Blight and Compensation – Overview

For over two years HS2AA has been campaigning for a fair deal for those affected by property blight from HS2. Our campaign has focused on those householders whose property is not required to build HS2 but who will be affected by it. People in this position are said to be subject to “generalised blight”.

This is particularly important because:

The experience of constructing HS1 indicated that generalised blight is a significant issue for householders and communities and the existing legal arrangements designed to deal with this issue are not sufficient.

Current statutory compensation rules are particularly difficult to navigate, unfair and require householders to wait until HS2 is operating (in 15yrs+) and then make an application to the Lands Tribunal for compensation. Such applications are complex and bureaucratic and limited to the physical impacts on your property (eg noise, dust, light pollution) and have nothing to do with the loss in value in your property as a result of the line being built.

Government attempts to deal with this issue have been based on the assumption that compensation should be limited to a hardship based scheme (ie just to those people who can show they have a pressing need to sell, as well as meeting other criteria eg close proximity to the line). We believe this to be fundamentally unfair. We know HS2 affects a large number of people – over 170,000 properties (homes, businesses, farms etc) for Phase 1 alone are within 1km of the line or 250m of a tunnel. By restricting the arrangements to ‘hardship’ criteria the Government’s approach is only covering a tiny minority of those affected and suffer material loss through no fault of their own.
 

Principles

HS2AA believe that fair compensation arrangements for communities impacted by HS2 should reflect the following principles:

- Schemes are demonstrably fair and prevent individuals from suffering any loss as a result of a project purported to be in the national interest.

- They provide reassurance to reduce the uncertainty that causes stress and property blight.

- Schemes fully support those who want to move, re-mortgage, stay, and/or suffer construction.

- All losers and losses are covered - business, agricultural units, homes and communities and those people living in private, social and sheltered housing.

- Schemes are open and transparent in operation and include appeal procedures.

- They are tailored to the circumstances and unusually long time periods involved with HS2.
 

What’s Wrong with Hardship Scheme Approach?

We think the current approach isn’t right for the following reasons:

1. A hardship scheme supports only a minority of those who suffer loss in property value. Any scheme for which some – or indeed the great majority – are not eligible has serious deficiencies.

2. It traps most affected people in their properties – losing the freedom to move or remortgage without suffering serious financial loss for 15-20 years.

3. Generalised blight is exacerbated by the knowledge that losses would not be compensated when people want to sell (it is knowledge of full compensation for all those affected that injects confidence into the property market and controls blight).

4. The property market is paralysed, as sales crystallise losses in property values.

5. People will lack the very reassurance Government claim to offer ie that of fair compensation, – either they know they will not qualify or can’t be sure they will.

Government Action to Date

Unfortunately to date the Government has not faced up to its responsibilities to those communities which are impacted by blight. This was in marked contrast to what we expectedcwhich was a fair compensation scheme for everyone who would suffer a significant loss in the value of their property, and that addressed the particular nature and circumstances of blight from HS2.

The Government’s 2011 Consultation on high speed rail covered the generalised blight issue and it presented three options for those whose properties are affected by HS2, one of which was to be taken forward. The Government’s own figures indicate 98% of people responding to the consultation and who specified their preferred approach opted for the property bond. By contrast less than 30 people out of 55,000 opted for a hardship based approach.

In 2012 Justine Greening announced what she termed a ’fair property and blight deal’ ’to address any blight caused by its proposals for HS2 and to reassure property owners’:

This consisted of:

1. A streamlined purchase scheme for statutory blight ie compulsory purchase

2. Sale and rent back for those in safeguarded area ie land required to build HS2

3. Streamlined small claims scheme for construction damage claims

4. A package of measures for those being tunnelled under eg before and after surveys

5. A ‘refreshed hardship property purchase scheme’ for urgent sales and ‘generalised blight’ ie those properties that are affected but are not required for HS2

More details can be found at Justine Greening’s ministerial statement.

The Government announced plans to consult on the detailed rules surrounding its preferred schemes for Phase 1. This consultation was originally scheduled to start in spring 2012, but was delayed and began on 25 October 2012 and closed on 31 January 2013. You can read the HS2AA response here.
 

Current strategy

HS2AA believes the Secretary of State’s 2012 decision was fundamentally unfair, unlawful and should be urgently reconsidered.

First, litigation. We didn't believe the Government acted lawfully in its January 2012 decision. We commenced judicial review proceedings and the judge agreed with us, saying the Government's actions were "so unfair as to be unlawful" This court win has given everyone, including the Department for Transport, an opportunity to think again and create a framework which delivers fair compensation.

Second, campaigning for Property Bond. We are continuing to campaign for the Property Bond. Our campaigning on this issue to date has been in collaboration with other groups arguing for the same/similar outcomes eg NFU, 51m, Country and Business Landowners Association, Council of Mortgage Lenders. We are regularly in contact with members of the House of Lords, MPs (whose constituencies are impacted by HS2) to press home our case and using the MPs Compensation and Mitigation Forum. A briefing sent to MPs on the Phase 1 and Y is attached at Annex A. A presentation was made to the MPs Forum in April 2012 (read it here) with AGAHST.

Third, improving what’s offered. HS2AA is pushing for the existing rules to be changed: as long as a hardship principle remains at its core any scheme is defective and inappropriate. We are trying to get the best out of future Government proposals by pushing for steps like removing ‘hardship’ from the chosen approach and improving other areas of compensation. For more details of this see Annex B.

Fourth, other compensation areas. HS2AA are working on the principles that should apply to the other areas of compensation. More details can be found at Annex C.

If you want further information on our work on compensation please look at the following pages
Information provided for the 2012 Phase 1 Compensation Consultation

Compensation update March 2012
Compensation update Feb 2012