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  • Property Compensation Schemes

     

    On 16 December 2020 the Supreme Court allowed Heathrow’s appeal in the legal proceedings relating to the Government’s Airports National Policy Statement (ANPS). In overturning the earlier Court of Appeal decision, the Supreme Court found that the Paris Agreement on climate change was lawfully taken into account when the ANPS was prepared.   This decision sees the ANPS reinstated as Government policy.

    Whilst recovering from the devastating impact of Covid-19 will remain our priority, Heathrow expansion will help the country’s future economic recovery and success on the global stage post-Brexit. This privately funded project will secure the global links that the UK needs and will create tens of thousands of jobs across every nation and region of the UK, supporting the Government’s levelling up agenda. We are now consulting with investors, government, airline customers, and regulators on our next steps.

    We have supported the local community throughout this unprecedented pandemic, and we remain committed to doing so moving forward. We know the benefits that Heathrow expansion can bring – increased trade, travel and jobs for the local community as well as across all of the nations and regions of the UK. But we also appreciate there are some who are dealing with a huge amount of uncertainty at this time. We are committed to continue to work through this process and bring clarity as soon as possible.

    Property Policies update

    As part of our expansion proposals, we developed a set of discretionary property compensation schemes, including enhanced compensation for qualifying owners or occupiers of eligible properties affected by our proposals. The schemes were set out in our interim Property Policies, which explained our general approach to buying properties and land and set out the discretionary compensation offers available for eligible properties.

    We would like to thank all those who submitted feedback on our Property Policies. Since the close of our Airport Expansion Consultation, we have reviewed the feedback and will provide a further update at an appropriate time.

    Interim Property Hardship Fund

    Heathrow recognises that the Supreme Court’s decision in December 2020 reinstating the Airports National Policy Statement (ANPS) has reignited interest in Heathrow Expansion and the property compensation schemes we had made available. Since that decision, Heathrow has been taking steps with a view to reopening the Interim Property Hardship Scheme. We have had to consult with a range of stakeholders.

    From 1st May 2021 Heathrow’s Interim Property Hardship Scheme will be reinstated, and applications can be submitted. The scheme will run under the same terms as it did previously.

    The Interim Property Hardship Scheme is available to eligible property owners who have a compelling need to sell their property but have been unable to do so, except at a substantially reduced price, as a direct result of the proposals for the Heathrow Expansion Project – and as a consequence are facing significant hardship.

    Our discretionary interim policies are intended to supplement and operate in parallel with the existing statutory regime governing compensation for the compulsory acquisition of land. This Interim Property Hardship Scheme policy goes beyond the statutory compensation regime.

    To qualify to have a property purchased by Heathrow under the Interim Property Hardship Scheme, an applicant must satisfy ALL the five criteria below:

    (a) qualifying interest; (b) no prior knowledge; (c) proximity; (d) efforts to sell; and (e) hardship.

    Applicants will need to provide evidence to demonstrate that they satisfy each individual criterion.

    Applicants will need to submit a completed application form together with supporting evidence. A copy of the application form is available by contacting:

    Natasha Lamptey
    CBRE Ltd
    St Martin’s Court
    10 Paternoster Row
    London
    EC4M 7HP
    Email: heathrow@cbre.com
    Telephone:  020 7182 2146

    As soon as we have received an application, we will provide a written acknowledgement of receipt. We will then check through the application to make sure all sections have been completed and that supporting evidence has been provided, to enable the independent panel to then assess the application. We may contact the applicant’s estate agent(s) or other persons to independently verify information contained in the application.

    Please take a look at our interim property hardship scheme policy to consider whether you might eligible.

    Next steps

    We remain committed to working with local communities. If you have any concerns or queries, please contact the Community Relations team on 0800 307 7996 or email communityrelations@heathrow.com.

     

    Property Compensation - Statutory Blight

    The Secretary of State for Transport designated the Airports National Policy Statement (Airports NPS) on 26th June 2018. This marks an important milestone in the process of creating additional runway capacity for the UK and it means that property owners within the red line boundary in Annex A to the Airports NPS may now be eligible to serve a statutory blight notice asking the Secretary of State for Transport to buy their property.

    A copy of the Airports NPS Annex A red line boundary is available here, and the full Airports NPS is available here.

