Compensation for HS2

Note: Property owners affected by the building of the new high speed railway for Britain can complain to HS2 via the website (e.g. if there is a delay in getting a decision).

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How to Check Your Property Location?

You can check the boundaries for HS2 Phase 1 safeguarded area, Phase 2a property scheme maps, and HS2 Phase 2b to determine whether your property is in one of the proposed zones.

Note: The Rent Back scheme is an option for people who sell their home to the government under one of the High Speed Two compensation schemes and choose to rent it to continue living in the property.

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How Does HS2 Express Purchase Work?

The Express Purchase Scheme is a provision for homeowners to sell their property to the government, providing (either):

• It (or at least 25% of the total area) is inside the area marked ‘surface safeguarding along the High Speed Two (HS2) route‘.
• It was in the safeguarding area (also called the ‘Extended Homeowner Protection Zone’) and has since been removed. HS2 can confirm if you qualify.

Note: Safeguarding directions may trigger a ‘Statutory Blight‘ (e.g. when a property owner is within the safeguarded area and the Secretary of State for Transport buys the property because it is needed as part of the construction of HS2).

Express Purchase Scheme Eligibility

To apply for the Express Purchase Scheme, you must be the owner occupier (or personal representative) of a residential, commercial, or agricultural property.

They also accept applications from mortgage lenders in vacant possession of qualifying properties (e.g. banks, building societies).

Commercial properties only qualify for Express Purchase or under a blight notice if the rateable value is less than £36,000 (£44,200 inside Greater London).

Note: Another section explains how to find and check your business rates valuation (e.g. rateable value of a property).

To qualify as an owner occupier, you would need to be:

• The freeholder or a leaseholder with a minimum of three (3) years remaining on the lease.
• Living in or running a business from the property (or did so for at least six (6) months in the last eighteen (18) months if the property is empty).

High Speed Two (HS2) Limited provides safeguarding guidance for property owners or you can contact a chartered surveyor.

If you qualify for the scheme, the government will:

• Buy the property at its ‘unblighted’ value (e.g. open market value).
• Hand out a ‘home loss’ payment that is equal to 10% of the open market value of the property (up to a maximum of £64,000).
• Pay for any ‘reasonable’ expenses incurred (e.g. legal fees for surveyors, stamp duty, removal costs).

Note: Follow the HS2 complaints procedure while they are delivering the new high speed railway or in cases where it took a long time to reach a decision on an application or result.

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How to Apply for Express Purchase Scheme

After filling in the appropriate blight notice for Express Purchase, you would need to include the original (or certified copies) of:

• Proof of ownership (e.g. the Land Registry title).
• Proof that the property has been occupied for at least six (6) of the last eighteen (18) months (e.g. utility bills).
• Business rates bills (if applying for a commercial property).
• Plans of the property (e.g. Land Registry plans that show your property boundaries).
• Proof of representation (e.g. power of attorney).

Note: What if you are sending a blight notice but you do not qualify for Express Purchase scheme? In this case, you should include a description of what you did to sell the property (e.g. copies of correspondence conducted with an estate agent).

You can email the completed application form to the official HS2 address or you can send it by registered post.

Remember to add any relevant supporting documentation.

As a rule, it will take around two (2) months to get a decision on an application for the Express Purchase Scheme. After accepting your application, you would get up to three (3) years to accept the offer made by the government.

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Exceptional Hardship Scheme (Phase 2b)

Note: The Phase Two Exceptional Hardship Scheme closed on the 15th of November 2016.

What if You Already Applied?

High Speed Two applications move to the Need to Sell Scheme by automatic process in cases where the applicant did not receive a decision (see below).

But, the closure of the Exceptional Hardship Scheme (Phase 2b) will not affect the purchase of properties that already received a successful decision about getting HS2 compensation.

You should check to see if you qualify for one of the other High Speed 2 compensation schemes if your claim was unsuccessful.

Note: Follow the HS2 complaints procedure while they are delivering the new high speed railway or in cases where it took a long time to reach a decision on an application or result.

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How the Need to Sell Scheme Works

The Need to Sell Scheme is another way of selling a property to the government. You would need to have a ‘compelling reason’ to sell it, but unable to, as a direct result of the HS2 route.

Despite judging each application on its individual merits, typical ‘compelling reasons’ include things like:

• Being unemployed
• Ill health
• Job relocation

Need to Sell Scheme Eligibility

To apply, you must be either the owner occupier or personal representative of a residential, commercial, or agricultural property, or a ‘reluctant landlord’ (renting because it can’t be sold).

They also accept applications from mortgage lenders in vacant possession of qualifying properties (e.g. banks, building societies).

Commercial properties only qualify for the Need to Sell Scheme if the rateable value is less than £36,000 (£44,200 inside Greater London).

To qualify as an owner occupier, you would need to be:

• The freeholder or a leaseholder with a minimum of three (3) years remaining on the lease.
• Living in or running a business from the property (or did so for at least six (6) months in the last eighteen (18) months if the property is empty).

Furthermore, the government will also need to see evidence that you meet these five criteria.

Property Type

You must be able to show (any):

• The property is owner occupied.
• You are the personal representative (e.g. if the owner is deceased).
• You are acting as a ‘reluctant landlord’.

