WRITTEN EVIDENCE SUBMITTED BY THE CLA
THE CLA
The CLA is a membership organisation for the owners of land, property and businesses in
rural England and Wales. We help safeguard the interests of landowners and those with
economic, social and environmental interest in rural land and the rural economy. The CLA
represents those who own and manage over half of the rural land in England and Wales.
It is important to recognise that it is CLA’s members’ land, buildings and/or houses that will
be compulsorily acquired and their businesses and property ownerships severed by the HS2
proposals. Many will have to remain in situ throughout the construction phase and have to
live with the permanent impacts of HS2. The CLA and our members are therefore unique,
and key stakeholders in the project, not just another community interest group.
EXECUTIVE SUMMARY

HS2’s engagement with landowners, farmers and rural businesses has been poor.
Often they spend inadequate time spend on site and give poor feedback to the
landowner subsequently. HS2 has only attended one meeting of the Farmers and
Landowners Working Group on which the CLA sits.

There is no justification for where environmental habitat has been located.

The Environmental Statement outlines an environmental mitigation strategy which at
almost every stage will over-estimate the mitigation required leading to excessive
land take.

The CLA was also refused a seat at the HS2 Environmental Forum, where decisions
on the Metric were taken and were the degree of environmental mitigation and land
take was assessed.

The assessments of the impact of agricultural holdings under-plays the true affects of
HS2. Some owners and occupiers have not even been contacted by HS2.
Assements do not take into account environmental designations e.g. NVZs which
may limit the scope of businesses to re-adjust

The Environmental Statement should take into account the role use, and reform of
the compensation code as this is relevant to the business restructuring that will follow
HS2

Phase 2 Assessment of Sustainability should be consulted on separately and not as
part of this Phase 1 consultation.

