Something of a minority interest

The Property & Compensation Consultation, part 11

Section 3 of the consultation document High Speed Two: Property and Compensation for London –West Midlands describes a further concession that is being offered for some properties within the safeguarded zone. This is a “sale and rent back” scheme, which is only on offer to properties that are identified as required to be demolished to make way for HS2. Further the properties must be residential and owner-occupied.

Also, a preliminary to receiving benefit under the scheme, the owner of the property must have served a valid blight notice.

The scheme is intended “to help alleviate the stress and anxiety of losing a home as a result of HS2”. It would enable eligible homeowners to sell their homes to the Government and remain in residence as tenants until the property was needed for HS2 construction work, subject to paying a market rent. The homeowner will be entitled to the normal statutory compensation; the value of the property and the home-loss payment will be due at the point of sale, and reimbursement of reasonable moving costs will be made once the property has been vacated.

Agreement to every rent back agreement will be subject to the Government running a “value for money” test, taking account of any costs of making the property suitable for rent and the expected rental returns. Full details of this aspect and the tenancy arrangements are given in Section 3 of High Speed Two: Property and Compensation for London –West Midlands.

Consultation Question 3 relates to the sale and rent back scheme:

“What are your views on the proposals for a sale and rent back scheme?”

The scope of the scheme has been limited to the properties that will be required to be demolished, which currently stands at 338. Within that group, the scope has been further reduced by generally excluding business premises, second home owners and landlords. You may feel that the reasons given by the Government for these exclusions in paragraphs 3.6 and 3.7 of High Speed Two: Property and Compensation for London –West Midlands are not valid and that the scope should be wider.

However, the Government does foresee a possible need for “some flexibility on a case by case basis” in the case of second home owners and landlords, citing the example of “where an owner-occupier had moved out only in the short term”. Accordingly, the Government wishes to “reserve the right to make exceptions under certain circumstances”. You may feel that the Government should set out unambiguously what these exceptions will be.

You may feel that it will not be in the interests of any community to have empty properties in its midst and that the Government should be prepared to do more to stop this happening.

Section 5 of the High Speed Two: Property and Compensation for London –West Midlands is a proposal to “restore confidence in properties above tunnels”. Unlike the proposals that I have described so far, which are restricted to the safeguarding zone that relates to surface interest, the proposals described in Section 5 apply solely to the safeguarding zone for “subsurface interest only”.

The proposals arise from concerns expressed by respondants to the 2011 public consultation on HS2 about the effects that tunnel construction and train operations underground might have on properties, and that local property markets might be affected by concerns over those effects. The main concerns are identified as settlement and vibration.

The steps that the Government proposes to take to “restore confidence” are:

  • Publishing “a clear, thorough and fully-evidenced assessment of the UK’s recent history of tunnelling”.
  • Undertaking free “before and after” surveys of properties that HS2 Ltd identifies as “being at risk”. The owner of any of these identified properties may request an “after” survey at any time up to two years of the railway opening to the public.
  • The owner of any property located within 30 metres on plan of any tunnelling works will be able to request a “Settlement Deed” from HS2 Ltd. This document will provide a clear, legally binding undertaking to the property owner to indemnify him for any settlement, subsidence or vibration issues that may occur, in perpetuity.

Whilst the Settlement Deed covers vibration issues, Part I of the Land Compensation Act 1973 also allows for compensation to be paid for the impact of vibration (see my blog A few crumbs more, posted 6 Jan 2013).

Section 5 also describes how “subsoil rights” under properties will be acquired by HS2 Ltd. This will either involve a fixed token payment, or be open to negotiation, at the property-owner’s choice.

Consultation Question 6 relates to properties above tunnels:

“What are your views on the Government’s proposals to restore confidence in properties above tunnels?”

You may think that any property owner within the 30-metre zone should be permitted to request a “Schedule of Defects” survey (a “before” survey), rather than only the owners of properties identified as at risk by HS2 Ltd.

You may think that a property owner should be able to request an “after” survey at any time, not just within two years of the opening date of HS2.

You may wish to query why a Settlement Deed will only be available for properties that are within 30 metres of the line of a tunnel, rather than simply at the request of the property owner.

You may wish to request confirmation that a Settlement Deed will be transferable to any new owner if the property is sold.

You might think that limits should be set on the maximum level of vibration that will be permitted.

You may doubt the ability of the proposals to prevent blight; in particular, you may feel that blight, due to fears of subsidence and vibration, is likely to extend outside the distance of 30 metres from the line of a bored tunnel.

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One response to this post.

  1. Posted by chriseaglen on January 15, 2013 at 8:38 am

    There is depth of tunnel below the property and the foundation and soil/rock type(s) to determine the vibration sensation and the settlement characteristics. The impact of settlement may not be known until passage of time and weather patterns. Suggest you add to the comments with underpinning and also the opinon of RICS and ABI. There is a requirement for tunneling for a baseline report and this should address these issues. No real different with deep cuttings when close to the cutting sides. Also roads, bridges, sewers and land drainage can be effected along with churches.

    Reply

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