The northern routes for HS2 have been confirmed, removing doubt about the location of the line from Birmingham to Leeds. Landowners along the route will have land compulsorily purchased to build the railway, and the announcement will have immediately blighted their properties. But many landowners are still unsure how they will actually be affected or compensated.
The law surrounding compulsory purchase is covered by a minefield of legislation that has been added to and adapted since the original Land Clauses Consolidation Act 1845, and although it was recognised by the Law Commission’s report on Compulsory Purchase (2001) that the law needed streamlining, successive governments have chosen to put any rewriting of the law on the backburner, and have instead added to the legislation through bills such as the Localism Act (2011) and the Neighbourhood Planning Act (2017).
The High Speed Rail (London-West Midlands) Act 2017 was passed earlier this year, but although the act has yet to be extended to cover the North West and Yorkshire routes, HS2 has already started to contact landowners to begin survey work, compensating landowners with £1000 for these arrangements. If land is let, the suggested compensation split is £750 to the tenant with the remaining £250 used to compensate the landlord. For houses being compulsorily purchased along the HS2 route, the compensation being currently paid is the value of the house, plus 10% and additional relocation expenses.
Merryweathers have already been involved in assessing HS2 compensation for many houses within the safe-guarded zone around the Rotherham area of the route. Twenty cases have been assessed since October 2016, with more in the pipeline, and offers had been secured by the end of June, highlighting the pace at which HS2 is currently settling claims.
Peter Horne, our most experienced rural surveyor, was the keynote speaker at the CLA’s meeting on HS2 within Yorkshire. The meeting on 28th June in Hooton Pagnell, was held to advise landowners on the HS2 process and how they may be affected by the scheme. With the likelihood of land being taken by compulsory purchase, Peter Horne delivered a speech about how landowners can ensure that they receive the correct compensation for their personal situation and how to ensure that the works cause them minimum disruption.
So how is compensation calculated?
Compensation will be based on the market value of the land taken (plus 10% in the case of HS2 compensation) based on its value in the “no-scheme world” i.e. the market value of the land if the scheme did not exist and wasn’t blighting its value. This is based on the land’s existing use and does not account for any uplift in value that could happen based on the scheme being implemented. If you feel that your land is likely to have benefitted from an alternative future use, such as future housing, then it is possible to apply for a certificate of alternative development, which can then be used to apply for compensation at a higher rate.
Compensation can also be claimed for “Severance and Injurious Affection”. Severance means that you can be compensated for the loss of your land, with injurious affection meaning you can be compensated for the reduction in value of your now smaller holding. You can also be compensated for disturbance which provides for a loss in value of your property from the noise, dust, closeness of the scheme. From a compensation point of view, it is better to have land taken than to only be affected by the disturbance (which will also be compensated for, but with much lower payments). For all cases, landowners are advised to keep an accurate diary of all conversations (both face-to-face and over the phone), meetings, letters and other encounters. Photos are a valuable way to evidence work, especially for disturbance claims, or take a video and say what is happening – mobile phones are an excellent tool for this.
How will the compulsory purchase be handled?
HS2 will serve a Notice to Treat, which defines the people involved (HS2 and the owner/tenant) and the area of land the notice applies to, which then entitles the owner to make a claim for compensation. A counter-notice can be served, although if you are within the area of the published route, resisting the work will be futile as the legislative Acts will allow HS2 to compulsorily purchase land that is not achieved through the Notice to Treat process. In our experience, it is beneficial to have a positive working relationship with the scheme, as you are more likely to get your requests granted.
It is also important to remember to seek help if you are finding the process daunting or stressful. Specialists in helping landowners who are faced with compulsory purchase, such as Merryweathers, can help you to understand what is happening and to smooth out the process. And there is no need to worry about our fees, as HS2 pay the fees of professional advisors, on top of any compensation to which you are entitled. It is therefore important to engage the help of an experienced land agent to act on your behalf. At Merryweathers, our land agents are not only experienced, but have kept up to date with all the recent changes to compulsory purchase and compensation through attending RICS training sessions lead by Charles Cowap – a leading professional in this field, who lectures on this subject at Harper Adams University.
What should you be considering in your compensation claims?
Think about the nature of your business and what losses you may be suffering. Are you losing a building and will you require a replacement, or just compensation for its loss? Will you need to reorganise your land holdings and how they are used? What accommodation works will you need to ensure you can still operate your business – how will you access your fields on the other side of the works, how will you move livestock or get machinery to fields for harvesting or field preparation and spraying? Will field drainage be affected, or your underground irrigation pipes?
It may also be appropriate to reorganise the ownerships of your holding to maximise the compensation, especially if the farmhouse and land are in different ownership, as this will affect any claims made regarding injurious affection. It may also be wise to merge the interests of the landlord and tenant to improve the compensation for both parties. Also consider if the land has “hope value” by reviewing your council’s Local Plan and apply for a Certificate of Appropriate Alternative Development”, and if you have minerals worth exploiting this should be prioritised before the notices to treat are served by HS2.
Key points to remember:
- Compensation will not make you richer – it is a tool to financially compensation your loss and return you to the same position compared to before the scheme started – in monetary terms.
- Keep a record of works and conversations – it is much easier to make a claim for compensation if you have evidence to substantiate your claims.
- Be realistic when making requests for accommodation works and try to maintain a positive working relationship with HS2 and their employees.
- Seek advice if you are unsure of how HS2 is going to affect you, and what compensation you are entitled to.
- Employ an experienced land agent to support you, as their fees are paid for separately to your compensation.
Peter Horne, FRICS FAAV is our most experienced land agent and rural surveyor, with over forty years’ experience supporting farmers and landowners in and around Yorkshire.
Elizabeth Copeland, MSc has recently qualified from Harper Adams University and specialises in compulsory purchase, landlord & tenant agreements, planning and estate management.
At Merryweathers, we have the knowledge and experience to help you, whatever your needs.