There is no requirement to limit land take through compulsory acquisition and no
desire to reach voluntary agreements on biodiversity offsetting.
IMPACT ON AGRICULTURE
HS2 Ltd landowner engagement has been poor. Whilst HS2 ltd has met with the CLA, HS2
has only attended one meeting of the Farmers and Landowners Working Group.
Whilst the impact on agricultural land is scheduled, the assessments of impacts are often
under played. Some owners or occupiers have not even been contacted by HS2. The
assessment system was too simplistic and did not take proper account of the impact on
individual farm enterprises, employment or mechanisation consequences of HS2 on the
holding. NVZ, environmental designations and other schemes limited the landowner’s ability
to reduce the impact of scheme and this doesn’t appear to be taken into account.
In addition there have been cases where landowners and businesses have been visited but
were not able to take professional advice and therefore would not have appreciated the
importance of their submissions. So may not have been given the opportunity to go into the
detail necessary to substantiate the true impact of the scheme on their holding.
A Buckinghamshire member
30ha of land take, impact assessed as Medium. That land take however represents a
quarter of the arable area of his holding, rendering his remaining arable area unviable
with the loss of one full-time worker and the restructuring of the remaining business.
There needs to be clear understanding of the impact of severed land on the farm business,
whilst this land is retained there will be additional management costs and enterprise change
may be required.
Land which is used for the formation of landscaping bunds, or for the depositing of surplus
soil can seldom be re-instated to its former quality. The unavoidable mixing of soils, soil
moving and storage and compaction all contribute to this but the impacts can be reduced by
a good soil handling plans and good aftercare schemes.
The land around railways is often poorly drained. HS2 ltd need to ensure that they provide
adequate drainage, even for the most challenging seasons and that they can show how is
will be maintained into the future.
The working width needs to be adequately fenced to a standard agreed with the landowner
(based on the needs of the business). Until permanent fencing is erected there needs to be
access to the working width to retrieve escaped livestock.
HS2 need to provide bridges/underpasses where necessary to severed land. There may
also be retirements for permanent easements for electricity, water and irrigation piping. HS2
need to work with landowners to minimise the impact on businesses severed by HS2
COMPENSATION CODE
It should not be assumed that the compensation code will deliver sufficient money to
adequately compensate for all the expenses resulting from compulsory acquisition. To start
with there will have been substantial management time already taken up in looking at ways
of reducing the impact of HS2 through restructuring enterprises or the complete business –
most of this is unlikely to be paid for by HS2 ltd. Substantial resource will have been put into
bi-lateral meetings with HS2, farm and business surveys as well as making representations
to the Draft Environmental Statement, Environmental Statement, all in an attempt to ensure
that HS2 have proper information on which to make their decisions – much of this will funded
by the landowner.
The CLA for over the last 15 years has been an active campaigner for compulsory purchase
reform. Reform is needed so that it resolves
 the issues of blight (through the CLA Property Bond Scheme)
 ensures there is a duty of care placed on the acquirer
 delivers fair compensation,
 eases the process of getting replacement buildings
 minimises land take
 mitigates against tax and poor interest rates
Our proposals are detailed in the appendices
 Appendix 1 - CLA manifesto for HS2
 Appendix 2 - CLA Property Bond Scheme
IMPACT ON OTHER BUSINESSES
Whilst the assessment fails to recognise the impacts on agriculture it also fails to deal with
the impacts on other rural businesses too. In many cases, especially if they are tourismor
leisure businesses they may have already suffered an impact, just because HS2 is planned.
Agricultural businesses have been encouraged to diversify for several decades and
decisions have been made to help sustain the existing businesses, provide additional family
employment or an investment for retirement or another purpose. HS2 have to understand
the business to judge the impact.
A Staffordshire member
Will lose several commercial let properties, uncertainty over how long tenants will stay,
and concerns whether the compensation will be adequate to pay for the replacement of
these units and whether planning consent will be forthcoming as the site is in Green Belt.
There will also be loss of agricultural land and buildings.
Many rural businesses are highly sensitive to location and setting – HS2 will alter this
considerably and therefore may reduce the viability. This is a real risk especially as the
owners of empty commercial buildings are responsible for payment of business rates.
A Northamptonshire member
Whilst no buildings are lost construction will come close to a listed farmhouse which is
used for corporate hospitality, as well as impact on farm buildings that have been
