like the noise of trains – once the railway has opened and its actual impacts are known.
The Government is also considering the options for additional support arrangements, beyond what is required by law.
If the Government decides to go ahead with building a new high speed line, it is likely to bring in ‘safeguarding directions’. These would identify a zone alongside the route within which it might be necessary to demolish properties in order to build or operate the line.
Once this area is safeguarded, statutory blight arrangements would come into force. People whose property fell within the zone could then, subject to certain conditions, serve a blight notice on the Government requiring it to be purchased. This means they would not necessarily have to wait until the start of construction to sell their house to the Government. Of course property owners could also choose to own and live in their house until it was compulsory purchased (the exact time would vary depending on where the property was, but it would not be before 2015).
Those whose property fell outside the safeguarding zone would still be able to claim statutory compensation if their property suffered a loss in value due to physical factors – including things like noise, dust and vibration – caused by use of the new high speed line. This compensation could be claimed once the actual impact of the operations is known, from one year after the new high speed line has opened.
Property owners may also be eligible for compensation for the effects of construction. On top of this, the Noise Insulation (Railways and Other Guided Systems) Regulations 1996 require authorities to install additional noise insulation in certain circumstances.
Additional arrangements for HS2 (London to West Midlands)
The Government is currently considering the different options for additional support arrangements. Some possible approaches are described in Annex A of the “High Speed Rail: Investing in Britain’s Future – Consultation” document Annex A: Blight and Compensation.
These include ‘hardship-based’ schemes, of which the current EHS is an example, as well as ‘property purchase bond’ schemes where qualifying property owners would apply to the Government for a ‘bond’ or guarantee to purchase the property at a future date. Because this bond would be transferable to new owners, it may give prospective purchasers the confidence to buy, helping the market to continue to function.
The Government is also considering a ‘compensation bond’ scheme. This would give property owners a guarantee that, if their property were to lose significant value as a result of proximity to a new high speed line, they would receive compensation for that loss after the line opened. Again, the intention of the compensation guarantee would be to help the property market function as normally as possible.
The Government is keen to hear your views on these options and would consult on the details of any additional arrangements early next year.
Find out more
Additional arrangements – Annex A: Blight and Compensation from the “High Speed Rail: Investing in Britain’s Future – Consultation” document
Visit the HS2 consultation website for full documentation, maps of the proposed route, images and visualisations.
For details on compulsory purchase look at the Communities and Local Government booklet Compulsory Purchase and Compensation
Comment on twitter
To comment on this post on twitter, please use the hashtag reference #HS2_EHSandBlight