HS2 Compensation

There have been reports in the local press of residents and businesses along the HS2 route not receiving compensation. Groups representing rural landowners, property owners and businesses, including farmers, have also complained of delayed payments and poor contractor practices, as well as the impact of delays to construction on rural livelihoods. The impact on farmers was also raised by Greg Smith MP at a session of the Transport Committee on HS2 (30 November 2023).

Compensation arrangements

Multiple compensation schemes are offered by HS2. Compensation is assessed in accordance with HS2’s ‘Compensation Code for Compulsory Purchase’ [PDF]. The overriding principle of compulsory purchase compensation is equivalence. This is the principle that:

people whose land or property is acquired compulsorily should be left neither better nor worse financially as a result of their land being acquired and are entitled to compensation which is neither more or less than the value of their loss.

Property owners can sell their properties via one of:

• the Statutory Blight scheme – a statutory scheme
• compulsory acquisition – a statutory scheme
• the Need to Sell scheme – a discretionary scheme
• the Streamlined Residential Blight scheme (only in the case of HS2 phase 2) – a discretionary scheme.

The exact scheme available to property owners depends upon various factors, in particular the location of the property relative to the HS2 route.

Different schemes have different property valuation processes. The statutory schemes offer additional statutory loss payments of up to 10% on top of the property’s market value, plus disturbance costs and other fees. The discretionary schemes are simpler but do not offer payments above market value. However, as per the longstanding ‘compensation code’ [PDF], all property owners are paid the unblighted / unaffected market value for the property. This is the amount the property would be worth if the project did not exist, not the blighted (lower) value.

All property valuers must be registered with the Royal Institution of Chartered Surveyors (RICS) and must be familiar with the area.

Blight payments can be triggered early in specific circumstances. In particular, property sellers can receive advance payments (up to 90% of the property’s value) if selling because of compulsory acquisition. Furthermore, property owners affected by phase 2 of HS2 can use the Streamlined Residential Blight scheme instead of the Statutory Blight scheme, which speeds up the compensation process.

Independent Construction and Residents’ Commissioners have been appointed for HS2. Their role includes bringing issues around compensation to the attention of the Minister for Rail and HS2.

Impact of cancellation of Phases 2a and 2b on compensation and disruption to local residents

There have also been reports in the media about blight caused by HS2 along the now cancelled sections of the route.

Following the Prime Minister’s announcement of the cancellation of Phases 2a and 2b, appearing before the Transport Committee (15 November 2023) the Secretary of State for Transport confirmed that additional compensation would not be payable to land owners whose land will no longer be required for HS2

Appearing before the Transport Committee at the same session (15 November 2023) Alan Over, Director General for High Speed Rail Group, Department for Transport, provided some further information on the removal of HS2 equipment and the restoration of land, noting that the DfT and HS2 are working on a close-down plan and will retain responsibility for the security of site until they are made safe and can be returned to alternative ownership. He estimated that this could take up to two years.