converted into offices. It will also impact on the agricultural operations.
DELIVERING BIODIVERSITY
The CLA was refused admission onto the HS2 Environmental Forum; a forum that would be
setting out the basis on which an excessive area of land will be compulsorily acquired from
our members businesses, farms and homes.
A Buckinghamshire member
HS2 ltd staff and consultants visited a CLA Member with maps showing land take for
environmental mitigation, but he had to hand these back at the end of the meeting.
A Buckinghamshire member
HS2 ltd staff and consultants visited a CLA member with maps showing environmental
land take, but these were kept “under the table” and thus out of view, the member was
not allowed to see them. It later transpired that the additional land take was 100ha.
The Environmental Statement outlines an environmental mitigation strategy which at almost
every stage will over-estimate the mitigation required. This leads to excessive land take and
even worse impacts on businesses and individuals already affected by HS2. There is no
justification for such land take and the Department for Transport should challenge HS2’s
reliance solely on environmental organisations to deliver its environmental mitigation
strategy.
The Metric for delivering environmental mitigation is contained deep within the
Environmental Statement Volume 5 Scope and Methodology Report Addendum, which
makes it difficult for people to find without wading though large amounts of information.
Itstarts at page 364 of a poorly indexed 614 page document. It is entitled “Ecology Technical
Note: Methodology For Demonstrating No Net Loss In Biodiversity”
The CLA is concerned by the use of the Lawton Report in connection with HS2. The Lawton
report was written to address a new way to deliver landscape scale habitat, it was not
prepared as a blueprint for biodiversity offsetting on a linear scheme with a defined
geographical scope. We consider this to be an inappropriate way of delivering offsetting in
a scheme of this kind1.
HS2 ltd is seeking through the Hybrid Bill to get consent for a railway, which will include the
need for some environmental mitigation. There should not be the scope for “bigger and
1SMR
ADDENDUM: ECOLOGY TECHNICAL NOTE 1.5.6
better” habitat creation2, but just to deliver essential mitigation resultant from the impacts of
the scheme.
The CLA was disappointed that HS2 ltd are not going to work with landowners on
environmental delivery3. At every instance when the CLA has addressed this subject with
HS2 ltd they have said that they are prepared to work with landowners to deliver habitat
where this is appropriate, but have failed to do so.
The Metric
The Metric that HS2 use is based on Biodiversity Offsetting Metric consulted on in the
Biodiversity Offsetting Green Paper. This was designed to offset the negative environmental
impacts of commercial development projects in a commercial context rather than a
government scheme delivered through compulsory acquisition. The Metric has not been
consulted on in this context and in any event has not been tried, tested and evaluated in this
way and was devised to deliver Biodiversity Offsetting as part of a voluntary and commercial
approach, which is somewhat different from HS2 .
HS2 plan to use a modified and substantially enhanced version of this Biodiversity Offsetting
metric which again has not been tried, tested or evaluated. It has had no input from the
private landownership sector on whose land the offset will be delivered.
The majority of additions by HS2 ltd see the offset area greatly increased, e.g. increasing the
distinctiveness score for habitats that for part of an area that qualifies as ‘habitat of principle
importance’ and adding multiplier to take into account the effect on landscape scale4. This
coupled with pre and post development indices to take into account the importance of
habitats will mean that a far greater area of land will be required.
Multipliers are added to the offset area to take account of spatial and delivery risks. For a
project so large it would seem unnecessary to add multipliers where the offset is outside a
highlighted area. Where off-sets are provided they can be of a scale and location that allows
added value and linkages to the surrounding landscape.
Phase 1 habitat surveys and National Vegetation Classification (NVC)5 systems are
being used, as opposed to the Farm Environment Plan (FEP) methodology from HLS. Whilst
NVC is more in depth, the habitat inventories (which HS2’s ecologists will be relying upon),
are an amalgamation of historical data from different sources that can only be relied upon if
verified on the ground.
2.6.1. All Field Margins have been allocated a standard width of 10m by HS2 ltd6, however
when mapped agri-environmental margins are in most cases 4 – 6m, It is also proposed to
give them a ‘principle importance’ rating (x6). They is also an assumption that all arable
fields have a standard 1m margin, which will also not be the case, and these will be classed
as moderate distinctiveness (x4 in area). It is unlikely that the margins will be of the extent
2
SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.3.1
SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 1.5.7
4 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 1.5.2 & 3.1.13
5 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 2.1.2