    Statutory blight is when the value of a residential or agricultural property or small businesses property (based on an annual rateable value less than £44,200) is reduced because large scale or major development proposals are identified in a policy, an application or a consent that makes it difficult for owner-occupiers to sell their properties at their market value.

    Planning legislation provides a procedure that allows a property owner who has been unable to sell their property, except at a substantially reduced price, to serve a blight notice. Where a property owner meets the statutory requirements they may have their property purchased by the appropriate authority, which in the case of the Airports NPS is the Secretary of State for Transport.

    What would eligible property owners be entitled to if a blight notice is accepted?

    If a blight notice is accepted, the property would be purchased, and the owner would receive:

    • the unaffected open market value of the property; plus
    • a property loss payment as set out in legislation and calculated by reference to the property’s existing/current use, currently being:
    • 10% of the unaffected market value for homes (including farmhouses) subject to a cap of £64,000; or
    • 10% unaffected market value for commercial properties, subject to a cap of £100,000; or
    • stamp duty costs associated with the purchase of a property up to an equivalent value; plus
    • reimbursement of reasonable legal fees and removal or other disturbance costs in accordance with the statutory compensation code.

    Any person considering serving a blight notice will need to comply with all legal requirements relating to the content and service of the notice.  We recommend that anyone considering serving a blight notice should seek independent legal advice, noting that any legal advice sought will be at the property owner’s cost.

    More information

    For more information, please refer to the FAQs section below which includes a brief summary of how the blight notice procedure operates, who may be eligible and what they are likely to receive.

    The Secretary of State for Transport has also produced information on the Airports NPS and on statutory blight which can be found here.

    Legal Advice

    The law around compensation and statutory blight is complex.  If you think you may be affected by the Airports NPS and you are considering submitting a Blight Notice, you are strongly advised to take professional advice from a suitably qualified lawyer or an experienced and qualified Chartered Surveyor.

    The Royal Institution of Chartered Surveyors (RICS) operates a contact centre which can refer you to a firm in your area that is willing to provide 30 minutes’ free advice on your circumstances. The RICS Consumer Helpline number is 0247 686 8555.

     

    Who meets the cost of statutory blight?

    The Secretary of State for Transport is the appropriate authority with legal responsibility for any statutory blight arising from the designation of the Airports NPS.  This applies to blight notices served after 26 June 2018. Heathrow has agreed with the Secretary of State for Transport that it will meet the costs of successful statutory blight claims

    How do I serve a Blight Notice?

    Property owners who have been unable to sell their property except at a substantially reduced price as a result of the Airports NPS should complete the relevant blight notice form.These have been produced in the form prescribed under the Town and Country Planning General Regulations 1992 (as amended). A copy of the form can be requested from the contact details below.

    Where do I serve a Blight Notice?

    Heathrow has agreed to administer and take responsibility on behalf of the Secretary of State for Transport for blight notice applications made as a result of the Airports NPS and meet any successful claims.  A copy of your completed blight notice should be sent to:

    Gavin Wilson
    Head of Property
    Heathrow Airport Limited,
    The Compass Centre,
    Nelson Road, Hounslow
    Middlesex, TW6 2GW
    Heathrow Airport Limited
    Gavin.wilson@heathrow.com

    Any queries about blight notices should be sent to Gavin Wilson, Head of Property, who can be contacted at the above address, or by email to communityrelations@heathrow.com or can also be contacted by phone on 0800 307 7996.

    However, should you prefer you can send a copy of your completed blight notice to the Secretary of State for Transport, care of:

    David Silk
    Director for Airports, Infrastructure and Commercial Interventions
    Department for Transport
    Great Minster House
    33 Horseferry Road
    London
    SW1P 4DR

    Any queries relating to blight notices should be directed to Blight.enquiries@dft.gov.uk

     

    Frequently Asked Questions - Statutory Blight

    Blight is a term applied to properties where their normal market value is reduced because of specific development proposals, which potentially include the need to acquire that property.

    Schedule 12 of the Town and Country Planning Act 1990 sets out examples of the types of proposed development which would trigger blight to land.  Where a property falls within the boundary of these proposed development activities and there may be a need to acquire the land compulsorily, the property in question may become impacted by what is known as “statutory blight.”  Statutory blight applies in particular circumstances specified by law, but can apply to certain homeowners, small businesses and agricultural units, who have a “qualifying interest”.  This is described in greater detail below.

