What is the Exceptional Hardship Scheme?
The only compensation mechanism available at present to property owners for any loss in property value arising from the HS2 proposals is the Exceptional Hardship Scheme (EHS). This is a discretionary scheme which is only available to property owners who can demonstrate that they have an urgent need to sell, but have been unable to do so other than at a substantially reduced price as a direct result of the impact of HS2.
The scheme is administered by HS2 Ltd on behalf of the Transport Secretary. Claims are evaluated by a panel, which makes a recommendation to the Secretary of State, who has the final decision. Surprisingly, there is no appeal mechanism.
Panel members are drawn from a pool of nominees that includes independent members and employees of HS2 Ltd. The panel at any particular session will normally comprise two independent members and one HS2 Ltd employee; one of the independent members will chair the panel. Further details and the names of nominees may be found here.
Will I qualify?
Applications are assessed by the panel against five specified criteria; to be successful, the applicant must be adjudged by the panel to satisfy all five criteria. These criteria are:
- The applicant must be able to demonstrate that he/she has a “qualifying interest” in the property. This will normally require the applicant to be an owner-occupier of a residential property, or of an agricultural unit that includes a dwelling house, or of a business premises with an annual rateable value not exceeding £34,800, but will also extend to personal representatives of a deceased owner-occupier or mortgagees with a right to sell a property.
- The property must be directly on the line or “in close proximity” to the line. There is no fixed distance that defines “close proximity”; existing cases indicate that the panel is prepared to accept properties that are several hundred metres from the line of the route, but may also take account of the nature of the intervening landscape.
- The applicant must have made “all reasonable efforts to sell” and still not received an offer within 15% of the property’s “unaffected open market property value” (i.e. the price the property would most likely achieve, assuming a normal or non-urgent sale period, other than for the announcement of the proposed route for HS2). In considering whether this criterion has been satisfied, the panel will expect to have evidence that the property has been on sale, with at least one recognised estate agent and at a realistic price, for at least three months and will seek confirmation of this from the estate agent(s).
- The applicant must have bought the property before he/she could be reasonably expected to have been aware of the route that HS2 would take. Anyone who bought before 11th March 2010 (or 20th December 2010 where the route realignments have brought the route closer) will satisfy this criterion.
- The applicant must have a “pressing need to sell” and must satisfy the panel that he/she “will suffer exceptional hardship” if forced to wait for compensation until the statutory and a possible new discretionary schemes come into force, which is expected to be in late 2011. Examples of situations which the panel may deem to satisfy this criterion are changed family circumstances, relocation for employment, financial pressure (including a divorce settlement), a medical condition which necessitates selling and the winding up of the estate of a deceased person. However, the panel may wish to see particular evidence that “exceptional hardship” will be caused, even when the reason for selling falls within one of these categories.
What happens if my application is accepted?
If the panel accepts the application then independent valuations of the property will be arranged and a formal offer to buy the property will be made by the Government. The Government will pay the full market value, as assessed by the independent valuers; this will be the unblighted value, i.e. the amount that the property would be worth if there were no proposals to build a high speed rail line nearby.
What else should I know?
Full details of the scheme, including an application form, and some frequently asked questions may be downloaded from the HS2 Ltd Exceptional Hardship Scheme site.
For a scheme that is designed to support property owners who have difficulty selling as a direct result of HS2, it appears to be surprisingly difficult to get an offer of help from the EHS panel. The best information that we have available at present indicates that only one application in four is successful.
The Cubbington Action Group against HS2 will be pleased to help you with advice on your application to the EHS or any matters arising from a decision taken by the EHS panel; please contact Peter Delow at firstname.lastname@example.org. However, the Cubbington Action Group against HS2 cannot accept any legal responsibility or liability for any errors or omissions which may be made in giving such advice. Applicants are therefore strongly recommended to seek appropriate professional advice if they are unsure about any aspect of their application.
Note: the above information is provided only to assist potential applicants to the EHS to gain a basic understanding of the scheme. Whilst the Cubbington Action Group against HS2 has made every endeavour to ensure accuracy, the information that we have provided should not be relied upon legally.