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Presentation Property Compensation

Presentation Property Compensation. Hilary Wharf, Director HS2AA 7 November, 2013. Summary: our agenda for change.

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Presentation Property Compensation

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  1. Presentation PropertyCompensation Hilary Wharf, Director HS2AA 7 November, 2013

  2. Summary: our agenda for change • New policy: We must modernisecompensationarrangements for national infrastructure projects. Compensation must reflect the real extent& severityof blight, not 60/120m limits that are not grounded in evidence; & not ignore the timescalesinvolved • Property Bond approach (to support market, private sales, give assurance): • To replacethe Hardship Scheme (not Voluntary Purchase Scheme (VPS). • To apply to properties beyond any VPS area /Safeguarded area. • A possible balance between a distance-based limit and a minimum threshold loss. • A long-term scheme: should not contain hardship rules- these are about a person’s circumstances and are unrelated to the blight. • The loss suffered: Government should put the full value in the HS2 business case. • Mistaken statements: DfT to correct mistaken Deloitte statements on Property Bonds – (HS2AA’s & Central Railway) and on extent of blight (and provide the evidence). • ….half a million properties are within 1km of HS2, need Government to be fair

  3. What’s at issue? • How much blight is there?: • EHS cases: extent: out to 1.1km (even HS1 was 600m); • average: 200m - 300m (HS2 Ltd provided) • severity: known, but not released. • CBRE report: extent: study used postcodes of average 2.29km size (but too wide) • severity: consistent with av. 19.5% loss within 1km (27.7%rural /11.3%urban) • Estate agents: extent: out to 500m; 1km; 1 - 3 miles. Greater in rural areas • severity: 20%, 30% and even 40%; unsaleable by line/in affected villagesProperties potentially affected: ……….blight may be temporary, but HS2 takes 13yrs /20yrs

  4. What’s on offer? …………. amounts to under 2% of properties blighted being compensated

  5. What’s wrong with hardship basis? • Availability of compensation: not proportionate to the loss incurred, but relates to a persons capability to withstand the loss (effectively means tested) • Only helps a minority: the majority who lose ££ are excluded - 30-40/a. • Unjust:individuals should not bear the loss (‘polluter pays’) for project said to be in national interest. “Fairness “ criteria should not just be the worst affected • Inappropriate for HS2 timescales:for 15/20yrs • Traps people:loss of freedom to move, re-mortgage. • Exacerbates blight:no prior knowledge clause guarantees a new purchaser doesn’t qualify – and will only pay a blighted value. • Paralyses the market for 15/20yrs: need the surety of compensation if the market is to have confidence restored.

  6. So why is a property bond better? • Property Bond: a “win-win” solution: • Fairly compensates all those blighted (and not just right next to line) • Should replace Hardship scheme not Voluntary Purchase Scheme • Restores market confidence and reduces blight itself (by providing reassurance to owners, prospective purchasers and mortgage lenders of protection against losses) “Insurance policy” approach • Can avoid opposition to HS2 driven by fear of a large uncompensated losses (by saving the indirect cost of objections and resultant concessions) • Self-financing:if HS2 has little impact when built as Government say, then Government gets its money back (renting out in the interval) • Can cost nothing if HS2 is cancelled – like Central Railway

  7. Could a balance be struck? • Government fear unlimited liability • but temporary loss if prices bounce back – so it’s really a cash flow issue • Fairnessrequires compensating all material losses, which are not neatly clustered within so many metres of line. • The property bond might involve a mixture of: • a base distance limit eg 500m, and for beyond this limit • being able to demonstrate a minimum threshold loss .…it’s surely time to take a step forward in modernising arrangements?

