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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 relevant acquiring 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 calculated by reference to the property’s existing/current use, being:
    • 10% of the unaffected market value for homes (including farmhouses) subject to a cap of £61,000; or
    • 10% unaffected market value for commercial properties, subject to a cap of £100,000; 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 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 acquiring authority with legal responsibility for any statutory blight caused by 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, available via the Documents section of this website. These have been produced in the form prescribed under the Town and Country Planning General Regulations 1992 (as amended).

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 Heathrow at the following address:

Jonathan Deegan

Head of Land Acquisition and Compensation

Heathrow Airport Limited

The Compass Centre

Nelson Road

Hounslow, Middlesex TW6 2GW

Any queries about blight notices should be sent to Jonathan Deegan, Head of Land Acquisition and Compensation at Heathrow, 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.

Should you prefer to deal directly with the Secretary of State for Transport, you can send a copy of your completed blight notice to:

Caroline Low

Director of Airport Expansion

Department for Transport

Great Minster House

33 Horseferry Road

London

SW1P 4DR

Further queries about Blight Notices can also be sent to the Secretary of State for Transport using the details above or to blight.queries@dft.gov.uk.

Heathrow’s discretionary property compensation schemes

Heathrow has developed a number of discretionary property compensation schemes for which owners or occupiers of affected properties within the Airports NPS Annex A red line boundary may be eligible.

Heathrow consulted on these compensation schemes during its public consultation from 17 January to 28 March 2018.  Heathrow is currently in the process of reviewing the feedback received during consultation, and the draft schemes may be subject to further changes. The compensation schemes as they currently stand are summarised below.

Interim Property Hardship Scheme

Heathrow has established an Interim Property Hardship Scheme which aims to assist property owners who have a ‘compelling need’ to sell their property but have been unable to do so, except at a substantially reduced price, because of the proposals to expand Heathrow, and who, because of this, are facing significant financial hardship.

What would eligible property owners be entitled under the Hardship scheme? 

Under the Interim Property Hardship Scheme, property owners who can demonstrate that they meet certain eligibility criteria will be able to have their property purchased by Heathrow.

Where your property falls within the Airports NPS Annex A red line boundary and you meet the Hardship criteria, Heathrow will pay:

  • the unaffected open market value for the property (excluding development value); plus
  • a home loss payment of 25% of the unaffected open market value of the property (excluding development value); plus
  • an amount equal to the stamp duty land tax payable on the purchase of a replacement home of equivalent market value to your property (not including the home loss payment); plus
  • the owner’s reasonable legal fees and disturbance costs.

Where your property falls outside the Airports NPS Annex A red line boundary, and you meet the Hardship eligibility criteria, Heathrow will purchase your property at its unaffected open market value only.

The Interim Property Hardship Scheme was launched in April 2017 and is currently open for applications. Further information about the scheme, including eligibility criteria, levels of compensation available and how to apply is available on our Property Compensation page.

Enhanced Compensation Offer – Property Bond scheme

Heathrow has also developed an enhanced compensation offer for eligible owner-occupiers of residential, agricultural, or small business premises in the Compulsory Purchase Zone (CPZ) (and also residential properties in the Wider Property Offer Zone (WPOZ)).  Details of these zones are set out in our Property Policies Information Paper and our property policy documents.  These draft property policies are subject to feedback from Heathrow’s recent public consultation. Whilst you cannot sell your property yet to Heathrow under these schemes, the intention is that Heathrow would commit in advance to the purchase of your property which would then take place when planning approval for a third runway is achieved and Heathrow confirms its intention to start construction (currently expected to be in 2021).  Heathrow expects to be inviting owner occupiers of residential properties (in the CPZ and WPOZ) and qualifying small businesses (in the CPZ) to sign up to our new property bond scheme, which will secure their eligibility for this enhanced compensation offer.

What would eligible property owners be entitled to through signing up to the Bond scheme? 

The enhanced compensation offer is:

  • the unaffected open market value of the property (excluding development value); plus
  • an additional home loss payment of 25% of the unaffected open market value of the property (excluding development value); plus
  • stamp duty (where residential) or other costs (where non-residential) associated with the purchase of an equivalent value property; plus
  • reimbursement of reasonable legal fees, moving costs and other disturbance costs.

For agricultural properties, the loss payment would be calculated at 25% of the unaffected open market value of the farmhouse (excluding development value and uncapped), and 10% of the open market value of the land (excluding the farmhouse and development value) capped at £100,000.

This is a summary and you can find more information on the offer and eligibility in our property policies which were published as part of Heathrow’s consultation and represent Heathrow’s current proposals, subject to any changes required as a result of feedback from the consultation:

Please visit our Compensation Schemes page for more information.

Frequently Asked Questions - Statutory Blight

What is meant by blighted land?

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.

What is the effect of blight?

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.

What can a property owner do if statutory blight applies because of the Airports NPS?

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.

Who will buy my property if my blight notice is accepted?

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.

When can a blight notice be submitted?

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.

Where does Statutory Blight apply?

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.

Who is eligible to serve a blight notice?

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).

Do I need to have attempted to sell my property?

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.

How do I serve a Blight Notice?

Blight notices can be made by completing the relevant form which can be found here [link]. The completed form should be sent to Heathrow (acting on behalf of the Secretary of State) by post to the following address:

Jonathan Deegan

Head of Land Acquisition and Compensation

Heathrow Airport Limited

The Compass Centre, Nelson Road,

Hounslow, Middlesex TW6 2GW

 

Alternatively, should you wish to direct your blight notice to the Secretary of State for Transport, you will need to send the blight notice to:

Caroline Low

Director of Airport Expansion

Department for Transport

Great Minster House

33 Horseferry Road

London

SW1P 4DR

If you require any assistance with completing the form we would encourage you to contact Heathrow Community Relations on 0800 307 7996 or by email to communityrelations@heathrow.com

What compensation do I receive if my property is purchased under a valid blight notice?

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 of 10% of the market value capped at £61,000 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.

When might a blight notice be declined?

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.

Where can I find further information?

The Ministry for Housing, Communities and Local Government publishes a series of explanatory booklets which include:

Booklet 1: Compulsory purchase procedure

Booklet 2: Compensation to business owners & Occupiers

Booklet 3: Compensation to agricultural owners and occupiers

Booklet 4: Compensation for residential owners and occupiers

These can be found via their website, here.

Additionally, we recommend that you seek independent, professional advice; more information can be found, and a directory of professionals can be sourced from the Royal Institute of Charted Surveyors or the Central Association of Agricultural Valuers:

 

Royal Institute of Charted Surveyors

Parliament Square

London

SW1P 3AD

RICS Consumer Helpline: 0247 686 8555

Email: contactrics@rics.org

 

Central Association of Agricultural Valuers

Harts Barn Farmhouse

Monmouth Road

Longhope

Gloucestershire GL17 0QD

Tel:  01452 831815

Email: enquire@caav.org.uk