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HS2 Consultation Question 7 – the Property Bond Option

Last year, during the Exceptional Hardship Scheme consultation, HS2 Action Alliance researched different property blight schemes developed by a variety of organisations.  This is what they have to say about question seven from the HS2 Consultation:

Q7.  Do you agree with the options set out to assist those whose properties lose a significant amount of value as a result of any new high speed line?

We were promised a compensation scheme, but have only been offered options. HS2 Action Alliance support the Property Bond option, but it should be announced now, and should apply to all whose properties lose value as a result of the Government proposals for HS2.

On the Government’s approach to compensation:

  • HS2 Action Alliance agree that people whose properties lose value because of HS2 should be compensated fully for their losses, but it is unjust if restricted to those suffering significant loss in value
  • HS2 Action Alliance agree that it is essential that people affected or potentially affected are given reassurance that they will be fully compensated.  The Government should therefore announce without delay that it will adopt such a scheme with the objective of providing full compensation. Delaying consultation on any scheme until 2012 does not provide the necessary reassurance
  • HS2 Action Alliance agree the property market needs to continue to work as normally as possible – and for this to happen the financial institutions will need to support the selected scheme option
  • HS2 Action Alliance believe people should be able to stay or move ie as they would have in the absence of HS2
  • HS2 Action Alliance do not agree that Government acquiring properties should be a major negative factor that drives the choice of option. They can withstand losses and wait for market improvements more readily than individuals, being able to let or sell properties as they see best.  Properties need not be left empty (but can be let or sold), unless construction temporarily prevents this.

Only the Property Bond option meets the needs of those affected by blight:

  • The Bond based Property Purchase scheme, is the only option that provides a buyer of last resort at an unblighted price, when other private buyers would insist on a discount to compensate for imminent or occurant construction works, or for the many years of delay before compensation might be forthcoming (ie not until 2027 for phase 1 and after 2033 for the Y).
  • A Hardship based option would leave the great majority of owners suffering loss in property value uncompensated, because they would not qualify. It would also not be a better scheme than those that have previously operated, as the Secretary of State said would be provided
  • The Compensation Bond scheme would leave buyers – including those in desperate personal circumstances – forced to move facing major price reductions from the unblighted value to sell, as no one would willingly suffer the detriment for construction without compensation.  That no compensation would be paid until a year after the railway is operating (in 2027 or 2033) ie after construction is complete, would leave buyers and lenders requiring a considerable discount from the unblighted value, to reflect that they might not remain owners long enough to benefit.

Only the Property Bond could gain the backing of financial institutions and provide the necessary stability for the property market to operate normally. This was proved by Central Railways.

The Property Bond has already been overwhelmingly supported once, in the 2010 consultation.  It is based on private sector best practice, and was identified as the best way to deal with blight.

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15 comments to “HS2 Consultation Question 7 – the Property Bond Option”
  1. http://www.24dash.com/news/housing/2011-06-16-High-Speed-Rail-Government-sets-aside-20m-in-compensation-for-homeowners

    Almost £20 million in compensation has been offered to homeowners who may be affected by a new high-speed rail line, Transport Secretary Philip Hammond has revealed.Formal offers have been made to 34 applicants, with an average property value of more than £585,000.

    Holy moly! So much for the “we aren’t rich land-owners looking after our own self-interests” argument.

    Thirty-eight applications have been accepted…

    And there goes the “we’re concerned about the countryside/economy” argument. Once the right money is offered up, it all goes out the window.

    • Rich, I note you didn’t explain these purchases come under the Exeptional Hardship Scheme, set up by the Government to enable those whose properties are blighted by the threat of HS2, who urgently need to move. There have been in the region of 300 applicants for this scheme, with its many hoops to jump through, and only 34 have been approved so far.

      The clue is in the title. You can’t just, as you seem to be suggesting, decide you want to move and apply for the money. Also, alas, nowadays half a million quid for your house doesn’t qualify you as a rich land owner – you need a few million added to the price for that. Methinks your prejudices are showing.

