In October, prime minister Rishi Sunak announced the scrapping of HS2 Phase 2 line between Birmingham and Manchester following weeks of speculation.
The HS2 line was originally designed to provide high-speed travel between the North West and the South East of England, stopping at Manchester, Birmingham and London.
According to Jonathan, the uncertainty around compulsory purchases — whereby the government does not require permission from the owner or occupier to purchase land or property that falls within path of a public works project, such as a road, or in this case a railway — left scores of people and businesses in a state of limbo when their blight application — a request for the government to buy a property if it falls within a safeguarded area — was unsuccessful or they did not qualify.
Qualification for blight depends on a few factors, including whether you have at least three years left on a lease at the time of serving a blight notice, and then whether a private residential property is fully or partly within a safeguarded area. While, for business premises within the Greater London area, the annual rateable value can be no more than £44,200, and £36,000 for the rest of England, in order to qualify.
Jonathan claimed that with the government providing no certainty as to whether it will buy land from those on the original HS2 route but who do not qualify for the government to buy their land or property, some have been left without the ability to sell to others.
“For an awful lot of people, they were left in a world of uncertainty, not knowing when their property was going to be acquired,” said Jonathan.
“They knew it was needed for the scheme, but they didn't know when — and they've lived like that for years without any ability to ask HS2 to buy from them, and then suddenly HS2 walks away from it and says, ‘We're not buying it after all’.
- The Finance Professional Show 2023: The Video
- HS2 delivers a much-needed boost to regional economies
- Long-term industry outlook is 'severely dampened due to the axing of HS2', says RSM UK
“That period of uncertainty has caused a lot of people a huge amount of stress and anxiety.”
“I’m aware of couples who’ve divorced because of the stresses put on them,” Jonathan added. “People have been displaced without any good reason because the scheme’s not going ahead.”
Safeguarding Directions — a technical term for an established part of the planning system that aims to protect large-scale infrastructure projects, such as roads or railways, from conflicting developments — were issued for the three separate phases of the HS2 route, which meant Local Planning Authorities (LPAs) had to consult HS2 on new and undecided planning applications which fell within the safeguarded area.
According to Jonathan, these Safeguarding Directions meant that some planning permissions for land acquired by developers were denied, while other housebuilders had to abandon developments altogether after being unable to sell the houses once HS2 identified them for demolition.
“You've got [developers] who [either] couldn't get planning consent or who were building and had to stop,” added Jonathan, claiming they will have little route to any compensation now.
Consequently, the impact of HS2 is not only reserved for developers left with abandoned projects but could result in a longer lasting and deeper issue affecting market sentiment and, therefore, future land values and developments.
Jonathan claimed that the plans for HS2, while scrapped for now, may not be gone for good. He identified a need for such rail projects between Birmingham and Manchester, which means that, eventually, plans for a high-speed rail line could come back into the spotlight, creating further uncertainty for developers, businesses, and homeowners along these routes.
“For people who are along the route, it’s likely that house prices and commercial property values will continue to diminish because of the association and perception that someday it might come back,” predicted Jonathan.
“I think it’ll have a long-term effect, even when they remove the Safeguarding Directions.”
Moving forward, Jonathan feels that the government should change its approach to statutory blight when it comes to projects of national significance.
“As a country, we need to be prepared to put our hand in our pocket and buy land and property from people who are along the route within that red line boundary to give them certainty and let them move on.”