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Property Blight Compensation

Volume 559: debated on Tuesday 5 March 2013

Motion for leave to bring in a Bill (Standing Order No. 23)

I beg to move,

That leave be given to bring in a Bill to require the Secretary of State to amend legislation to allow for noise contours to be used as a measure of property blight caused by national infrastructure projects; and for connected purposes.

Having represented a constituency at the heart of the midlands motorway network for almost 16 years, I have seen the impact of successive efforts to improve the national transport infrastructure, often with harsh consequences for local residents. Early in my tenure, I visited a family whose home was just beyond the threshold for compensation on the hard shoulder of the M42, despite the fact that the motorway noise blighted their property as much as their next-door neighbours who got compensation. The M42 has vastly exceeded its intended capacity and the hard shoulder is now used for active traffic management, so the property would now be eligible on simple metreage.

A few years later, the White Paper on aviation proposed a second runway at Birmingham airport, which came as a bolt from the blue for local residents. Immediately, they had difficulty selling their homes, yet no statutory compensation was available.

The airport came up with a proposed voluntary compensation scheme based on noise contours rather than straight metreage from the runway, which gained broad public support. The airport maps the noise contour of every flight, so there is a strong scientific base for estimating noise nuisance and taking account of the prevailing winds. Most recently, the proposal of HS2 has brought a new blight to villages and a council estate in my constituency. Once again, statutory blight laws mean that compensation will not be paid until one year after HS2 opens in 2026, except on the grounds of hardship, which are, of course, discretionary. That adds yet more uncertainty. Although blight is often most severe when uncertainty is at its highest, and when HS2 is built the impact on properties will probably be much less than feared, the blight is now.

Large infrastructure schemes can take a huge amount of time to progress from the initial announcement to completion of the scheme. During that process, the scheme will often change as more information becomes available, although home owners or landowners do not know that at the time. As the Country Land and Business Association points out, farmers and landowners are prevented from making important business decisions, sometimes for a whole generation. That impacts not only on those individuals, but on their suppliers and markets.

Statutory blight and compulsory purchase provisions do not encourage an acquiring authority to conclude compensation negotiations quickly. Although provisions for paying interest on outstanding claims are available, the statutory rate is 0% and the landowner foots the loss at a cost of 5% per annum. Some claims will remain outstanding for 10 years. For example, some landowners have still not been compensated for the building of the M6 toll road.

The Land Compensation Act 1973 makes provision for compensation for the depreciation of property values caused by physical effects such as noise, but such compensation is available only a year after the infrastructure is built. The blight is now, and current metreage-based compensation does not help those who may feel the same physical effects of the scheme as their neighbour, but are a few extra metres away.

I believe compensation should be paid in advance of the railway opening, in anticipation of the nuisance it will cause as modelled by noise contours. If accurate scientific information about the physical effects of the line on properties was made available, it would ensure that residents receive proper compensation, reduce the level of uncertainty about the effect of the line, and therefore reduce blight. We must be clearer about noise data sooner and clear up the fear that causes generalised blight.

The HS2 voluntary compensation scheme is an example of how the rigidity of the metreage approach does not address blight. Homes within 60 metres of the track are safeguarded by compulsory purchase provisions, and those within 120 metres can be purchased on a voluntary basis. However, the eligibility criteria ignore the prevailing wind direction or contours in the land that shield or aggravate noise. My Bill is designed to make the eligibility for compensation fairer and more scientifically based, and create parity between roads, rail and airports. Such a proposal does not detract from the property bond proposed by other pressure groups seeking better terms of compensation for those affected. I am aware of the broad base of support for the property bond compensation scheme that would tackle the root cause of property—the loss in property market confidence.

To give one example from many, my constituents, Mr and Mrs Hickin of Berkswell, live about 500 metres north of the HS2 line past their village. Their interest-only mortgage must be repaid in 2015 and they had planned to downsize to a smaller property and pay off the debt. Despite being on the market for nearly three years and reducing the price of their home by £90,000, they have received no offers and live with the worry that they will not be able to meet their financial obligations. Other constituents whose properties have been on the market for several years have not received any offers, even when dramatically reducing the price. That is not unusual among affected constituencies such as those of my neighbour, my hon. Friend the Member for Kenilworth and Southam (Jeremy Wright) and my right hon. Friend the Member for Chesham and Amersham (Mrs Gillan). On average, properties have lost 20% of their value. The exceptional hardship scheme suffers from a lack of credibility. The Government will be consulting on phase 2 of that, so why not bring it forward and consult on amendments to phase 1?

When Birmingham airport proposed its voluntary compensation scheme, it was designed to support the sale of property within a defined boundary of the noise contour with a bond. The level of noise recognised by the aviation industry to trigger voluntary compensation is 66 dB. The boundary of eligibility was drawn with sensitivity around semi-detached properties where one property might be eligible but the other not, so as to avoid the kind of rigidity I experienced with motorway compensation. The bond was based on an independent valuation of the difference between the base price before the announcement and the reduced price thereafter. An independent commissioner was appointed to review any complaints that compensation had been incorrectly calculated and applied.

I believe that model offers a more scientific basis for eligibility for property bonds and would allow many people now experiencing blight from major national infrastructure projects to receive fair recognition and move on with their lives. Essentially, it would bring forward part 1 payments under the Land Compensation Act.

In conclusion, blight laws must be reviewed and changed to help those who, through no fault of their own, are blighted by decisions made in Westminster. In the long term, HS2 is vital for this country’s economic progression and for the west midlands economy in particular, but we should not balance the books on the backs of home owners and landowners whose property may reduce in value. Adding flexibility to the way blight is measured, removing the strict metreage classification in the current compensation scheme, and recognising the loss in value through a property bond would be a welcome reform for many.

Question put and agreed to.


That Mrs Caroline Spelman, Mr Graham Brady, Andrea Leadsom, Mrs Cheryl Gillan, Dan Byles and Mrs Anne Main present the Bill.

Mrs Caroline Spelman accordingly presented the Bill.

Bill read the First time; to be read a Second time on Friday 26 April, and to be printed (Bill 144)