      I agree with you that paying out for an intiative that has caused massive property blight that, supposedly, hasn’t been decided yet is a shocking waste of money. Better the HS2 had never been mooted, better things to do with the money.

      Check out the conditions for EHS application on HS2 Ltd web site.

      • lel …..how many have been rejected? Also, if properties that have been purchased by the government are auctioned off, it would be interesting to see at what price they sell at. It must have occured to some that they could sell at best price and re purchase later…..

      • ‘Also, alas, nowadays half a million quid for your house doesn’t qualify you as a rich land owner – you need a few million added to the price for that.’

        Think you might find that the vast majority of the UK population will disagree with you on that.

        • Note the word “alas”. I am one of the “vast majority” -in fact I’m at the very low end of the housing ladder. I’m only pointing out that “land owners” would be paying far in exess of £0.5m, hence the original post was a little exaggerated.

    • Just noticed that Simons comment has been deleted……shame on you guys, it really does show you up for the hypocrites that you are. But hey , no matter, its public knowledge now, and I shall certainly make use of that one!!!!

      • The information that was in the comment is on the Parliament website. However it is personal information about individuals so we deleted it.

    • I was just reading a link posted on here about the roadshow in a place called Hampton in Arden.

      http://www.birminghampost.net/news/west-midlands-transport-news/2011/06/16/residents-still-concerned-over-hs2-after-visiting-information-roadshow-65233-28891376/

      Residents are expressing concern , particularly one , a resident of Old Station Road who says she has been unable to sell her house and forced to slash the price. She states that they dont qualify for compensation as they cannot show a pressing need to move, the property is within 1/2 km of HS2. Also states that people have been to see the house and fell in love with it, but then lose interest when they here about the rail line.

      The clue to this is in the name of the street……the gardens of Old Station Road actually back onto …..the WCML!!!!!!!!!!! So this lady is using the excuse of HS2 when in fact a very busy rail line already sits at the bottom of her garden. What makes this even more laughable is this……Hampton on Arden is directly beneath the final approach to Birmingham Airport, in fact the very next rail station from Hampton on Arden is Birmingham International.!!

      • So that means you are revising your view that everyone within 1km of the line should be compensated? Are there other criteria you would like to apply?

        Its perfectly possible that she is right – potential buyers can assess the impact of the existing WCML and airplanes but not HS2 and its construction. Indeed, there will be cases (and this might or might not be one) where there is ultimately little impact once HS2 is actually operating. However, 15+ years is quite some time to wait for the market to recover.

        • Dave ……waiting for the market to recover is an issue that we all face irrespective of whether HS2 is nearby or not, I have that very one myself. The estate agent for this property points out the excellent transport links very close by, including the M42. And judging by the prices of the other properties , this is des res country.

          Until I looked at that story , I really hadnt considered the fact that the WCML would be very close to HS2 south of Brirmingham, HS2 takes a turn towards Old Common before heading North …….its only when it reaches the Midlands that it gets close as this story proves. In terms of compensation , my own view is that the minimum should be at least for increase noise level, I had some myself when the M60 was built. But here , there wont be any increase noise levels, as the sound of HS2 would be mitigated by the noise from jets overhead and trains on the WCML. And as far as I m aware, this place isn t an AONB….

  2. No doubt this is probably the most emotive issue of the lot concerning this project, but in plain english, should those directly affected get some form of compensation? ABSOLUTELY!!

    Where do we draw the physical line? From what I can gather listening to the stopHS2 supporters, 1 km from the line seems to be the most popular answer. To bear this out, I had a look at the website of an Estate Agent in Great Missenden and sorted properties for sale on a High to Low basis. Interestingly the very top property which is in a place called Meadle ( which appears to be about 2.5 km from the route ) has just sold. I cant see any evidence of a discount to market value, so it looks like the 1 km line may be about right.

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