Homes on axed HS2 leg that owners were forced to sell are rented for millions
HS2 is collecting almost £9m a year from renting out hundreds of homes that people were forced to sell in order to build the scrapped northern leg of the line, i can reveal.
Around £600m of taxpayer’s money was spent purchasing land and property for phases 2a and 2b of the high speed rail line connecting Birmingham to Manchester before it was axed by Rishi Sunak in October. The spur to Leeds was cancelled in 2021.
When he announced the northern leg of the line would be axed, the Prime Minister cited spiralling costs that meant HS2 no longer made economic sense.
Following the announcement, the Government suggested it would start the process of selling off land and properties for phase 2a “within weeks”, but is facing resistance from rail industry and local councils who could launch a judicial review.
Now, figures obtained by i via Freedom of Information requests reveal the full scale of the HS2 property empire across the North and East Midlands which will have to be dismantled if Mr Sunak’s decision is to be implemented.
At least 710 properties bought for phase 2 have been put back into the rental market in places such as Staffordshire, Cheshire and Derbyshire, making HS2 a collective £8.9m a year.
Those who were forced to sell their homes for the now-axed leg after being issued with compulsory purchase orders by the company have described the news as farcical, with one saying residents are “absolutely outraged”.
HS2 Ltd’s property empire
Total number of properties being rented out: 1,206
Phase 1: 496 Phase 2a: 129 Phase 2b: 581
Total annual income from rental properties: £22m (2022-23)
Phase 1: £13m Phase 2a: £1.8m Phase 2b: £7.1m
Highest rental income from single property: £186,813 per month
Number of properties costing £5,000 or above per month: 27
Number of properties costing £1,000-£5,000 a month: 623
Number of properties costing £1,000 or less: 556
The HS2 rail line was originally due to pass through some of the most expensive postcodes in the English countryside, leaving HS2 Ltd the landlords of a string of high-value properties, some of which have been left crumbling and unoccupied.
Stanthorne Grange on the outskirts of Middlewich, Cheshire – believed to have inspired Charles Dickens’ Great Expectations – now sits decaying and forlorn, having been left unloved since it was bought for £637,500 by the Department for Transport in 2015.
The majority of properties acquired, though, are being rented back out by HS2, with more than half costing between £1,000 to £5,000 a month.
The highest rental income from a single property is £186,813 a month – around £2.2m a year – which i understands relates to a commercial building rather than a home.
The total revenue being raised through renting out properties by HS2 is £22m, of which almost £9m relates to the phase 2 line which has been cancelled.
In Northwich, Cheshire, HS2 bought the comedian John Bishop’s home for £6.8m under the “need to sell” scheme because the route was supposed to come within 150 metres of his property.
i understands the Grade II listed Georgian mansion which comes with 28 acres of land has since been rented out by HS2 for as much as £10,000 a month.
Mr Bishop made a £4.5m profit on the deal but said at the time he felt he had “no choice” to sell and remained opposed to the rail project. The comedian did not respond to a request for further comment.
In nearby Middlewich, HS2 bought up Stanthorne Park Mews, a former dairy house and cluster of ten barn conversions.
i understands the former owners, a farming family, invested a considerable sum in converting the barns with the intention of selling them on before it became clear they would be severely blighted by the HS2 rail line.
The family had little choice but to sell the entire portfolio to HS2 Ltd which is now renting them out.
An advert for one of the three-bedroom properties was added to the advertising platform RightMove this month at a price of £1,200 a month.
Mike Slater, who sold his home in the village of Wimboldsley, Cheshire, after years of campaigning against HS2, told i the number of properties sold there has had a profound effect on the community.
“I think [HS2] have seriously blown the budget on buying up properties and they had to do something to show they were being diligent, that’s why they’ve rented them out,” he said.
“Many of them are empty. With the ones that are rented, you see it with things like attendance at village meetings, use of the facilities, things like that.
“In terms of the community, everybody who’s moved in knew phase 2 was coming so they knew they weren’t going to stay.
“It’s had a major impact on Wimboldsley.”
In Whitmore, Staffordshire, as many as 50 properties were bought by HS2, with the few residents who are left complaining it has been turned into a “ghost village”.
Deborah Mallender, 63, told i residents there are “absolutely outraged” at the scale of the takeover which now looks to have been for nothing.
“It was a land grab,” she said. “Where is all that rental money going? And is it all accounted for?
“There has not been enough transparency around HS2.
“They should be putting the houses up back up for sale now [that the northern leg has been cancelled].
“It would be a good idea to put the money back into the community.”
Critics say a so-called firesale of properties bought for phase 2 will see the taxpayer lose out and will prevent a future government from resurrecting the project.
Campaigners the High Speed Rail Group believe a “hasty” sale of HS2 lands could cost the taxpayer as much as £100m on the section from Birmingham to Crewe alone.
“Smart countries keep their options open for the future,” a spokesperson said.
“We urge the Government to proceed with caution on land sales, only selling any land after a full consideration and consultation on possible alternatives to phase 2a and understanding of how to achieve best value for the taxpayer.”
Professor Juergen Maier, vice-chair of lobby group the Northern Powerhouse Partnership, suggested that in a worst-case scenario a future government might have to buy back land and property for a second time if it is sold now.
“It would be the worst of all worlds… given that the sector still needs time to work out how it’s possible to get HS2 trains up the West Coast Main Line to Manchester,” he told i.
“Achieving this would add substantially to the cost and no money has been set aside in the Network North settlement.
“We owe it to residents and investors to delay just a few months longer to make the right decision for the long-term.”
HS2 Ltd has long stated that it will let out residential and agricultural properties where possible and i understands this currently accounts for 79 per cent of its portfolio.
It is understood the safeguarding of properties and land no longer needed for phase 2a – from Birmingham to Crewe – will be formally lifted within weeks.
The process will take longer for phase 2b – from Crewe to Manchester – to allow for the requirements of Northern Powerhouse Rail, the project to improve east to west rail connections in the North of England.
It is understood the Department for Transport is developing plans for selling land acquired for phase 2 which will deliver “value for money” to the taxpayer but does not disrupt local property markets.
A spokesperson for HS2 Ltd told i: “We recognise that people did not choose to live in the path of a high speed railway, and understand the frustration they may now feel following the cancellation of the northern sections of HS2.
“At all times we endeavour to be understanding and to provide appropriate support and guidance.
“Where it is financially advantageous for the taxpayer, we always strive to lease properties on the open market, and HS2 Ltd’s agents apply industry standard checks to all prospective tenants.
“Some properties require maintenance to meet current regulations before being let, and any vacant properties are maintained and kept secure with the interests of local residents in mind.”
A spokesperson for the Department for Transport told i: “Every single penny brought in by rental income is put back into the project helping to provide value for money for the taxpayer by offsetting the cost of managing these properties.
“We have set out our intention to begin lifting safeguarding no longer needed shortly and we will ensure our approach to selling land provides value for the taxpayer, while acting decisively to bear down on the costs of HS2 more widely.”
