High Speed Rail Link Offers Exceptional Hardship Scheme for Property Sellers

Michael Dibben, Property & Conveyancing Partner at solicitors Brethertons LLP, discusses the recent successful applications by home-owners facing the High Speed Rail Link route from London Euston to Birmingham International and how best to approach a voluntary purchase application.

At Brethertons we have assisted one of the first home-owners in the UK who have successfully applied to have their property bought by HS2 Ltd under the Government’s Exceptional Hardship Scheme.  

Anyone trying to sell a property close to the proposed route of the High Speed Rail Link on the open market is now likely to have considerable problems in achieving the purchase price they could have expected if the rail link proposals had not been announced.  Very few potential buyers will want to buy a property so close to the noise and disturbance that high speed trains bring travelling at speeds up to 200mph.  Even if they may be prepared to put up with the inconvenience, they will fear they would not be able to sell the property later.  Property-owners have three options:

1. Private Sale - You can try and sell the property in the normal way, but accept that – if you can sell at all - then the price will be seriously affected.
2. Compulsory Purchase Order - If your property is in the direct path of the High Speed Rail Link route (the route won’t be finalised until after the consultation process expected to end in late 2011) then you will be contacted by HS2 Ltd as part of their Compulsory Purchase Order Scheme expected 2015 when works begin.
3. Exceptional Hardship Scheme - If your property is affected by its proximity to the proposed High Speed Rail route which was published on 20 December 2010 and you have plans to sell your property with urgency, you can apply to HS2 Ltd as part of the government’s Exceptional Hardship Scheme and – if you succeed - HS2 will purchase the property from you, offering 100% of its ‘unblighted’ market value (conditions apply). This is a voluntary purchase scheme available whilst the final decision is being taken on the High Speed Rail Link.

Exceptional Hardship Scheme

To be eligible to apply under the Exceptional Hardship Scheme, a home-owner must submit a formal application to the Exceptional Hardship Scheme Panel and meet specific criteria.  The process for the application is paper-based and an application is posted to HS2 for their consideration.  The application must include evidence to prove that it has met all of the conditions required.  No consultation is permitted and the application is either accepted or rejected.

Eligibility criteria include:

1. A qualifying interest in the property - (You must be the owner - freeholder/leaseholder, executor, mortgagee, owner-occupier etc.)
2. Your property must be directly in line of the route or close proximity
3. Effort to Sell – you must have been marketing the property for 3 months and not received any offers of 85-100% of the market value
4. No prior knowledge – you must have bought the house before 11 March 2010 when the route was initially announced
5. Exceptional Hardship – you must have a pressing need to sell your property and would suffer exceptional hardship if you had to wait [to late 2011].

Exceptional Hardship includes domestic, employment, financial and medical considerations, all of which have to be supported by evidence acceptable to HS2. For example, your employer may wish to relocate you to another region, or a relative is ill and needs disability services or needs to go into a nursing home, or a divorce is underway, or repossession proceedings are in progress.  These are examples of the some of the exceptional circumstances that would warrant a voluntary purchase by HS2 Ltd.  A full list of the criteria and an application form can be seen at the website link below.

Michael Dibben spoke about a recent successful sale to HS2 for one of his Oxfordshire clients:

“The house or property has to have been on the market for at least three months prior to the application and have not sold in that period.  The application process under the Exceptional Hardship Scheme was then relatively straightforward, though all the supporting evidence and independent valuations had to be compiled.  It took a few weeks to get the formal acceptance from HS2, but once HS2 had instructed solicitors we were able to get to a point where we were able to exchange contracts in less than 2 months.  Our clients were awarded 100% of their ‘unblighted’ property market price.” 

“Once the application has been accepted, the owners of the property then exchange contracts with HS2 Ltd in the normal way, as with any other conveyancing matter. The property is then owned by HS2 Ltd.”

In February 2011, the government proposes to launch a full public consultation for its high speed rail strategy and route which is expected to last until late 2011.  It is only until then that Exceptional Hardship Scheme applications can be made.

“I need to emphasise that property owners considering making an application under the Exceptional Hardship Scheme ought to do so as soon as possible during 2011 as it is likely that applications will not be accepted by the Exceptional Hardship Panel after the end of the consultation period, late 2011.”

It is important to appoint a conveyancer who has experience of the process and the Scheme, so that you can benefit from their legal expertise of land and property matters, but also so that the criteria of the application is met in the right way to ensure a successful outcome.

Property owners interested in finding out more about the Exceptional Hardship Scheme and applications can contact Michael Dibben, Property & Conveyancing Partner

More information can be found at:

www.dft.gov.uk/highspeedrail
Public Enquiry Line (0207) 944 4908
Hs2enquiries@hs2.gsi.gov.uk 
Department for Transport (High Speed Two Limited)
http://www.dft.gov.uk/pgr/rail/pi/highspeedrail/proposedroute/maps/  
http://www.hs2.org.uk/exceptional-hardship-scheme?pageid=1