Publication Date: June 2019
Heathrow Consult on expansion Masterplan
On June 18th 2019, Heathrow revealed its’ Masterplan for the construction of a third runway.
Major consultation on proposals like these are not unusual. In fact, there was major consultation undertaken from January – March 2018, the results of which will have fed into the current proposals.
The Masterplan consultation which will run until 13th September 2019 is however stepping up the consultation to a much greater degree. It’s a statutory consultation, the results of which will feed into the Development Consent Order.
What is the Development Consent Order?
This is the consent that Heathrow will seek from government to cover both Planning and Compulsory Purchase.
Compulsory Purchase powers will be required because the number of properties that need to be demolished for the scheme to proceed, is so large that it is highly unlikely that everyone will agree terms voluntarily. Without Compulsory Purchase powers, it is possible that a small number of people, possibly even one person, could hold up the proposals.
So what are Heathrow doing to convince me to sell?
In fairness to them, for most people, quite a lot. For owners within the Compulsory Purchase Zone (CPZ), most people will be entitled to enter a bond scheme which could see them sell at –
Market Value, ignoring the affects of the plans for the third runway + 25% + disturbance compensation to cover costs of moving.
In addition, there are approximately an additional 3750 residential properties in the Wider Property Offer Zone (WPOZ) who may also sell on this enhanced package.
There will be some people who don’t qualify for this enhanced package. Landlords won’t qualify unless they bought off someone who did qualify after 17th December 2013.
The devil is in the detail on who qualifies so it’s best to pick up the phone and discuss your circumstances if you’re not sure.
It’s clearly not practical for Heathrow to undertake thousands of negotiations all at once so they are proposing a bond scheme.
What is the bond scheme?
Effectively, it is an option agreement in favour of the seller. Once the price and compensation are determined, the homeowner will have the choice whether or not to enter the bond.
If they do enter the bond, it would become effective once Heathrow have been granted powers under the Development Consent Order and assuming they still decide to proceed with the scheme.
A homeowner choosing to exercise their rights under the bond scheme will then be able to compel Heathrow to buy their property on the enhanced package. Some homeowners will also be able to enter into the bond scheme on the basis of Statutory compensation, rather than the enhanced package.
Whatever the agreed price is will be linked to a Land Registry Index that shows fluctuations in the Market. For example, if the market increases or falls by 5% between the bond scheme valuation and someone selling, the price they receive will also increase or fall by 5%.
How is the Market Value determined?
There will be two valuations undertaken, with the average being the Market Value. In the unlikely event that the valuations are at least 10% apart, a third valuation will be carried out.
Heathrow will choose at least one of the Chartered Surveyors who will provide a valuation. A homeowner can choose someone else from Heathrow’s appointed panel. Alternatively, a homeowner can choose their own Chartered Surveyor to provide an Independent opinion of Market Value.
Heathrow are unlikely to be instructing their Chartered Surveyors to undertake many inspections until towards the end of 2019. The sheer scale of this means that getting valuations done will prove difficult. That’s why we’re going to get a head start and begin our Valuation inspections over summer 2019. We’ll then be ready to provide valuation figures quickly when needed.
We expect and hope to represent hundreds if not thousands of homeowners. To ask us to provide your Independent Valuation, call us on 020 3011 5300.
Our consultation response
The proposals for how homeowners will be dealt with are good. However, the devil will be in the detail and we’d like to ensure that our homeowner clients are well represented.
For example, homeowners who take the bond scheme, as we expect most will, will want to know their exact budget at the point they make an offer to buy elsewhere. It is important therefore that there is the right for homeowners to stop their price moving between making an offer to buy elsewhere and the 2-3 months it would typically take for their purchase to go through.
Similarly, whilst it is helpful that stamp duty can be reclaimed up to a cap, it would be more helpful if this could be paid on the date of sale if it is needed the same day for a purchase to complete. Otherwise homeowners risk of having to find potentially £tens of thousands in the short term to then reclaim it afterwards.
In addition, where the bond scheme is taken, as much flexibility for when homeowners can sell the better.
We’ll be submitting our formal response with the above points and others prior to the consultation closing.
Why choose Sawyer Fielding?
For the Valuation report, you’d be getting a professional report in a timely manner from the most experienced Compulsory Purchase Chartered Surveyors in the country. As we expect to provide hundreds if not thousands of reports, the amount of time we will spend getting it right will ensure a high degree of accuracy.
We take a very different approach than most Chartered Surveyors. We will sit down with you and explain how everything works in plain English, providing simple easy to understand guides throughout the process.
With our reports, you’ll know how much you’re likely to receive both with a bond scheme and how much you’re likely to receive if you rely on Statutory compensation.
Subject to confirmation from Heathrow that they’ll pay for additional services, we will also be able to help out with more. This could involve helping you find somewhere to move to, supporting you in evicting your tenant, advising you through the legalistic Development Consent Order process or dealing with your disturbance compensation claim for additional compensation.
Call us on 020 3011 5300 or e-mail email@example.com for more information.