Compulsory purchase: how much compensation is payable for the appropriation of land by public bodies?

Sharpe Pritchard

The Home Loss Payments (Prescribed Amounts) (England) Regulations 2015 (SI 2015/1514) came into force on 1 October 2015. These regulations increase the amount of compensation payable in England under the Land Compensation Act 1973 to a person whose home is acquired by compulsory purchase.

Compensation, by way of a ‘home loss payment’, is payable where a person is displaced from a dwelling by a compulsory purchase order (section 29, LCA 1973). The Land Compensation Act 1973 sets out two methods for calculating a home loss payment:

  • where a person occupies a dwelling under an ‘owner’s interest. For example, an interest in the freehold of the dwelling, or in a lease with more than three years left to run, the home loss payment will be 10 per cent of the market value of the interest but subject to both maximum and minimum limits (section 30(1), Land Compensation Act 1973); and
  • if the home loss payment does not fall within section 30(1) of the Land Compensation Act 1973, then the compensation payable will be the amount specified in section 30(2).

Under regulation 2(2) of the new Home Loss Payments (Prescribed Amounts) (England) Regulations 2015, in respect of any displacement occurring on or after 1 October 2015:

  • the maximum home loss payment under section 30(1) of the Land Compensation Act 1973 is increased from £49,000 to £53,000;
  • the minimum home loss payment under section 30(1) of the Land Compensation Act 1973 is increased from £4,900 to £5,300; and
  • the prescribed amount of home loss payment under section 30(2) of the Land Compensation Act 1973 is increased from £4,900 to £5,300.

The increases have been calculated by reference to the Office of National Statistics’ mix-adjusted house price index and reflect an increase in line with house price inflation.