§ Ms WalleyTo ask the Secretary of State for Transport what are the rules for assessing compensation for property compulsory purchased for road schemes; what allowance is made for negative equity; in how many cases in the last two years compulsory purchase orders have been made in respect of property which is subject to negative equity; and what advice is given to owners of such property by his Department.
§ Mr. Kenneth CarlisleThe long-standing principle of the statutory compensation code is that the owner of property subject to compulsory purchase is compensated on the basis of its current value on the open market, discounting any depreciation or enhancement attributable to the scheme for which the property is needed. Residential owner-occupiers normally qualify in addition for a home loss payment of 10 per cent. of market value, up to a maximum of £15,000.
I am aware of, and fully understand, the concern that in current housing market conditions there could be cases where compensation offered fell short of the mortgage debt. No such cases have arisen. However, where people fear they may be affected in this way in future as a consequence of forthcoming schemes, we are inviting them to write to us with full details of their situation. This will help me, my right hon. Friend and my hon. Friend the Minister for Housing and Planning, who has the main responsibility for the compensation code, to assess the position and consider what action might be needed.