Location

The property must be close enough to the HS2 route that the construction or operation will ‘substantially’ affect it. However, the government does not issue any fixed distance for this criteria.

Effort to Sell

You must have been trying to sell the property, and without success, for a period of at least three (3) months.

No Prior Knowledge

You must (either):

• Have bought a lease (or signed it) before the government issued the official publication of the HS2 route section closest to the property.
• Show why you could not have known about the initial proposed route (e.g. searches were carried out before the announcement of the route and you completed the purchase after).

Compelling Reason to Sell

You must be able to provide evidence of a compelling reason to sell the property now. If not, you must be able to show that being unable to sell your property in the next three (3) years would place you under an unreasonable burden.

Note: The HS2 Need to Sell Scheme guidance and application form explains more about the process and the statistics for acceptance.

How Much Will You Get?

As a general rule, the government agrees to buy properties for 100% of unblighted open market value – following any successful application.

Note: It is important to understand that the government will not pay for additional costs, including legal fees and removal costs.

Applying for the Need to Sell Scheme

You can download an application form for the High Speed Two (HS2) Need to Sell scheme from the official website. Fill in the form and then send it to the address stated on the document (along with any relevant or supporting evidence).

What if an Application is Rejected?

If the government rejects your application, and you are unhappy with the result, you can reapply for HS2 compensation. Supply extra information explaining why you disagree with the decision.

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How to Apply for a Cash Offer?

What if you do not want to sell your property? In this case, you may qualify for a cash offer if your home is in one of the rural support zones.

The government also purchase some properties for their full open market value (i.e. unblighted) through the Voluntary Purchase Scheme.

Note: Your property must be in a rural support zone to qualify for Cash Offer and Voluntary Purchase Schemes. The Phase 1 and Phase 2 maps show the relevant zones.

Cash Offer Eligibility Criteria

The property (or at least 25% of the total area) needs to be inside the rural support zone (typically sixty to one hundred and twenty metres from the route).

Furthermore, you must also be (either):

• The owner occupier of a residential, agricultural, or commercial property.
• A mortgage lender (e.g. a bank or a building society).

As the owner occupier, you would need to be:

• The freeholder or leaseholder with a minimum of three (3) years remaining on the lease.
• Living in the property (or running a business from it), or have done so for a minimum of six (6) months in the last eighteen (18) months if it is currently empty.
• Able to show you bought or entered into a lease of the property before the announcement of the initial preferred routes for Phases 1, 2a, or 2b (or show why you could not have known about it).

Commercial properties only qualify for Cash Offer or Voluntary Purchase Schemes if the rateable value is less than £36,000 (£44,200 inside Greater London).

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How Much Will You Get?

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Homeowner Payment Scheme (Phase 1 and Phase 2a)

You may need to check Phase 1 or Phase 2a maps to find out whether you qualify for a payment by living in the homeowner payment zone.

Note: Parliament needs to authorise this particular section before Phase 2a homes become eligible.

The property (or at least 25% of total area) needs to be inside the homeowner payment zone. Also, you must be the owner occupier of a residential, agricultural, or commercial property.

As the owner occupier, you would need to be:

• The freeholder or leaseholder with a minimum of three (3) years remaining on the lease.
• Living in the property (or running a business from it), or have done so for a minimum of six (6) months in the last eighteen (18) months if it is currently empty.
• Able to show you bought the property before:
  • The 9th of April 2014 for Phase 1.
  • The 30th of November 2015 for Phase 2a.

Commercial properties only qualify for homeowner payments if the rateable value is less than £36,000 (£44,200 inside Greater London).

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How Much Will You Get?

• Distance between 240 metres and 300 metres from line of the route: £8,000
• Distance between 180 metres and 240 metres from line of the route: £16,000
• Distance between 120 metres and 180 metres from line of the route: £24,000

In some cases, your land may be covered by more than one homeowner payment band. If so, you would qualify for the band where the residential dwelling sits.

Likewise, a dwelling sitting outside any of the bands may qualify if the land sits within it. You would get the higher payment if your dwelling sits in more than one band.

As a general rule, receiving money for compensation under the homeowner payment scheme would not have any taxation liabilities in the United Kingdom.

The HS2 Homeowner Payment scheme guidance and application form contains further information about how to apply.

Note: Accepting a payment would not exclude you from the Need to Sell Scheme. They would deduct the value of the payment (plus statutory interest) from the purchase price.

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How to Apply for HS2 Rent Back Scheme

You can apply to rent back your property from the government, and continue living in it, after selling it under one of the HS2 compensation schemes.

Once it gets sold, your HS2 case officer can explain what options you have for renting the property back from the government.

After assessing your property, the government would then decide whether to rent it back to you, based on (both):

• How much any repairs would cost to make the property suitable for renting out.
• Whether paying for the work would be a ‘good use’ of the money paid to the government by taxpayers.

After contacting you with a decision about renting the property, you would get a tenancy agreement for an initial term of six (6) months and pay an open market rent.

A simple booklet explains more about how to rent back your property from HS2 Ltd once the government has agreed to buy it.

Note: You can check the HS2 route including, Phase 1 – London to the West Midlands, Phase 2a – West Midlands to Crewe, and Phase 2b – Crewe to Manchester and West Midlands to Leeds.

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