What is HS2?
HS2 is a 250-mile high-speed railway line between the Northwest and Southeast, stopping at Manchester, Birmingham and London, with trains continuing the existing network to Scotland and beyond. It aims to address three key problems facing our current railway network: capacity, carbon, and connectivity.
On 4th October 2023, Rishi Sunak announced that the planned HS2 rail from Birmingham to Manchester had been cancelled.
The announcement caused a wave of shock, confusion and anxiety across the Midlands and the Northwest after years of anticipating the construction of a huge railway track.
The cancellation of the ‘northern leg’ has had a huge impact on the property sector.
Thousands of residential properties were affected by the proposed route, and therefore, homeowners are keen to understand the next steps.
What was HS2’s initial approach to properties in the proximity of the ‘northern leg?’
In short, every property was dealt with differently in accordance with their distance from the railway track.
Thousands of homeowners who were identified as living in a ‘HS2 Safeguarded Area’ were subjected to the compulsory purchase scheme.
The compulsory purchase scheme meant that the government could acquire their homes or land to pave the way for the railway line to be built, along with associated train stations and tunnels.
However, it was not just homeowners located within the ‘Safeguarded Area’ who were affected, but also people living within proximity to the railway tracks.
The government recognised that the construction of HS2 may have ‘blighted’ their properties by reducing their market value.
How did HS2 compensate homeowners for the huge disruption?
The amount of compensation depended on the location of the property.
Those living in a ‘HS2 Safeguarded Area’ could submit a ‘Blight Notice’ application. If successful, the prospective compulsory purchase would be brought forward.
Only the following individuals could apply:
- A resident owner-occupier of a private property
- An owner-occupier of any business property where the Rateable Value did not exceed £36,000 (£44,200 within Greater London)
- An owner-occupier of an agricultural unit with at least six months of occupation
- Certain mortgagees and personal representatives
The list did not include an owner of an investment property.
Alternatively, homeowners with properties located in a ‘HS2 Rural Zone’ were faced with the following options:
- Receive a cash offer of 10% of the value of the property up to a maximum of £100,000
- Apply under the Voluntary Purchase Scheme, where HS2 could purchase your property at the full un-blighted market value of the property.
- Apply under the Need to Sell Scheme, which had several conditions, but the property must have been marked for three months and received no offers within 15% of the unblighted market value.
Conversely, homeowners with properties located within the ‘HS2 Homeowner Payment Zone’ could receive a lump sum payment depending on their proximity to the train line. Please see below:
- Properties 120 to 180 metres from the line – £22,500
- Properties 180 to 240 metres from the line – £15,000
- Properties 240 to 300 metres from the line – £7,500
What will happen with HS2 and residential properties now?
The million-dollar question.
Since the cancellation announcement on 4th October 2023, limited guidance has been released to support anxious homeowners.
We can only anticipate HS2’s next steps at this stage, for example, whether the properties where ‘Blight Notice’ applications have been successful will now become ‘unblighted’ due to the cancellation of the ‘northern leg.’
Likewise, whether HS2 will give former homeowners ‘first refusal’ on their empty homes located within a once ‘Safeguarded Area'.
Unfortunately, the cancellation announcement raised more questions than answers.
However, at Myerson, we are continuing to follow current affairs and trace any legal developments in relation to HS2.
We are keeping our finger on the pulse and are navigating our clients through this period of uncertainty.