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HS2: on track or running out of steam?

The HS2 project attracted renewed controversy last week when Lord Mandelson described the project as an “expensive mistake” and likely to damage the northern regions of England it is intended to help. Mandelson’s intervention is significant because he was closely involved in the last government’s initial launch of the scheme; his change of heart suggests that the cross-party consensus in favour of the project cannot be taken for granted.

Even Boris Johnson, a staunch proponent of grands projets such as Crossrail and Crossrail 2 has expressed reservations about the increasing cost of the scheme which he blames on overly-extensive consultations and assessments.

Yet more critics are questioning the economic merits of the scheme. On the government’s own figures, the estimated gain per pound invested in the line from London to Birmingham is £1.40, which compares poorly to the £3.10 estimated return on Crossrail.

Despite the doubts and criticisms, the government has reaffirmed its commitment and the project itself is gathering pace. On 9 July, the majority of Phase 1 of the HS2 route was safeguarded. Safeguarding is a statutory procedure which is put in place in respect of large-scale infrastructure projects.  It provides a statutory mechanism by which Local Planning Authorities must consult HS2 Ltd on new and undecided planning applications falling within the safeguarded area and it provides HS2 Ltd with a statutory remit to comment on such applications.  This is intended to prevent any development within 60 metres of the planned route which might prevent or hamper the project. Maps showing the safeguarded areas can be found by following this link: http://www.hs2.org.uk/safeguarding?sg_link=576.

Safeguarding is significant in that it is the trigger for statutory blight claims from affected property owners. Owners of homes (freeholds or leases with at least three years remaining on the lease) and commercial property with a rateable value of less than £34,800 lying partly or wholly within the safeguarded area can make claims under this scheme. If successful, a claim will result in the government purchasing the property for its unblighted value and paying the owner a further 10 per cent in compensation for the owner’s loss of their property. As it stands, property owners are required to demonstrate that they have made reasonable efforts to sell their property, however to reduce uncertainty and unfairness, the government proposes to remove this requirement in the next few months.

Property owners do have the option not to take advantage of the statutory blight scheme and to wait, instead, for the government to issue a Compulsory Purchase Order (not likely before 2016) and thereby postpone purchase and a compensation claim until then. For owners of commercial property with a rateable value over £34,800 this remains the only option, aside from opening compensation negotiations on an ad hoc individual basis, which is also a possibility. 

On other fronts, the project has been consulting over the last few weeks on aspects of the design of the route at specific locations (the Design Refinement Consultation) and has also been consulting on its draft environmental statement. Both of these consultations close today.  As we reported recently, despite the opposition it seems that the government’s commitment to the project has not waned and that HS2 is here to stay.