HS2: the flagship scheme with potentially voracious demands
It’s a flagship scheme beloved of the political glitterati in Westminster but together with its promise of trains that can carry 1,100 people at 250 mph, making them the fastest on the European rail network, HS2 also brings potentially voracious demands for land. In this article, we share our HS2 advice for landowners.
The first phase of the scheme is costing £24bn but some forecasts suggest this could rise to £56bn or even close to £100bn, which many predict will also make it the world’s most expensive rail construction scheme. Meanwhile, company chairman Sir Terry Morgan started December by predicting that he was about to be sacked because of potential cost over-runs like those at his Crossrail project in London, leaving the rail scheme without a driver. In the event, he resigned and the Government has now accepted Crossrail needs another £1.5-£2 billion bailout to be completed even later than the rescheduled Autumn 2019.
First stop for the High Speed rail network is Birmingham and whether or not it makes it past there via Phase 2b to deliver for the much-vaunted Northern Powerhouse only time will tell. Crossrail’s problems potentially throw that into doubt but in anticipation of Phase 2b achieving the desired results, we have to be ready for its arrival east of the Pennines, where it will re-join the existing mainline to the north just to south of Ulleskelf.
While there is speculation over the build cost and whether or not it will bring significant benefits – trains travelling at 250 mph by necessity will not be stopping very often to pick up passengers. It’s best to accept that it will eventually arrive, maybe not on time, and to plan for what it could do for your business and how it might have both beneficial and negative impacts. Landowners and farmers with diversifications into tourism enterprises, for instance, could find HS2 delivering more short-stay visitors to the area who will need accommodation. Meanwhile, other businesses may be encouraged to relocate headquarters or support staff away from Greater London, safe in the knowledge that they have ready fast access to the capital if and when essential.
The biggest negative impact is most likely to arrive through the scheme’s appetite for land, both permanently once the track is in place and also temporarily for site access and construction bases while it is still work in progress. Already at Hewetson and Johnson we have clients in the Wakefield area who are affected, some potentially missing out on taking advantage of tens of acres of development land. At present, the scheme is out to consultation and it is essential this is finished so the true impact can be assessed. It’s uncertain how much the finished scheme can be affected by joining in consultation, but what is certain is that nothing about HS2 should be ignored in the hope it will disappear. With such a prestigious political project at stake, there are few currently in Westminster who will want to be seen as the ones who abandoned a project of such national importance. With that in mind, if HS2 is likely to affect you then take a keen interest, mitigate its bad effects, and maximise what it can bring to you.
Our HS2 advice for landowners
Landowners and businesses should seek to maximise the value of assets now, as there is a good chance that this value will be realised. HS2 will be seeking to negotiate land acquisition rather than take the divisive compulsory purchase route, gaining as much of what they think they need as early as possible. It’s thought that acquisition will be completed by 2024 but do not expect to see any trains on the track until 2033 at the earliest. With the obvious caveat that such schemes always encounter snags, completion could in fact be far later so the advantages will be reaped by the next generation rather than this one.
It should also be borne in mind that change brought about by HS2 will be far wider than that which immediately affects you. Infrastructure such as roads, other parts of the rail network, and power supplies could alter regionally or at the very least several miles from your own location but nevertheless with the potential to have a significant impact on how you do business. Negotiating land deals is likely to have a far better outcome than forcing HS2 into CPO acquisition, if only because the relationship does not become acrimonious leading to entrenched positions on both sides. It’s essential that you engage with your land agent early to ensure both an in-depth study of the effects on your future operations and how this may need to be compensated as well as the actual value of land that will be sacrificed.
It’s also worth bearing in mind how future surplus land may be relinquished by HS2 and whether or not re- acquiring it for your farm would be beneficial. If so, explore the options during the negotiations now and where possible build them into any sale agreement.
If you are a landowner in need of advice on HS2, please contact us to speak to one of the team.