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 it is 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.
It was certainly something that put us off when we were hunting for a new home in Nottingham. At the time, there was talk of a main HS2 hub being built in Toton (a village on the edge of Nottingham).
We looked at a property close to the proposed site and liked it, but in the end, we decided not to proceed with a second viewing due to the proximity of the proposed East Midlands Hub.
While the property didn’t immediately back on to it, it was close enough to have a potential impact on the traffic and noise levels in the area. It was enough to put us off and I’m sure others thought the same.
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.
To be fair, I have no doubt that the property we viewed near the proposed East Midlands Hub would have eventually rocketed in value had the hub been built. But of course, there would be lots of upheaval during the build which would have had a temporary negative effect.
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 HS2 solicitor.
Update (October 2023)
Prime Minister Rishi Sunak has announced that the HS2 high-speed rail link will not be built between Birmingham and Manchester. This follows the previous cancellation of the route between the East Midlands and Leeds. Mr Sunak said that £36bn funding will be diverted to other transport projects instead. Read more about the decision, and its implications, here.
Update (February 2020):
The current Conservative Government have now given the green light for HS2 to proceed, despite much controversy. The new expected completion date of phase 2 of the line is 2035-2040. You can read more on this story here.
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 2035-2040 and so there is a long way to go until the full picture will be known.
Our experience highlighted this for sure. We were put off buying a property due to the proposed location of the East Midlands Hub, only for the HS2 plans to change and the line no longer going anywhere near Nottingham, let alone the property we viewed!
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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.
