Raman Dhillon

Raman Dhillon

Solicitor – Litigation

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In this blog, Raman Dhillon of our Litigation Departmentdiscusses the options available to you if your property will be affected by HS2. 

If your property is going to be affected by HS2 you should have received a letter advising you of the options that are available to you. The options you are eligible for are dependent on the location of your property and which phase of HS2 affects you.

Those living in what is described by HS2 as a “safeguarded area” can apply for either the “Express Purchase Scheme” or the “Need to Sell” scheme.

The Express Purchase Scheme is where the government purchases your property at its “unblighted” market value. That is the value of the property on the open market if HS2 was not being built. If your property is in a “safeguarded area”, you must be an owner occupier of a residential, agricultural or commercial property or their personal representative if they have died, to be eligible for this option. The property can either be freehold or leasehold but in the latter case there must be at least 3 years left to run on the lease. The government will also pay your reasonable expenses such as stamp duty (on the purchase of a new property), surveyors’ and legal fees and removal costs.

The Need to Sell scheme is where you sell your property to the government at its unblighted market value where you have a compelling reason to sell it but cannot do so as a direct result of the announcement of the HS2 route. Compelling reasons include unemployment, relocation for a new job or ill health or that you would be placed under an unreasonable burden if you were unable to sell your property in the next 3 years. As is the case with the Express Purchase Scheme, you must also be an owner occupier of a residential, agricultural or commercial property or their personal representative if they have died. The property can either be freehold or leasehold but in the latter case there must be at least 3 years left to run on the lease. You may also be a “reluctant landlord” who has had to rent out the property because of your inability to sell it. In addition, to qualify you will need to be able to demonstrate that your property is close enough to the HS2 route to be substantially affected by its construction or operation and that you have tried to sell the property without success for the last 3 months. You must also be able to demonstrate that you had no prior knowledge of the proposed development of the HS2 route at the time of purchase or when entering the lease.

Those living in what is described by HS2 as a “rural support zone” can apply for either the “Cash Offer or Voluntary Purchase Scheme” or the “Need to Sell” scheme described above.

The Cash Offer or Voluntary Purchase Scheme is where you can either ask the government for a cash offer if you do not wish to sell your home or where the government purchases your home for its unblighted market value (the latter option is like the Express Purchase Scheme described above except the government does not pay your reasonable costs). The cash offer is a lump-sum payment of 10% of the unblighted open market value of your property (from a minimum of £30,000 to a maximum of £100,000). The government will cover your legal fees up to £500 plus VAT if your application is successful.

Those living in what is described by HS2 as a “homeowner payment zone” can apply for a “Homeowner Payment Scheme”.

The Homeowner Payment Scheme is where you can claim payment of £7500 – £22,500 depending on which band you are in and the distance of your property from the line of the HS2 route. To be eligible for this option, you must be an owner occupier of a residential, agricultural or commercial property. The property can either be freehold or leasehold but in the latter case there must be at least 3 years left to run on the lease. You must also have purchased the property before 9 April 2014 or 30 November 2015 depending on which phase applies to you. Most people who receive money under this scheme are not required to pay tax on it.

If your property is outside of the HS2 zones, you can still apply for the Need to Sell Scheme described above if you can satisfy the relevant criteria that applies.

A further option available to you is that if you are selling your property to the government under one of the schemes described above you can rent it back and continue living in the property. If you are eligible for this option, you will pay open market rent and receive a tenancy agreement for an initial term of 6 months.

If you have received a letter from HS2 regarding compensation for the disruption caused by the proposed new train line you may note that you are advised to consult with a solicitor. Get in touch with Band Hatton Button today and we can assist you in deciding the best option available to you. Alternatively, if you have already decided which option you would like to go for, we can assist you in preparing and executing the necessary paperwork. Commonly, your legal costs in dealing with this will be covered by HS2 so let us take the stress away by dealing with this matter for you on your behalf.