Flexible friends, part 1

A few days after I had completed writing my blog Looking sheepish (posted 27 Feb 2015) some further discussion took place in the HS2 Select Committee about the Need to Sell (NTS) compensation scheme. What was said served to reinforce my fears that, so far, the Committee has been seen to be fairly impotent when it comes to dealing with obvious inadequacies in the compensation arrangements. So I intend to try your patience by using a further couple of postings to report on what took place and expand on the thoughts that I expressed in Looking sheepish.

The discussions on compensation were the result of the petitions by the Radstone Residents Group (petition 0754) and some individual petitioners resident in Radstone being heard by the Committee on the morning of Tuesday 24th February 2015 (see footnote 1).

Radstone is a hamlet in South Northamptonshire, located a couple of miles from Brackley. It comprises 18 properties that are home to some 40 residents. In the words of Simon Marinker, who presented the petition on behalf of the Residents Association as well as one deposited by him and his wife (petition 0753), Radstone is “significantly adversely affected by HS2”; all of the properties are between 220 and 400 metres from the line and noise levels are predicted to be problematic, as the section below, taken from HS2 Ltd drawing SV-05-034a, illustrates:

Predicted HS2 noise levels for Radstone (source: HS2 Ltd)

Predicted HS2 noise levels for Radstone (source: HS2 Ltd)

The 40dB LpAeq,night contour is the thick black line running through the centre of the hamlet, and the individual properties have all been colour coded to indicate changes in sound level resulting from HS2 that have been graded from “minor adverse” (yellow) to “major adverse” (red). Unsurprisingly, the property market in Radstone is a little slow; another petitioner, Mrs Herring (petition 0662), told the Committee that their neighbours had applied to an equity release company and the surveyor had put a value of £0 on their property (see footnote 2).

The two petitioner couples, Marinker and Herring, are both in the position of expecting to want to sell properties in Radstone at some stage in the future, due to lifestyle changes consequent upon advancing years – what the Committee have referred to as “age and stage”. Both were advised by the Committee to apply to the NTS now.

The reasoning behind this recommendation appears to be partly to suit the convenience of the Committee, as Sir Peter Bottomley MP explained to Mr Marinker (see footnote 3):

“If we want to write something into a Bill, it’s because it’s necessary; if someone hasn’t applied, I don’t think anyone can say it’s necessary. So somebody in your sort of position – this is not direct advice to you – might be well advised to apply before this Committee has finished its work, to be able to say, ‘It has been successful, it has not been successful’.”

In other words, the Committee needs property owners that don’t necessarily satisfy the five NTS criteria, if rigidly enforced, to apply to the NTS in order that the Committee can be assured either that the NTS is being applied flexibly enough, or to gain evidence to make a case to the Government that the NTS requires revision. This need for evidence of the performance of the NTS was confirmed by Committee Chairman, Robert Syms MP (see footnote 4):

“The more people apply, the more we get a feeling of whether or not it’s doing what it is meant to do, or not doing, in which case we can make recommendations to the Department of Transport (sic)”.

Whilst I have some sympathy with the Committee on this, I’m not sure that it is right to use people in desperate positions, and looking for help, as, at best, guinea pigs or, at worst, as pawns in a political game. The problem is that the conditions set out in the NTS guidance notes for satisfying Criterion 3 are clearly predicated on the assumption that the owner is trying to sell his property, and neither of the petition couples from Radstone are in this position currently. Whilst the Criterion 3 rules do envisage the possibility that the requirement to market a property for three months may be reconsidered in the light of “evidence that a number of local estate agents have refused to market the property”, this does appear to imply, however, that the owner is actually trying to sell the property (see footnote 5).

There is also a potential unfairness if the NTS Panel allows an application to be accepted without requiring the property to be on the market for a minimum three-month period. This is that, whilst the property is on the market, the property owner renders himself ineligible for acceptance for the NTS if an offer is made within 15% of the selling price. On the other hand, accepting such an offer could mean that the seller realises less than the compensation that he would have been paid in the event that an offer had not been made, since the level of compensation is set at the unblighted market value. If the seller gets around the need to offer his property on the market, then the risk of losing out in this way is removed. So the unintended consequence of making a concession on the “effort to sell” criterion could be to render an advantage to the applicant given the concession.

(To be concluded …)

Footnotes:

  1. See the video and the transcript of the session.
  2. See paragraph 378 in the transcript.
  3. See paragraph 348 in the transcript.
  4. See paragraph 355 in the transcript.
  5. These conditions are set out on pages 8 to 10 of the HS2 Ltd document Need to sell scheme – Guidance notes and application form, January 2015. The reference to estate agents refusing to market the property is in paragraph 3.1.21.

Important Note: The account of the proceedings of the HS2 Select Committee that is given in this blog is based upon an uncorrected transcript of evidence, which is not yet an approved formal record of the proceedings of the HS2 Select Committee. Neither witnesses nor Members have had the opportunity to correct the record, and it may therefore be subject to changes being made in the light of any such corrections being requested.

Acknowledgement: The Ordinance Survey mapping upon which the HS2 Ltd noise prediction is overlaid has been reproduced in accordance with the principles of fair dealing as set out in the Copyright, Designs and Patents Act 1988. On this basis, this mapping is:

Reproduced by permission of Ordnance Survey on behalf of HMSO.

© Crown Copyright. All rights reserved.

 

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2 responses to this post.

  1. Posted by Barbara Mortimer on March 7, 2015 at 7:06 am

    I had the impression that the new scheme would help people coming up to retirement and needing to cash in on the value of their property for this. I thought the implication of para 3.1.28 – the bit about the next 3 years – was that you didn’t need to be selling yet. But looking at it more closely now there seems to be a contradiction. Or is this what you are going to cover? (If so, sorry for the spoiler!)

    Reply

    • Yes Barbara you are correct that paragraph 3.1.28 would allow someone not wishing to sell now to satisfy Criterion 5. However, my reading is that they would not satisfy Criterion 3 and, as you need to meet all five criteria they wouldn’t qualify. So if the intention is to allow “age and stage” applications in advance, the drafters of the rules have not, in my view, got it right. Whether the Radstone applicants will succeed is therefore, I feel, down to how flexible the NTS Panel is going to be, and the history of the EHS is not very comforting on this score. Whilst a scheme like the NTS cannot foresee all possible situations, I do feel that the rules should have done better on “age and stage”, which will be a regularly-encountered situation.
      With this lack of clarity in the rules, I understand why the Select Committee want to test the NTS on “age and stage”, but feel that they will need to be prepared to take up any individual failed cases that may result.

      Reply

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