HS2 causes house price confusion
Following the BBC report that a property in Buckinghamshire located 450 metres from the proposed track route was valued as £0 by The Woolwich and consequently refused a mortgage, the industry is calling for swift reassurance of the support government will offer those who live in close proximity to the train line.
Bernard Clarke, spokesman for the Council of Mortgage Lenders, said: “We need the publication of the government’s compensation plans to reassure local housing markets, homeowners and lenders so they can continue to function.”
There are two phases of the project under consultation: phase 1 which covers the London to Birmingham section of the track ended yesterday while phase 2, Birmingham to Manchester, will close on 29 April.
It was proposed that the government would buy any owner-occupied homes within 60 metres of the planned area offering those homeowners the unblighted value of their homes plus 10% up to the maximum of £47,000.
And a further 60 metres outside this zone, homeowners would be allowed to sell their properties to the government for the full unblighted value, which is the value before any detrimental effects.
But the range of this compensation zone has raised concerns among those who work in the mortgage industry as not being wide enough.
Eddie Goldsmith, senior partner at Goldsmith Williams, said: “The government’s automatic entitlement corridor of 120 metres affords insufficient protection to homeowners caught up in the HS2 route proposals.
“The response of The Woolwich to a recent mortgage application from a prospective purchaser of a property located some 450m off the route quoting a valuation of £0 shows up just how inadequate the government scheme is.”
A spokeswoman for The Woolwich said the value of £0 recorded by the surveyor was for its lending purposes and meant that the property did not meet its lending criteria.
But she confirmed that the comment “not applicable” would have been a better representation.
She said: “There has subsequently been an amendment to the report because the property clearly does have some value.”
The revised value is currently undisclosed because the resident has not been officially notified.
The Woolwich was unable to confirm if this was the first declined case because of HS2.
However the lender did confirm it is not automatically declining properties in this situation rather it depends on the individual circumstances of the property.
She added: “This specific case was not just declined because of HS2 there were other contributing factors such as the condition of the property.”
Martyn Stone, technical director of Countrywide Surveying Services, said: “The market will decide what the value of houses around the HS2 line will be.
“Valuers will look at each individual property on its own merits and it should be a reflection of what the market is doing.”
Stone said it would take time for the market to develop but Countrywide would be closely watching how the local markets react to the news.
He said: “We shall be keeping a very close eye on how we see things developing and providing as much guidance and support to our surveyors as possible to make sure we get our valuations correct in each of these circumstances.”
The Woolwich said, in anticipation of concerns that brokers may have about submitting cases to them, “it’s business as usual.”