The election has come and gone: the promises by the Green Party (who pledged not to support HS2) and UKIP (who pledged to get rid of it altogether) ultimately failed to inspire the British electorate to remove those who have championed HS2 from the seat of power.
So HS2 will happen. But while the debate as to what benefits it will bring to the UK continues, what is clear is that it will damage the interests of owners and occupiers of commercial properties along the route, with little in the way of compensation in return.
Having been instructed by a number of commercial property owners and occupiers during the petitioning process of the Phase 1 Hybrid Bill, we have seen firsthand the impact HS2 has and will have on the commercial property industry.
The discretionary compensation scheme brought in by the government, designed to bring about early compensation for affected owners, largely only benefits residential owner-occupiers. Owner-occupiers of commercial properties can benefit, but only where the rateable value of their property does not exceed £34,799.
Non-owner-occupiers of commercial properties and landlords can - aside from in very limited circumstances - only rely on the blight notice procedure, and this does not apply to properties with a rateable value over £34,800. This means that hardly any compensation will be paid out respecting commercial property until after HS2 has been up and running for a year.
The HS2 Select Committee has yet to do anything to further the cause of the sector. In its interim report, published in March, the word “commercial” appears only once: the committee has made it very clear that its priority is residential.
The government and HS2 Ltd should look afresh at the discretionary compensation schemes and give proper consideration to the impact HS2 has and will have on commercial property. As regards Phase 2 (Birmingham - Manchester and Leeds), an early decision confirming the route would be welcome, as uncertainty helps neither commercial nor residential property owners/occupiers.
In the meantime, commercial property owners and occupiers - particularly landlords - are facing uncertainty and losses. We have already seen examples of tenants using the uncertainty to negotiate reduced rents. This has left landlords in the unenviable position of having to accept lower rents in order to avoid rental voids - often in circumstances where it has not even been confirmed that their properties will be affected by HS2.
David Haines (pictured) is a partner and Richard Flenley is a senior associate at Charles Russell Speechlys