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Heathrow Third Runway: Could you be entitled to serve a blight notice?

View profile for Brendon Lee
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Whether you support or oppose a third runway for Heathrow Airport, the Government appears committed to continuing with the legal processes for its final approval and implementation. An important recent step for landowners is the Government’s adoption at the end of June of its Airports National Policy Statement (ANPS)

The ANPS is important as it identifies the properties affected by the proposed third runway and safeguards them from alternative planning permissions for development. For landowners, this designation can cause severe impact, not only on the development potential of their property but also their ability to resell. Such impact is known as ‘blight’ and the ANPS has triggered both statutory and non-statutory legal rights of owners to serve notice for Heathrow Airport Limited (on behalf of the Government) to purchase the property.  

Currently there are three options for which landowners may qualify where their land is affected by blight. These are:

Statutory Blight

Under the Town and Country Planning Act 1990, there is a legal right to issue a statutory blight notice where certain eligibility criteria is satisfied. Namely:

  • your property must be within the redline boundary known as the Compulsory Purchase Zone (CPZ) and shown in Annex A of the NPS(PDF, 8MB);
  • you must own the property, either as:
    • a residential owner who has occupied the property for at least six months
    • an owner occupier of a business premises with a rateable value not exceeding £44,200 per annum
    • an owner occupier of an agricultural unit or part of an agricultural unit
    • a mortgage lender who has a right to sell the property and who can secure immediate possession
    • a personal representative of a deceased person who, as at the date of their death, would have been eligible to serve a blight notice; and
  • you must have made reasonable efforts to sell the property at its unaffected market value.

If you satisfy the above, then the property may have to be purchased at fair market value by the Secretary of State (including any development value). The owners could also be entitled to a home-loss payment of 10% (capped at £61,000 for residential properties and £100,000 for commercial properties) and payment of their legal and surveyor costs in negotiating the claim. Additionally, you could be entitled to payment of any stamp duty, legal and conveyancing fees, and reasonable moving costs to a new home.

Interim Property Hardship Scheme

A non-statutory Interim Property Hardship Scheme has been put in place for residents and business owners who have a ‘compelling need to sell’ but find the value of their property has significantly depreciated. The eligibility qualifying criteria is substantially similar to statutory blight noted above. However, unlike statutory blight, you will also need to demonstrate that:

  • any offers received during the marketing of the property were not specifically within 15% of its unaffected open market value;
  • you purchased your property prior to 17 December 2013 (or had no prior knowledge of the Heathrow expansion proposals at the time of purchase if after this date); and
  • demonstrate a particular hardship reason necessitating the sale. Examples include: medical; employment; family; financial; and the winding up of an estate.

The benefits of this Scheme, compared to statutory blight, is that if your property is within the CPZ then you will receive a 25% (uncapped but excluding any development value) home loss payment as compared to statutory blight’s 10% (capped as above but including any development value)) together with the rest of the paid expenses. Further, if your property is outside the CPZ but within the defined Wider Property Offer Zone (WPOZ) then the Scheme provides that Heathrow Airport Limited will purchase it at the unaffected market value but without any of the above premiums.

Property Bond Scheme

Later in 2018, Heathrow Airport Limited will be inviting owner-occupiers of residential properties within the CPZ and WPOZ and qualifying small businesses within the CPZ (only) to sign up to their property bond scheme.  This scheme commits the purchase of their property under an enhanced compensation offer of a home loss payment of 25% of the unaffected open market value of the property (excluding development value). The purchase would only proceed following the grant of the development consent for Heathrow Expansion and confirmation that Heathrow is proceeding with the project. 

Whilst details have yet to be published, it is unlikely you will need to demonstrate hardship or reasonable efforts to sell the property to be eligible under this Scheme but the purchase would be subject to Heathrow’s prescribed timescales.