6 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 2.6.1
3
that HS2 envisage, and they are also highly unlikely (as they are only arable field margins) to
have anything like the importance that HS2 ltd attaches to them.
Hedgerows and ditches7 will be replaced like for like on a linear basis. In this case there
will be no assessment of their quality, even where many of the hedgerows would be below
the criteria set out in the Hedgerow Regulations due to their poor quality and lack of species
diversity. Many mapped ditches are unlikely to carry water anymore. In addition to the
condition scores for hedgerows, a multiplier will be attributed for its position within an
ecological network
A new “very high” category of habitat has been inserted by HS2 ltd. It has not explained
why there is any need for this which was not considered necessary within the original
Offsetting Metric and appears to be completely unjustified. This category carries an
increased score which means that further land will be required to deliver this additional
offset8.
Road verges and species poor improved grassland are deemed by HS2 to be of
moderate distinctiveness9 (x4), however in reality this is of low value and it is questionable
whether mitigation of this level can ever be truly justified
Inventory surveys and aerial photography10 can prove to be difficult without accurate
assessment and up to date information. Unless a new inventory survey has been
commissioned by HS2 ltd it is likely that they will be out of date. Over reliance on aerial
photography can also lead to errors in habitat identification, or assessment of quality.
The precautionary approach11 adopted by HS2 ltd is unjustified. Where there is no
evidence of habitat quality HS2 ltd should not assume that it is of a medium or high quality
as there is no evidence for this. A precautionary approach is unnecessary as it will over
deliver the compensatory habitat, where there are indications of positive management this
should indicate a certain quality of habitat. A score of 1 should be the default, with higher
scores being based on evidence. Where an ecologist has not obtained access12 for a site
survey it should not be assumed that the site has a moderate rating as it could be of lesser
value.
BALANCING BIODIVERSITY OFFSETTING
The CLA is concerned that there is nothing within the Hybrid Bill that places a duty on the
Department of Transport, Defra or HS2 ltd to minimise the land take, whether temporary or
permanent under the scheme. Any acquirer given compulsory rights is going to take more
land than it might ever need to deliver the scheme just in case, there is no requirement to
work smarter and to deliver the scheme on a smaller area as a commercial developer
would– thus reducing land take and impacting on businesses less.
7
SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.4 & 3.4.5
SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.1.2
9 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.1.5
10 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.1.7
11 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.2.5
12 SMR ADDENDUM: ECOLOGY TECHNICAL NOTE 3.2.6
8
There is no requirement on HS2 ltd to consider the impact of the whole scheme on
agriculture in England. The Environmental Statement shows a total loss of nearly 5,000 ha
of land of which a proportion is temporary. There is no overall assessment of this impact in
an England wide context.
There is no requirement for the economic impact (of the loss of land, buildings and
severance) to be balanced with environmental requirement. The result is that more land will
be taken that will further impact on properties and businesses already suffering as a result of
HS2.
FUTURE MANAGEMENT OF ENVIRONMENTAL OFFSET
HS2 ltd has not addressed the future management of the environmental offset area, as far
as the CLA are aware.
The CLA have consistently argued that the best way for this compensatory habitat to be
delivered is by the neighbouring landowners where they wish to do so. They are already
onsite, they know the land and they are capable land managers. HS2 ltd seem to have been
content with this approach but have not entered into discussion with any individual
landowners.
It would appear that within the Scope and Methodolgy Requirements that they have also
ruled out involvement of 3rd parties – it is unclear as to whether a landowner/occupier at this
stage would be a 3rd party.
The CLA maintains that, where there is agreement with the landowner, any land required for
mitigation should not be compulsorily acquired but taken on licence (or some other
temporary agreement) for the required period of time and returned to the landowner for
future management.
There appears to be no mention of the future funding of the created habitat. This should be
provided for by HS2 ltd as part of the construction and ongoing costs. Funding from the
Rural Development Regulation should be used.
CLA MANIFESTO FOR HS2
The CLA has actively campaigned for reform of the compulsory purchase regime for around
15 years. We have drawn up a manifesto for the proposed high-speed rail link summarising
how the CLA is fighting on behalf of its members for compulsory purchase reform to deliver
better co-ordination and fairer compensation, against the impacts of the scheme.
The issues and recommendations are below:
BLIGHT