    Designation of the Airports National Policy Statement (Airports NPS) on 26 June 2018 triggered a potential for statutory blight to apply in relation to land falling within the red line shown on the plan found at Annex A of the Airports NPS. This is because this land is considered suitable or potentially suitable for airport expansion development proposed in accordance with the terms of the Airports NPS.

    Where certain property owners are unable to sell their property at the market value due to the property being identified as being within the area identified in the Airports NPS, the land may be treated as being blighted and the owner may be able to require the acquiring authority (which in the case of the Airports NPS is the Secretary of State for Transport) to purchase their land.

    A property owner whose land is blighted as a result of the Airports NPS may serve a notice (known as a “blight notice”) on the Secretary of State for Transport, requiring the purchase of their blighted property, subject to meeting the necessary statutory requirements. The Secretary of State can decide whether to accept a blight notice or to reject it if certain grounds apply. The detailed requirements and conditions relating to the service of blight notices and how they must be dealt with by the Secretary of State are set out in Chapter II of Part VI of the Town and Country Planning Act 1990 and in Schedule 13 of that act.

    The Secretary of State for Transport is the official acquiring authority for land which is statutorily blighted as a consequence of the designation of the Airports NPS.  Heathrow has entered into an agreement with the Department of Transport so that Heathrow will be responsible for the management of blight notices resulting from the Airports NPS on the Secretary of State’s behalf, and for the purchase of properties where a valid blight notice is accepted.

    Statutory Blight was triggered following the decision by the Secretary of State on 26 June 2018 to designate the Airports NPS for a new North-West Runway at Heathrow.

    Properties falling within the red line shown on the plan found at Annex A of the Airports NPS will be capable of being affected by statutory blight, subject to meeting statutory criteria. A copy of the Annex A plan can be found here. Property owners within this area can ask for the purchase of  their property by serving a valid blight notice to either Heathrow or the Department of Transport.  For details of how to do this, click here.

    To serve a blight notice a person must have a ‘qualifying interest’ in the land.

    This includes freehold owners of residential property as well as leasehold owners, provided that the lease has at least three years remaining of its term.

    More specifically, the following interests are eligible to serve a blight notice:

    • a residential owner occupier;
    • an owner occupier of a business premises with a rateable value not exceeding £44,200 per annum
    • an owner occupier of an agricultural unit or part of an agricultural unit;
    • a mortgage lender who has a right to sell the property and who can secure immediate possession; or
    • a personal representative of a deceased person who, as at the date of their death, would have been eligible to serve a blight notice.

    Residential property owners must also have resided in the property for at least six months or, if the property is empty, have lived there for at least six months prior to it being empty (provided that it has not been empty for more than 12 months).

    Before an eligible property owner is able to serve a blight notice, they must have made reasonable efforts to sell their property at its unaffected market value, but have been unable to sell that property except at a substantially reduced price. When serving a blight notice you will need to enclose marketing evidence such as copies of the advertisements and details of any offers which have been received.

    When a property is purchased after a blight notice has been accepted, compensation is payable in accordance with the statutory compensation code.  This is on the basis that it is deemed to have been compulsorily acquired by the acquiring authority.  Typically, compensation may include the following items (but you should seek independent professional advice on the details of potential compensation payable as part of the purchase of your property):

    • the unaffected market value of the property; plus
    • a property loss payment as set out in legislation, which is currently 10% of the market value capped at £64,000 for residential property, or 10% capped at £100,000 for business and agricultural properties or 7.5% of the unaffected market value for properties operated by private landlords, subject to a cap of £75,000; plus
    • stamp duty costs associated with the purchase of an equivalent value property; plus
    • reimbursement of reasonable legal fees and removal or other disturbance costs.

    Heathrow and the Secretary of State for Transport will review all blight notices which they receive to determine whether they are valid, and in some circumstances can issue a counter notice objecting to the validity of that blight notice.  The counter notice must be served within two months of receiving a blight notice. A counter notice can be served in the following circumstances:

    • that the land in question is not blighted land;
    • that it is not intended to acquire the land or (in the case of an agricultural unit) part of the land;
    • that only part of the relevant land is required, not all of it;
    • that the person serving the blight notice is not entitled to an interest in the relevant land;
    • that the persons serving the blight notice does not have a qualifying interest; or
    • that insufficient efforts to sell the land have been made.