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Home Loss Payments (2009)

Volume 497: debated on Monday 12 October 2009

The Government have decided not to amend the thresholds for Home Loss payments in 2009. In previous years, since 2003, new thresholds have come into force on 1 September.

Home Loss payments are part of the land compensation system and are paid to owner-occupiers and tenants following compulsory purchase or displacement by housing orders or estate redevelopment. Owner-occupiers receive 10 per cent. of the value of their property—subject to maximum and minimum thresholds—and tenants receive a flat-rate equal to the minimum payment for owner-occupiers.

The thresholds have risen steadily until 2008, when the maximum payment was £47,000 and the minimum and flat-rate were £4,700. The 2009 review indicated that the thresholds could be reduced to £41,000 and £4,100—slightly above the 2006 levels.

The thresholds and flat-rate mainly bite at the minimum level, as very few high-value properties are taken in the normal run of compulsory purchase orders. The people most affected would be those owner-occupiers with properties worth less than £47,000 and tenants receiving the flat-rate, typically those in clearance areas or estate redevelopment schemes by registered social landlords.

The people caught up in these schemes are quite vulnerable, and the Government believe that reducing their home loss payments by £600 (from £4,700 to £4,100) would make life more difficult for those who are already in a very difficult situation. We have therefore decided not to reduce the thresholds this year.