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HS2 Property Compensation Consultation 2014

Mike O'Brien has responded to the government consultation on its scheme for property compensation for HS2. An-HS2-protest-sign-in-We-007.jpg


The main points of his response are set out below

General points

  1. The scheme involves baffling thresholds and limits which often do not relate to the losses faced by people and do not appear to accord with the governments own evidence.
  2. There is no help for business or for the local communities affected by construction and disruption. 
  3. There is no proposal to deal concerns that Local Councils will lose income and council taxpayers could therefore lose services or face increased Council tax as a result of HS2.

Government Consultation Questions

Q1: What are your views on our proposals for the alternative cash offer?

  1. The government cash offer should not be based on the higher of the two valuations rather than an average of two valuations because the valuers must be government approved, therefore it is reasonable for any difference in valuation be decided in the owner-occupiers’ favour.
  2. There needs to be an appeal mechanism for valuations by a government approved valuer. Given that this affects fundamental property rights article 5 of the ECHR is likely to be breached by a failure to provide an appeal mechanism.
  3. Those who owned property when HS2 was announced should not be the only people who are eligible for the alternative cash offer because some people have moved into property after that date but were unaware of the impact HS2 would have on the property, therefore the relevant date should be Royal Assent.
  4. People who have accepted the alternative cash payment should be eligible for the voluntary purchase scheme (obviously less any money they received under the alternative cash payment scheme) if they become aware that their property will be affected by the construction or the route in a way that was not known when they accepted the alternative cash payment.
  5. The scheme ought to be available to properties more than 120m from the centre of the HS2 line because the effects of HS2 can extend much further than this. The Exceptional Hardship Scheme  accepts cases under up to 1km from the line. It is arguably ‘Wednesbury unreasonable’ to have such a large difference between one compensation scheme and another without providing a rational justification for the difference.
  6. Similarly the 10% figure is not explained in clear and rational terms. The Report on the Property Bond Scheme by Price Waterhouse Cooper says
    • Properties up to 500m from the line were likely to suffer a reduction of up to 20% in value and a 20% fall in demand.
    • Properties 300m from the line were likely to reduce in value by 30% with a 40% reduction in demand.

The government is likely to face a legal challenge on its proposed arbitrary and unexplained difference.

Q2: What are your views on our proposals for the homeowner payment?

  1. The government claims all areas will benefit from HS2 but the KPMG Report shows 50 areas will be disadvantaged and there are no compensation proposals to address the scale of the measures needed to compensate those 50.
  2. I repeat para 4.a. above on the issue of eligibility.
  3. The report is likely to underestimate house price inflation because it is predicted to rise by more than 8% nationally. This issue needs to be reassessed.
  4. The “Need to Sell” scheme is too narrow.  People should be compensated if they want to move.
  5. The 300m limit is clearly too narrow. The PWC report identifies a price reduction for homes at 500m of up to 18% so the scheme should be extended.

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