Whether statutory or generalised, all properties within close proximity to HS2 will be
blighted – how the market values and sales prospects are affected – to some extent.
In most cases people will want to stay in their properties for as long as they can, but
when they need to move they should not be disadvantaged by HS2.
Currently, protection of property value through a Blight Notice is only an option for
certain property interests.
Recommendations:



The CLA Property Bond Scheme should be introduced to underpin the market
value of residential property reassuring current owners or future purchasers that they
will not lose out as a result of HS2. The scheme also guarantees compensation to
businesses and agricultural property owners should they wish to relocate or re-invest.
Abolition of Rateable Value limits to blight notices would help many rural
businesses currently being prevented from submitting blight notices.
Enforcement is needed to ensure purchases proceed swiftly after a blight notice is
accepted.
DUTY OF CARE


HS2 Ltd and its contractors should have a duty of care to the landowner and
businesses affected by the scheme.
HS2 Ltd should be responsible for the actions of its contractors.
Recommendations:

Mitigation of the impact of the scheme on property owners should fall to HS2 Ltd.
Owners should not have to rely only on financial compensation but also on mitigation
measures..

An “Independent Person” or ombudsman should be put in position now to ensure
that there is an easy, quick and independent resolution of problems as they occur
and to enforce a duty of care.
LIMIT THE SCOPE OF THE HYBRID BILL

Development and regeneration clauses included in the HS2 Hybrid Bill should be
removed, limiting the opportunity for profiteering by HS2 Ltd as the purpose of the
legislation is to construct a railway, not facilitate other development in the rural area.
Recommendations:

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
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A duty to minimise land take should be placed on HS2 Ltd to prevent unnecessary
and non-essential purchase of land.
Temporary land take should be the default position for most of the land currently
required, either under a licence or a lease with future reinstatement dealt with at the
outset.
Permanent land take should be a last resort and only for land required for the
railway itself.
HS2 Ltd’s rights of access to Phase Two land should be removed from the
legislation. This Bill deals with HS2 Phase One. Adequate voluntary access was
given on Phase One so no additional rights can be justified for Phase Two.
FAIR COMPENSATION
Any compulsory purchase inflicts huge changes on businesses as well as enormous
personal impacts. The compulsory purchase code is too reliant on financial compensation to
be an adequate remedy.
Recommendations:




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A Duty of Fairness should be in place, requiring the acquirer to demonstrate that the
final compensation is fair.
The removal the concept of a “willing” seller and introduce the concept of “market
value”.
Disregard betterment in the same way as any betterment gained by HS2 Ltd will not
be given in increased compensation to the landowner.
Remove Loss Payment ceilings and increase loss payments to 30 percent of the
claim to properly reflect all the losses suffered, tangible or otherwise, by property
owners as a direct result of the scheme.
Enforce the payment of compensation in advance. This payment should be a
realistic reflection of the likely final amount of compensation, not an imposition of the
acquiring authority’s minimum assessment.
Improve compensation for properties adjacent to the scheme, which are held
back by only being able to make “Part 1 claims” but should be entitled to a full claim




for their loss. Owners should not have to wait until a year after the scheme opens,
but should instead benefit from advance payment of compensation under the current
compensation code, or from the CLA Property Bond Scheme proposal.
Negative Equity needs to be addressed to ensure that these property owners are
not pushed further into debt as a result of HS2.
Ongoing Compensation should be provided for in the Bill to ensure that as
significant new unforeseen losses become evident; compensation could be paid
immediately, reducing the burden on businesses.
There should be a statutory right to redress drainage issues even after the rest
of the compensation is agreed because these do not become evident for several
years.
The use of minerals and the right to deposit surplus stone and soil within the
scheme needs to be properly paid for by the acquirer.
VOLUNTARY SCHEMES

The Department for Transport has proposed various voluntary compensation
schemes which only address some of the issues, and are too limited in their extent.
Recommendations


Any voluntary schemes introduced should apply to all property types whether
farms, commercial premises or homes, whether owner occupied or tenanted.
The Exceptional Hardship Scheme needs to be revised as the ‘exceptional
hardship test’ is too difficult to satisfy and has already left many suffering at the
hands of HS2 for many years already.
REPLACEMENT BUILDINGS
There are instances, where buildings are taken as part of the scheme, or their future use is
not possible because of their location. In such instances compensation based on market
value will be inadequate.
Recommendations


Funding replacement buildings should be offered where buildings are lost to the
scheme, rather than just offering compensation at market value
Planning consent for replacement buildings. There should be an onus on HS2
Ltd. to work with local authorities to deliver the replacement, and the local authorities
should be under an obligation to facilitate the planning process to allow the
replacement.
ADDITIONAL FINANCIAL ISSUES



