House Rules: property law and HS2

1. England’s High Speed Rail

What’s new on HS2? On November 25, the UK government introduced the High Speed Rail (London-West Midlands) Bill into the House of Commons, accompanied by an environmental impact assessment, running to nearly 50,000 pages. The government wants to get the Bill passed into law before the May 2015 UK general election but time is short.

Does the Bill cover the whole of the proposed route? No, just the first stage of the line, from London to Birmingham. Plans to extend the line at a later date to Leeds and Manchester are not included.

I’ve heard it described as a ‘hybrid Bill’. What does that mean? It means that the Bill directly affects private as well as public interests. As well as dealing with the construction and operation of the railway, it seeks to authorise the compulsory purchase of all the necessary land and sets out how compensation to landowners will be calculated. Many land owners, individuals, businesses and organisations will be directly affected.

Is HS2 a done deal? Not until it has been through a long process in Parliament, including an initial period to comment on the environmental impact assessment, debates in the Commons and the Lords, and scrutiny by a select committee.

If I am affected, can I still change the proposals? Possibly. Check the Bill and its accompanying plans to make sure that you understand its implications, particularly as the latest version contains many changes from the previously published proposals and contains more detail. The environmental statement will be key to the government’s decision, so do raise any concerns you have about its accuracy in relation to your area. Comments on this must be in by January 24 2014.

What then? If you are directly affected, you may consider lodging a formal petition. You could influence the eventual form of the Bill, either by achieving amendments or getting undertakings from the Government about how the plans will be implemented in practice. The Select Committee will hold hearings, which could go on for months, at which petitioners can appear and make their case. Petitioners can’t question the main proposals, so they must concentrate on detail, like specifics of the route, construction details, exactly how much land will be taken, proposals to reduce the impact of the line on their properties and how the compensation regime will work. This process was followed with previous hybrid Bills, the most recent being the 2004 Crossrail Bill and 1994 Channel Tunnel Rail Link Bill.

It sounds a bit daunting. Parliament’s procedures for authorising major projects can appear forbidding to the outside world, but recently published guidance explains the process.

How will the compensation work? The government is consulting on revised compensation proposals for those affected by the project, after the High Court threw out its previous compensation scheme. The proposals include “express purchase” for those on the route and a long term hardship scheme for those who have strong personal reasons to move but cannot sell their homes because of the HS2 project. The government is also consulting on a possible “property bonds” scheme (a guarantee that the government would act as the buyer of last resort) and a voluntary purchase scheme for owner-occupiers within 120 metres of the route.

So there is still a lot to play for? Absolutely. There is some legal uncertainty, because of an ongoing judicial review of the HS2 programme by a number of parties. The Supreme Court is still to issue its ruling, following a hearing in October. Aside from that, political uncertainties in relation to HS2 will inevitably come into sharper focus as the Bill proceeds through Parliament and we get closer to the 2015 general election.

2. Renting in Brussels

Brussels is getting pretty trendy. What do I need to know about renting a place there? The residential letting market is booming in Brussels and is expected to gradually overtake the market for sales. But even though the city has a growing population and is home to the headquarters of the EU and Nato, rental prices are among the lowest in Europe. The average rent in Brussels is €649 per month, with 50 per cent of tenants paying less than €600, although there is a significant difference between rents in expensive areas like Uccle and more affordable ones like Saint-Josse-ten-Noode.

Will rents stay low? Historically, there has been less demand for rental property in Belgium than in other European capital cities but things are changing. Rents have increased by 8 per cent since 2008, faster than the Belgian “cost of living” index. 

Who is renting in Brussels? More than 40 per cent of demand comes from single people, who are typically spending 40 per cent of their household budget on rent.

What kind of place can I expect to get? More than 90 per cent of rental properties are apartments. Only 5 per cent are family houses and 3 per cent are “kots”, or studio rentals for students. Most are unfurnished. The Brussels Housing Code imposes strict rules on landlords about the safety and comfort of the housing they put on the market. As a result, landlords are making significant investment and rent is going up.

Can I get a six-month tenancy, like I can in England? That would be unusual. A “short” lease in Brussels would normally be three years, although you could agree a shorter term. Nine-year leases are standard. If you take a nine-year lease, you can still terminate the contract early but if you did that during the first three years, you would have to pay several months’ rent as compensation to the landlord. If you want to be able to end a “short” lease early, you will need to agree it with the landlord and get it written into the tenancy agreement.

So people can really settle in rented properties? Yes. Longer leases give tenants more security. UK Communities Secretary Eric Pickles recently suggested something similar as part of a drive to expand the UK residential letting market. 

What if I want to stay on? You could ask to renew your tenancy, although if you had a long lease, the landlord could refuse if it gave at least six months’ notice before the end date. For a short lease, the notice period is three months.

Simon Ricketts, joint head of UK real estate, and Olivier Armand, solicitor in the Brussels office, at King & Wood Mallesons SJ Berwin