Let them eat cake

The Property & Compensation Consultation, part 13

For the vast majority of sufferers from HS2 planning blight, who don’t live within 120 metres of the planned HS2 route, the only relief that the Government is offering in it’s consultation document High Speed Two: Property and Compensation for London –West Midlands is the “long term hardship scheme” described in Section 4. This proposal is virtually a clone of the Exceptional Hardship Scheme (EHS) that I described in my blog Not exceptionally helpful (posted 8 Jan 2013), with some changes in detail that mostly serve to “toughen up” the scheme.

The same five qualifying criteria as I identified in Not exceptionally helpful are proposed for the new scheme; paragraphs 4.4 to 4.13 in High Speed Two: Property and Compensation for London –West Midlands refer.

Criterion 1, unlike its EHS equivalent, excludes owner-occupiers of business premises, owner-occupiers of agricultural units and mortgagees repossessing a property from enjoying the benefits of the scheme. No reasons have been provided for this policy change.

Criterion 2 has been completely rewritten, but appears to have similar force. Gone is the requirement for the applicant property to be “on the line of the route or in close proximity to the route”, replaced by a condition that the property “will be substantially adversely affected by the construction or operation of the railway”. The new version shares the major weakness of the EHS criterion in being ill-defined and open to inconsistency in application.

Criterion 3 requires, like its EHS equivalent, that you have “made all reasonable efforts to sell”. However, the period that the property must have been on the market has been extended from three months in the EHS to 12 months in the long term hardship scheme proposals “to take account of the difficult market conditions across the country”. The requirement to accept any offer within 15% of the marketed price, which was a dubious feature of the EHS scheme, has been retained. A new requirement has been added to this criterion, that applicants would “need to demonstrate that HS2 rather than any other factor was the primary reason they had been unable to sell their property”.

Criterion 4 is very similar to the equivalent EHS criterion and requires applicants to have bought their property at a time before “they could reasonably be expected to be aware of the proposals for HS2”.

Criterion 5 is broadly similar to its EHS ancestor, but has some changes in the details, and an important addition. The requirement to have “a pressing need to sell your property”, which was a principle requirement of the EHS criterion, has been dropped and the main requirement now is that “applicants should be able to show that they will suffer hardship if they are not able to sell their property”. The examples given that might qualify as hardship are almost identical to the EHS list, except that a medical condition of a dependent of the applicant has not been mentioned as an example.

A positive addition to Criterion 5, I think, is described in paragraphs 4.10 to 4.12 of High Speed Two: Property and Compensation for London –West Midlands. The Government is proposing that:

“… where an applicant does not have an immediate need to sell their property but will need to sell in the near future (i.e. within 3 years) to avoid suffering hardship, it should be possible to accept that this criterion has been met without waiting for that need to become urgent. We also recognise that some circumstances will necessitate an even longer term view and will therefore consider such applications on a case by case basis.”

One welcome outcome of this new proposal is that one of the situations that is cited where the new proposal might be applicable is downsizing upon retirement.

Paragraph 4.18 of High Speed Two: Property and Compensation for London –West Midlands proposes that any offers to purchase made under the scheme will expire after six months. Paragraph 4.19 advises that it will be possible to reapply to the long term hardship scheme with new evidence or in the event in a change in the applicant’s circumstances. This provision is similar to the EHS, but a new proposal will apply that only “failed” criteria will need to be re-examined for any reapplication made within six months of the original decision. I don’t have any quarrel with these proposals.

Consultation Question 4 relates to the qualifying criteria that are proposed for the long term hardship scheme:

“What are your views on the proposed approach to the application of the hardship criteria for the long term hardship scheme?

You might wish to reflect whether the low numbers of successful applications to the EHS, averaging under four a month, indicate that the new scheme will have little impact on the housing market in blighted areas. In view of this, you might think that the qualifying criteria for the long term hardship scheme should be made easier than the EHS, not harder.

You might wish to challenge the exclusion of business owners and landlords from Criterion 1 of the new scheme and ask why no justification has been provided for this change.

You might wish to challenge Criterion 2 on the grounds that it is ill-defined and open to inconsistency in interpretation. Evidence of market loss is a far more certain way of determining the impact of HS2, rather than proximity to the HS2 route.

You might wish to dispute the reasonableness of extending the time on the market qualification in Criterion 3 from three to twelve months. You might also wish to point out the unfairness of the requirement to accept an offer within 15% of the asking price. You might also ask how an applicant will be able to demonstrate that HS2 rather than any other factor was the primary reason they had been unable to sell their property.

Regarding Criterion 4, you might feel that the “no prior knowledge” requirement may damage the prospects for selling, since the benefits of the long term hardship scheme will not be available to the buyer.

You might wish to dispute the inclusion of Criterion 5 altogether, on the basis that a “hardship” qualification excludes most sellers suffering a financial loss due to HS2 blight. The purpose of any compensation scheme should be to protect people from the financial losses cause by planning blight, not to find ways of preventing them being compensated.

You are invited in paragraph 4.20 of High Speed Two: Property and Compensation for London –West Midlands to express your opinion on the proposals to limit the validity of offers to six months and to test reapplications only against “failed” criteria.

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