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Capital Gains Tax should not be charged on the proceeds from Compulsory
Purchase to allow the reinvestment of any proceeds when the market and business
conditions allow rather than on a timescale set by the HMRC
Business Rates and Council Tax should not be charged on properties left vacant
as a result of HS2. In both cases a landlord who is unable to find a tenant would have
to fund these after a short period of time.
Stamp Duty Land Tax should not be charged on the purchase of replacement
property.
The Statutory Rate of Interest levied on acquiring authorities for late payment of
compensation is a prescribed rate of half of one percent below Bank of England base
rate – so currently zero percent. This rate needs to be revised to at least the cost of
borrowing to that business, if not a higher punitive rate.
THE CLA PROPERTY BOND SCHEME
INTRODUCTION
The CLA recognise the complexity of “blight” in all its forms. The interrelationship between
the current compensation system and market confidence is extremely clear. Once a scheme
is announced market confidence is lost because property owners have no idea what affect
the scheme will have and how they will be compensated as the scheme goes ahead. The
existing compulsory purchase code is fiendishly complicated with rules and procedures
which many property professionals find difficult to understand, let alone lay property owners.
Blight is exacerbated by the opaque nature of compulsory purchase compensation. The CLA
has argued for many years that the system needs reform. We have published our ideas in
our policy document “Fair Play” which was launched in November 2012. Clear compulsory
purchase rules and procedure which put fairness and a duty of care at the heart of them
would go some way to reduce burden of blight.
However, regardless of any compulsory purchase reforms there is also the need for a
Property Bond Scheme for large infrastructure projects such as HS2, this will ensure market
confidence and allow normal business transactions to continue to take place during the
inception, construction and completion of a scheme.
BACKGROUND TO THE PROPERTY BOND SCHEME
The Property Bond Scheme would apply to all property owners affected by HS2. Its primary
aim would be to deliver certainty to the property and business owners who face a prolonged
period of uncertainty and disruption resultant from the delivery of infrastructure projects.
All large infrastructure projects take decades to deliver. Many businesses are affected by
such proposals, but the most damaging aspects are the uncertainty and business stagnation
that these schemes bring. In many cases important management decisions are put off for
decades and the business is unable to progress. The current law only recognises a tightly
drawn definition of blight which excludes the majority of those affected.
Most property and business owners do not want to move, but are driven to do so to either
avoid uncertainty or to protect their most valuable investment (their home or business). The
Property Bond Scheme allows them to remain in situ, but having the option to move when
they desire without fear that their property and investment will reduce.
HOW WILL THE PROPERTY BOND SCHEME WORK
The Property Bond Scheme would apply to all property owners affected by HS2. It would
apply from the time that a single preferred route is published and finish one year after the
scheme has been completed. This timeframe acknowledges that for many the impacts of
the scheme are most greatly feared after it is first announced, and there is need at the end of
the scheme for any impacts resultant from the operation to be recognised.
HS2 ltd need to produce an amalgamated map showing all the impacts of the scheme –
noise, dust, lights, landscape visibility, and well as transport routes for construction and any
other pertinent matters. HS2 ltd will need to produce reasoned evidence to quantify the
impact of all these matters – this would be based on real evidence not artificial thresholds.
Individuals who own property within any of the areas identified on the amalgamated maps
are automatically invited to join the Property Bond Scheme. Those outside the boundaries of
the amalgamated maps can apply to be included, if they can offer justification.
Landowners will have to register to join the Property Bond Scheme and this will be
registered on their Land Registry Title and will remain until the Bond is redeemed.
HOMEOWNERS
The Property Bond Scheme will work if it confirms and guarantees that the house is due a
compensation payment in the future, be it through compulsory purchase of land or
compensation under Part 1 of the LCA 1973. Its effect is to underwrite the open market
value of the property concerned to its unblighted value until such time as formal
compensation is payable.
If the property needs to be sold before the scheme is built or comes into operation the
property would be formally marketed with the benefit of the bond. The advantage to both
