DeBrieF OPINION: Proposed Construction of HS2

Susan Warden – trainee solicitor in our Property department – discusses the proposed construction of HS2…

There’s no doubting that HS2 is dividing public opinion with the affect it’ll potentially have on communities being at the heart of people’s concerns.

The proposed construction is likely to have an impact on property prices along the route. The plan has been split into two phases: Phase One from London to the West Midlands and Phase Two from Birmingham to Leeds and Manchester. On 28th January last year, the government announced an initial preferred route for Phase Two and a public consultation followed in July last year. The actual route is not expected to be announced until 2015 and isn’t expected to be up and running until 2033.

The government will have compulsory purchase powers to facilitate the HS2 project by buying up land needed for the scheme, whether the owner wants to sell or not. If your land is selected for compulsory purchase then you will be entitled to compensation for the loss of your land.

However, uncertainty about which properties will be affected is likely to reduce the value of potentially affected properties until the actual route is announced. If the draft HS2 Bill, which MPs recently approved at its second reading, passes in its current form then this uncertainty will be amplified by the unprecedentedly wide compulsory purchase powers that would be granted to the government. These would potentially allow local authorities to buy properties that had not previously been affected. Although this bill relates to Phase One of the scheme, property values are likely to be affected on the assumption that similar measures will be included in the separate bill which will be brought in later by the government to allow the second phase to go ahead.

In order to ameliorate the consequences of this uncertainty, the government launched a discretionary Exceptional Hardship Scheme last year, which is expected to remain in place until 2016 for people affected by Phase Two. The scheme is open to eligible residential and small business owner-occupiers whose property value may be affected by the HS2 proposals and who can show that they need to sell before a final decision on the route has been made. By the start of April, 94 applications had been made under this scheme and eight purchases had completed for an average purchase price exceeding £514,000 per property.

Alternatively, from around the end of 2016, property owners may be able to use a ‘statutory blight procedure’ to force the government to acquire their property now rather than wait for the compulsory purchase procedure to take effect.

If you are attempting to sell property which may be affected by the HS2 proposals, it is important to take advice early on. This will help ensure smooth management of any extra complexities.

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