  8. The consultation materials • Deloitte report: by own admission had little time to investigate/check details. • Devised proposals without ref. to evidence of blight from EHS, CBRE, other sources. • Misinterpreted core Central Railway and HS2AA evidence that influenced findings. • DfT knowledge: had HS2AA and Central Railway evidence, letters; meetings with Central Railway too; consultation responses; had blight evidence. • Claim: Central Railway scheme • Not targeted on property blight: incorrect (main purpose, 1997 Gov report recognised) • For line-side/adjacent homes needed for construction : incorrect (much further) • No evidence of effect of bonds on property market: incorrect (35% sold /re-mortgaging) • Claim: HS2AA scheme • High up- front cost from getting valuations: incorrect (scheme says do when sell, like EHS) • No one has had a scheme with no distance limit as HS2AA’s: incorrect (C Railway) • HS2AA included statutory add-on sums: Incorrect

  9. Summary: our agenda for change • New policy: We must modernisecompensationarrangements for national infrastructure projects. Compensation must reflect the real extent& severityof blight, not 60/120m limits that are not grounded in evidence; & not ignore the timescalesinvolved • Property Bond approach (to support market, private sales, give assurance): • To replacethe Hardship Scheme (not Voluntary Purchase Scheme, VPS). • To apply to properties beyond any VPS area /Safeguarded area. • A possible balance between a distance-based limit and a minimum threshold loss. • A long-term scheme: should not contain hardship rules- these are about a person’s circumstances and are unrelated to the blight. • The loss suffered: Government should put the full value in the HS2 business case. • Mistaken statements: DfT to correct mistaken Deloitte statements on Property Bonds – (HS2AA’s & Central Railway) and on extent of blight (and provide the evidence). • ….half a million properties are within 1km of HS2, need Government to be fair

  10. Other points Other detail on the consultation proposals……..

  11. DfT’s five criteria DfT say the decisions will provide in “Government’s reasonable opinion” the “best balance” between the five criteria: Fairness – nowredefined to “most directly & specifically affected” Value for money –for the taxpayer Community cohesion Feasibility, efficiency and comprehensibility – or simplicity Functioning of housing market Nothing about the ‘polluter pays’ Nothing about fairness to all those suffering blight Nothing about the weightings of the 5 criteria given to Deloitte ……the decision depends on weightings that are not given

  12. Express purchase

  13. Long-term hardship scheme …….the property bond should have been the alternative

  14. Voluntary purchase scheme (VPS)option for Rural Zone ……….so what’s the other option being offered?

  15. The property bond option for Rural Zone ……the option is narrower than back in 2011 (property bond v hardship)

  16. The practicalities How, what and when……..

  17. Consultation questions • The 7 questions ask for your views on the: • The Criteriaput forward to assess options for long-term discretionary compensation? • The proposals for an express purchase scheme? • The proposed long-termhardship scheme? • The sale and rent back scheme? • The alternative proposals for renting properties to their previous owners? • The proposals for a Voluntary Purchase Scheme in a “Rural Support Zone”? • The option to introduce a time-based Property bond scheme within a Rural Support Zone as an alternative to the Voluntary Purchase Scheme? • There are Maps, Consultation Document, a Deloitte report on HS2 Ltd website: • HS2AA have published some guidance to consider www.hs2aa.org . ……remember the 4 December 2013 deadline

  18. How to Reply • It must be done by 4 December 2013 • Use a response form and send it to Freepost address on the form. • Or e-mail it direct to 2013hs2propertyconsultation@dialoguebydesign.com • Go online at https://2013hs2propertyconsultation.dialoguebydesign.net/ • Answer any or all of 7 questionsand send by e-mail or post to "FREEPOST RTET-YGJB-GUAH, PROPERTY COMPENSATION CONSULTATION 2013, PO Box 70178, LONDON, WC1A 9HS • TIPS • Have one family member do a full response , others do a postcard. • Don’t just answer the questions– demand fair compensation, and reject HS2! • Mention your village/chilterns/AoNB – it gets in the summaries of responses • Suggested points to make are on HS2AA website too Remember the 4 December 2013 deadline

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