Home Loss Payments Increase

2 December, 2015
by: Cripps Pemberton Greenish

As readers may already be aware, the levels of compensation available to qualifying homeowners and occupiers displaced through compulsory purchase have been increased under the latest statutory instrument to be published on the matter.

 

The Home Loss Payments (Prescribed Amounts) (England) Regulations 2015 (“the Regulations”) have increased the amounts payable under section 30 of the Land Compensation Act 1973 (“the Act”). The Regulations apply when a person’s home is acquired by compulsory purchase on or after 1 October 2015.

 

By way of background, section 30(1) of the Act provides that, in cases where a person occupying a dwelling on the date of displacement has an ‘owner’s interest’ (i.e. a freehold interest or a lease with more than 3 years left to run), that person is entitled to a home loss payment if the dwelling is compulsorily purchased by a qualifying authority. This is calculated as 10% of the market value of the interest, subject to a maximum and minimum amount. Section 30(2) specifies the amount of the home loss payment where no ‘owner’s interest’ is held.

 

The Regulations increase the maximum amount payable to affected homeowners/occupiers under section 30(1) of the Act from £49,000 to £53,000, and regulation 2(2)(b) increases the minimum amount from £4,900 to £5,300. The compensation available under section 30(2) of the Act has also increased from £4,900 to £5,300.

 

A person is entitled to home loss payments when they are displaced from a dwelling by compulsory purchase or in the other circumstances specified in section 29 of the Act. ‘Other circumstances’ include the situation where a landlord negotiates with individual tenants outside of the compulsory purchase regime to pay an uplift on the market value of the property in full and final settlement of any claims that the tenant may have to compensation.

 

Cripps Pemberton Greenish has experience in dealing with both the formal mechanism of compulsory purchase and also advising ‘in the spirit’ of the regime in both the ‘other circumstances’ and where the mechanism is used as a framework for a voluntary sale pre-planning.