High speed rail 2 (HS2) - Environmental and planning briefing

Approval in principle was recently given by the Secretary of State for Transport to the proposed High Speed rail link (HS2) linking London, Birmingham, Manchester and Leeds in a new “Y” shaped line. However, that is far from the end of the story. A range of consents as well as compulsory purchase powers will be required for the scheme to proceed.

In this briefing we set out the procedure for considering whether the relevant consents and powers should be granted; outline how representations can be made (as well as some of the principal issues which will be taken into account) and consider what compensation will be available to those directly or indirectly affected along the route.

The scheme is to be the subject of a Hybrid Bill, which is currently planned to be introduced in Parliament in late 2013. The Bill will be considered both by the House of Lords and the House of Commons. A Hybrid Bill is so called because it has elements both of a private Bill (in that it specifically benefits the promoter) and a public Bill (because it has wider public benefits and impacts). The Hybrid Bill will suspend a range of statutory controls as they relate to the scheme (including planning permission but not including environmental controls) and will give the promoter the necessary compulsory purchase powers to assemble the land needed for the scheme. The procedure in outline (repeated in each House) is as follows:

• First Reading
• Second Reading
• Select Committee
• Third Reading

Finally, assuming it is passed by both Houses, the Bill receives Royal Assent and becomes law. The whole Parliamentary process is likely to take at least a year

There will be extensive consultation in the coming months. Formal objections must be way of a petition (which is a formal legal document setting out the grounds of objection). Petitions are heard during the Select Committee hearing mentioned above. A wide range of planning, environmental, economic, social and other issues will be taken into consideration in making the decision. The key considerations as we see them are set out overleaf:

(This list is illustrative and not exhaustive.)

Statutorily you will be entitled to compensation on one of the following bases:

1. If the whole of your property is compulsorily purchased to enable the scheme to proceed, you will be entitled to compensation under the Compensation Code based on the following calculation:
   1. the open market value of your property (ignoring the existence of the HS2 scheme - in other words what it would have been worth if there were no HS2 scheme); plus
   2. for owner/occupiers a home or business loss payment of 10 per cent of the value of the property as determined under (a) above; plus
   3. in all cases reasonable professional costs (such as solicitors and estate agents’ fees) and removal expenses (if any).
2. If part of your property is compulsorily purchased you will be entitled either to compensation for the open market value of that part (ignoring the HS2 scheme) plus your professional costs or, in some circumstances, you may be able to require the promoter to acquire the whole of the property, in which case you will be entitled to Compensation Code compensation for the whole as described at 1 above including home or business loss payment if you occupy the property.
3. If none of your land is taken but your home or business is near the rail line and is affected by factors such as noise and vibration arising from the use of HS2 (i.e. the operational phase not the construction phase) you will be entitled to compensation based on the resulting diminution in value of your property.   

For HS2 the Government has announced a range of additional compensation provisions to assist those affected on which it is currently consulting, including:

• a streamlined purchase scheme to simplify the statutory blight process for property owners
• a sale and rent back scheme to give homeowners in the safeguarded areas more flexibility
• a streamlined small claims scheme for construction damage which will allow individuals and businesses who are entitled to compensation under existing law to claim it more quickly and simply
• a package of measures to reinforce confidence in properties above tunnels
• a refreshed hardship scheme

An exceptional hardship scheme is already in place which, subject to qualifying criteria being met, enables those with an urgent need to sell who are unable to sell except at a substantially reduced price because of the announcement of HS2 to have their property purchased at open market value (ignoring the HS2 proposals).

All compensation claims are the subject of negotiation between the promoter and the landowner. If agreement cannot be reached, either party may refer the question of compensation to the Lands Chamber of the Upper Tribunal (formerly the Lands Tribunal), a part of the Court Service, which will hear expert evidence from both parties and decide the amount of compensation to be paid. Its decision is binding on both parties. Subject to the passing of the Hybrid Bill, the process of land assembly for the scheme is expected to commence in or about 2015.

Not unless you qualify under the exceptional hardship scheme (which is already in place) or one of the other additional provisions outlined above (which are the subject of consultation at the moment and are likely to be included in the Hybrid Bill). Statutorily, an owner-occupier may be entitled in some circumstances to serve a blight notice (which requires the promoter to purchase the land immediately) but only once the compulsory purchase powers are granted. In this case that will only be after the Hybrid Bill receives Royal assent.

Your local authority search will disclose whether any given property is within 200 metres of the centre line of the proposed railway line. Detailed plans for Phase 1 (Euston to Birmingham) have been finalised and can be viewed on the Department for Transport website.

If a property you are buying is affected, you will obviously wish to consider carefully with your professional advisers the implications of proceeding, which will vary from property to property depending on the degree to which they will be affected by the scheme. Currently it is not anticipated that construction will commence until 2019 and trains are not projected to start running until 2026. But experience from HS1 (the Channel Tunnel Rail Link) suggests that the mere existence of the proposals may make it difficult to sell properties along the route. Anyone buying a property with knowledge of the scheme will not qualify for the exceptional hardship scheme should they later have an urgent need to sell. The position is not yet completely clear but buying with knowledge of the scheme may also disqualify a purchaser from benefiting from some or all of the additional compensation provisions outlined above. Statutory entitlement to compensation should not be affected.

HS2 - Anticipated Timeline

If you require more information please contact:

Nigel Hewitson