Partner Article

Will HS2 affect your business?

Last week, Transport Secretary Patrick McLoughlin revealed preferred route plans for HS2 Phase 2 - the ‘Y’ routes north from Birmingham to Manchester and Leeds - with proposed stops at Sheffield Meadowhall, Toton, Crewe and Manchester Airport.

It is vitally important that affected businesses and investors keep up-to-date with the latest information and prepare for the impact the scheme will have on their strategic and financial planning over the next few years, according to BNP Paribas Real Estate, the leading property adviser.

The Hybrid Bill for Phase 1 is intended to be laid before Parliament in October 2013. The HS2 property team are already conducting early acquisition negotiations to secure key properties which stand in the way of the scheme. Phase 2 is sure to be implemented quickly, as lessons learned from Phase 1 will inform the process and set precedents for dealing with Phase 2 claimants. Therefore, those affected must start planning now.

It is crucial for those potentially affected to understand how to respond to the consultation and how to protect the value of their business. They may be entitled to compensation - but how much should you get and when?

The shadow period before a CPO brings blight and uncertainty, so damage limitation measures are needed at boardroom level, as business planning and investment decisions will be affected. However, solutions may not become clear until after consultation on blight and safeguarding has closed and the definitive plans are published.

General ‘blight’ has no statutory basis for claim, creating a widespread fear that the Government will not do enough to prevent blight and protect property values. Any business with a rateable value higher than £34,800 p.a. will be unable to serve a blight notice.

However, those occupiers whose businesses have to be relocated or are totally extinguished can claim the value as owner for non-property losses. Conditional contracts for acquisition are frequently negotiated in the shadow of a CPO.

Chris Selway, Director at BNP Paribas Real Estate, who has 34 years’ experience in the property industry specialising in CPO and the rail sector, commented: “HS2 Phase 2 is coming, so seek professional advice and check how you are affected. If you are affected, contact HS2 and respond to their consultations over the next 18 months.”

“It is crucial to formulate your strategy to protect your position – keep formal notes and monitor property values. Don’t stop repairs or redecoration and maintain your property’s value. I would also advise owners to keep detailed records of expenditure, losses or write downs,” concluded Selway.

This was posted in Bdaily's Members' News section by BNP Paribas Real Estate .