When the Government announced plans for the second part of its high-speed railway (HS2), homeowners up and down the land were checking the route to see how it may affect the value of their house.
Some are worried the value of their property may fall if they are too close to the planned route, others hope the value of their property will go up due to the improvement in infrastructure.
So, should you buy a house near HS2 in the hope the value rises? Or, should you avoid it in case HS2 causes house prices to drop?
Let’s take a look at how HS2 could, theoretically, impact property prices:
Negative Effects Of HS2 On Property Values
The main negative effect of HS2 on property prices is likely to be felt by those closest to the planned route.
Properties within 500m of the HS2 line are likely to have their values harmed, at least in the short term.
That’s mostly because of the disruption the building works will cause and the uncertainty of the effect on noise pollution and traffic levels in the local area.
However, it’s not all doom and gloom. During HS1, while property prices along the route dropped sharply as work began, they soon recovered once the work was complete.
Therefore, for most properties, any negative effect is likely to be temporary. That said, it will depend just how close to the new line you are. If your property literally backs on to the line, you may find the negative effect on the value of your house lasts way beyond the construction phase as many people will be put off being that close to the line.
Positive Effects Of HS2 On Property Values
Properties close enough to benefit from the HS2 line passing through stations close to them, without being so close that they will be disrupted by them, are likely to see their properties rise.
This is because of the extra jobs and accessibility the line will provide to local areas. A similar thing was seen from Crossrail in London where prices in areas within 1 mile of the route saw prices rise by 66% in just 8 years.
Admittedly the London property market is something of a unique case, and trends in the capital don’t always translate to other parts of the UK. However, you would expect that any area that benefits from an improvement in transport links is likely to see property prices rise.
Compulsory Purchase Orders & Compensation
If a property lies directly on the planned route of HS2, it may become subject to a CPO (Compulsory Purchase Order). This is where the owner has no choice but to sell the property to the acquiring authority (in this case HS2 Ltd).
If you are considering purchasing a property that may become subject to a CPO, keep in mind that you will only be given the highest price the property would be expected to fetch on the open market. A CPO will therefore not make you rich!
It may be, however, that you can also claim compensation in the form of a Home Loss Payment. The amounts claimable will vary depending on a variety of factors so we recommend seeking legal advice from a specialist solicitor.
Update (December 2018):
Along with accusations that HS2 is now running significantly over budget, the BBC’s Panorama programme is reporting that many people whose properties are subject to a CPO are complaining of “low valuations and delays in compensation”. You can read more on this story here.
So, Should You Buy A House Near HS2?
It’s clear that the impact of HS2 on property prices is still somewhat unknown. However, it’s likely that in the short term, properties closest to the planned route will be negatively affected. However, over the long-term houses near to the line (but not directly on it) are likely to see their property values increase.
That said, work on HS2 is not expected to be completed until 2033 and so there is a long way to go until the full picture will be known.
Ultimately, if you are asking whether you should buy a house near HS2, the answer is that it entirely depends on how close to the planned route the property is and how long you will hold on to the property for.
If the property is far enough from the line to avoid a negative effect, yet close enough to benefit from the line, buying property near HS2 now and holding on to it for the long-term could be very lucrative, but be sure to do your own research first!
We’d also recommend consulting with a chartered surveyor before going ahead with purchasing a property near the HS2 route. You can find a local chartered surveyor with our comparison tool, here.
If you do decide to buy a property near HS2, make sure you use a suitably qualified conveyancing solicitor to oversee the purchase. You can compare conveyancing solicitor quotes here.