Compulsory purchase and compensation update – 2016

Date04 July 2016
Published date04 July 2016
DOIhttps://doi.org/10.1108/JPIF-04-2016-0023
Pages421-427
AuthorGary Sams
Subject MatterProperty management & built environment,Real estate & property,Property valuation & finance
Compulsory purchase and
compensation update 2016
Gary Sams
Reading University, Preston, UK
Abstract
Purpose The purpose of this paper is to summarise and analyse reforms to the compulsory
purchase compensation code which have been published for consultation by the Department for
Communities and Local Government.
Design/methodology/approach To explaineach of the proposals and provide a criticalassessment
of each of them.
Findings The proposed changes comprise a further small step towards the comprehensive reform of
the compensation code which is required.
Practical implications The proposed reforms are to be welcomed but there are a number of areas
in which they need refinement following the consultation process.
Originality/value As the proposed reforms were published only in March 2016 there will be few
other commentaries available.
Keywords Compensation, Reform, Compulsory purchase, No-scheme world, Loss payments,
Planning assumptions
Paper type Technical paper
Introduction
After many years of complaints about the unfairness of the compensation code, and the
seeming disinterest of the government in doing anything about it, the government finally
seems to be getting its act in place and we are seeing a flood of reforms. The first batch of
these was hidden away in the Localism Act 2011 and in 2014 we saw another set of
amendments particularly targeted at HS2. There were then the mainly procedural changes
still going through parliament in the Housing and Planning Bill. Most recently in March
2016, the Department for Communities and Local Government (DCLG) commenced
consultation on a further round of reforms, this time including changes to the way
compensation is assessed as well as a couple of further technical amendments. The
reforms still fall well short of the comprehensive re-writing of the compensation code
which is almost universally accepted as being required, but the government brings out its
usual excuse that a full scale consolidation would take considerable time and need
significant resources to complete. Given the pressing need to ensure that compulsory
purchase can more effectively support the delivery of the governmentshousing,
regeneration and infrastructure objectives, we propose to take forward these reforms.
In this paper I will outline these proposed reforms and provide s ome commentary.
Market value in a no-scheme world
In assessing compensation for compulsory purchase it is essential to leave out any
impact on value, positive or negative, of the scheme. If the scheme is a sewage works,
the negative effect of the nature of the scheme must not be allowed to influence
compensation for properties acquired. If the scheme is a by-pass, the positive effect on
agricultural land which suddenly becomes ripe for development should also be left out
of account. The theory is simple but putting it into practice is much more difficult.
Should the valuer ignore the scheme by assuming it has never been thought of and
Journal of Property Investment &
Finance
Vol. 34 No. 4, 2016
pp. 421-427
©Emerald Group Publis hing Limited
1463-578X
DOI 10.1108/JPIF-04-2016-0023
Received 9 April 2016
Accepted 10 April 2016
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1463-578X.htm
421
Purchase and
compensation
update 2016

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