UK: HS2: Need To Sell Scheme – Everything You Need To Know

Last Updated: 11 July 2018
Article by Iain Johnston and Sarah Beer

The Need to Sell Scheme (NTS) is a discretionary scheme available to any property owner-occupier who has a compelling reason to sell their property but has been unable to do so (other than at a substantially reduced rate) because of the proximity of the HS2 route.

On the face of it, the scheme seems pretty straightforward – until you realise that the success rates are pitifully low. At the moment, only 40% of applications for compensation under the NTS are successful. Mindful of the burgeoning cost of the overall project, HS2 is applying its qualification criteria to the letter in order to minimise the number of compensation pay outs (a successful application means that HS2 will purchase the property at full (unblighted) market value). Therefore, although any property owner can apply directly, the statistics indicate that their chances of success are limited.

Although the level of detail required is the first hurdle to negotiate, most applications fail because their evidence of a compelling reason to sell falls short of the required standard. In addition, the level of scrutiny applied throughout the approval process suggests that an applicant is already on the back foot before a page is read. Applications are considered by a panel of three independent professional members on a case by case basis. They will recommend to the Secretary of State for Transport whether each case should be accepted. The application will then be reviewed by a senior civil servant or the Secretary of State for Transport.

So, what criteria must you meet in order to be eligible for the scheme and for your application to stand a stronger chance of success? The following guide gives you some idea of the challenges ahead:

Private Residence

You own the property and must either:

  • live in the property and have done so for the last six months or, if the property is empty, you must have lived there for six months prior to it being empty and the property has not been empty for more than 12 months; or
  • be a reluctant landlord and do not own any other properties; or
  • be the Personal Representative of the deceased owner; or
  • be a mortgagee with an interest in the property.

Business Premises

NB: only small businesses can apply for compensation, defined as those with an annual rateable value of up to £36,000 in rural areas (or £44,200 per year in Greater London).

You own the property and must either:

  • have owned the property and operated a business from there and have done so for the last six months or, if the property is empty, you must have operated a business from the property for at least six months prior to it being empty and the property has not been empty for more than 12 months; or
  • be the Personal Representative of the deceased owner; or
  • be a mortgagee with an interest in the property.

Agricultural Unit

You own the unit and must either:

  • have occupied the unit for at least six months and your main residence is located on the unit or, if the unit is not occupied, you must have occupied the unit for at least six months prior to it being unoccupied with your main residence being located on the unit at that time and the unit has not been unoccupied for more than 12 months; or
  • be the Personal Representative of the deceased owner; or
  • be a mortgagee with an interest in the property.

An agricultural unit is defined as land which is occupied for agricultural purposes, including any dwelling house or other building occupied by the same person for the purpose of farming the land.

What evidence do you need to provide?

  1. Your property is so close to HS2 that it is likely to be adversely affected by the construction or operation of HS2. However, distance is not the only factor that the panel will consider. They will also look at characteristics of the property and the nature of its area, the character of the HS2 line, the likely impacts of the construction of the line on the area, the topography of the area, and the distance to any points of significant change to the character of the line (i.e. tunnel entrance or viaduct).
  2. Evidence of the effort that has been made to sell the property and why the property has not sold (other than at a substantially reduced value). The panel would normally consider:
  1. Marketing proposals for the property from at least three recognised estate agents including a realistic valuation had HS2 not been within the vicinity, or written evidence that at least three agents are refusing to take on the property due to HS2;
  2. Evidence that the property has been on the open market with a recognised estate agent for at least three months immediately prior to the date of application for NTS;
  3. Feedback from viewings or feedback from those who chose not to view the property;
  4. Evidence that you have not received an offer within 15% of the price the property would have been had HS2 not been within the vicinity.
  5. Evidence that you bought the property before publication of the HS2 route section closest to your property; or, if the route had already been published, evidence that only limited information was available at the time of purchase.
  6. Evidence of a compelling reason to sell including health and / or family life stages (in the case of a private residence), financial, employment, and winding up a deceased's estate, etc.

There are many reasons why you might need to sell. The panel is looking for evidence that you would suffer an unreasonable detriment within the next three years if you cannot sell your property now. If your application is accepted, you must start the process of selling your property to HS2 within three years of the acceptance date. If you don't, then your acceptance will no longer be valid and you will need to reapply.

Our HS2 team is regularly instructed by clients to deal with 'Need to Sell' applications on their behalf and, to date, our success rate is 85% – a significant improvement on the 40% average published by HS2. Specifically, we can:

  • advise on the relevant criteria for an application.
  • advise on whether your property meets the location criteria .
  • progress an application on your behalf.
  • review an application that has been refused and progress a second application on your behalf.
  • deal with the property transfer exercise to HS2 once the application is accepted .

Applying for compensation under the 'Need to Sell Scheme' is not for the fainthearted. It is a tortuous process and the qualification bar has been set deliberately high. We understand that you will want to minimise any expenses incurred in dealing with any compensation claim – and understand that for many people, this can be an emotional journey. However, by consulting specialist advisers who know how to craft a successful application, you stand a much better chance of getting the level of compensation you deserve: the statistics speak for themselves. We can also advise on Express Purchase, Rural Support and Blight Notices as well as Compulsory Purchase.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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