buyer and seller is the implicit guarantee that any buyer will be compensated in the future. If
the property is to be sold then the vendor has a choice at the time to redeem the bond and
sell the property for its blighted value (the redemption of the Bond making up the shortfall) or
selling it for its unblighted value leaving the Bond in place for the benefit of the next owner.
The value of the Bond can only be realised once.
The affect of the Property Bond scheme would be to guarantee timely compensation to
those who suffer most as a result of the HS2, whilst restoring confidence and bringing
stability to what otherwise will have grown into a volatile market.
Houses with land-take
Under the current compensation code where residential property suffers land-take then
compensation is paid following negotiation. Whilst there is provision for an advance
payment this is seldom sufficient and often not paid on entry. The Property Bond Scheme
would deliver a guaranteed sum negotiated in advance of the scheme, and the bond could
be redeemed at any time once the scheme is confirmed (Royal Assent). The Bonds value
would be calculated at the time of redemption and would be the value of the land taken and
the injurious affection and severance claims.
Houses without land-take
Under the current compensation code where residential property suffers no land-take, the
earliest time when a claim can be made is a year after the scheme is in use – which could be
more than 20 years away and the heads of claim are very limited. The Bond would allow the
value of a property to be underwritten so if it was sold then either the vendor redeem the
Bond and thus be compensated for his loss or the sell the property with the benefit of the
Bond.
The Value of the Bond
This is the value by which a property, at a specific point in time, has reduced in value as a
result of the scheme. The exact value will depend on when the Bond is redeemed and will
vary depending on the impact of the scheme on the property and the impact of HS2 on the
property market at that time.
It is proposed that if there is an intention to market a property that benefits from a Bond, a
notice of “intention to sell” should be served on HS2 ltd. If the intention is to redeem your
bond HS2 ltd will require the necessary valuation evidence to justify the claim at least a
month before the sale. The agreed Bond value would be released at the time of completion.
If the Bond is not redeemed then its final value will be the same as the amount of
compensation that would be payable under the compensation code.
NON RESIDENTIAL PROPERTY
The blight of a major infrastructure scheme for agricultural and other businesses takes a
different form to the residential owner. For individuals in this category be they landlords
(whether urban or rural) of tenanted properties, owner occupiers or tenants the blight is one
of uncertainty and the difficulty of predicting the timing of the loss of land, buildings or
access, as well as the difficulty of predicted the quantum of the eventual compensation.
In the case of agriculture and business the Property Bond Scheme would therefore be quite
distinct. It allows for early negotiation of the estimated final compensation package at the
outset of the scheme which would be secured as a Bond.
It will allow compensation to be negotiated and the principles to be agreed way before the
parliamentary process is completed thus giving some certainty as to the compensation that
will be paid to allow the business to consider future reinvestment flexibly. This would also
mean that the acquirer would have to consider the impact and potential mitigation measures
at the outset rather than as a last resort.
This Bond can be redeemed at any time and there is no preclusions on renegotiation should
the compensation agreed as part of the Bond prove to be inadequate as a result of the
construction and operation having a greater adverse impact.
We foresee the value of the Bond will assist businesses in the early stages of a scheme
make ongoing business decisions e.g. to invest in replacement land/buildings or secure
finance against the value of the Bond.
RIGHT OF APPEAL
There must be a full right of appeal to an Independent Body before final resort to the Upper
Tribunal.
ADVANTAGES OF THE PROPERTY BOND SCHEME
Advantages to Acquirer
 Reduce impact of currently uncompensated blight
 Compensation is paid without HS2 unnecessarily having to property it does not
require
 Land purchased earlier in scheme, so greater flexibility
 Compensation is only paid when there is a proved loss
Advantages to Property Owners
 Value of property underwritten against the effects of the scheme
 There will be certainty as to compensation provision
 By offering a Bond there will be a reduce need for property owners to sell
 Allow the vendor/purchaser the choice to claim the value or retain the Bond
Andrew Shirley
Chief Surveyor
Country Land and Business Association
andrew.shirley@cla.org.uk
July 2013