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What impact has the HS2 route had on Leeds?

  1. 29 March 2017
  2. By Rosie Rogers

We take a look at the impact of the highly divisive HS2 route on the property markets of northern cities, with a particular focus on Leeds.

High Speed 2 (more frequently known simply as HS2) has long been a thorny, divisive issue, with fervent supporters and detractors in equal measure.


 

In fact, ever since it was first suggested by the Labour government in 2009, it has barely been out of the headlines for one reason or another. Legal battles, delays, budget concerns and strong opposition from local residents, environmental groups, MPs and protestors have all dogged the progress of this nationwide piece of infrastructure.
 
Described variously as the world’s most advanced passenger railway and a ‘once-in-a-lifetime opportunity’, HS2 would link London with the major cities of the Midlands and the North, including Birmingham, Leeds, Manchester and Sheffield. It is seen as a key part of the government’s Northern Powerhouse agenda, bridging the north-south economic divide and bringing prosperity, jobs, investment and economic growth to regions that may previously have lost out to London.
 
Construction of the line, which will be carried out in two phases, is expected to start this year, but this could be further delayed by financial issues, vocal anti-HS2 campaigns and doubts over the route of the second phase. Since its inception, HS2 has been beset by delays and complications, and this looks set to continue for the foreseeable future. 
 
Work is set to start in 2017, reach Birmingham by 2026 and be fully operational by 2033, but if these targets are to be met it is likely that a game of catch-up will need to be played.
 
The first phase will connect London to Birmingham, while the second phase will be a Y-shaped line ferrying passengers from Birmingham to Manchester on the western section (with links to Stafford, Crewe and Merseyside) and Birmingham to Leeds (via an East Midlands Hub) on the eastern section. The eastern part of the second phase is also set to connect to Sheffield, but the government have delayed the decision on how HS2 will actually reach the Steel City.  
 
With train speeds of 250mph – quicker than any other train service currently operating in Europe - HS2 would dramatically reduce commute times between London and the north, connecting the country on a greater scale than ever before.

Property in Leeds – has HS2 had an effect? 

Leeds, one of Yorkshire’s foremost cities, would be set to benefit more than most from the arrival of HS2, with improved transport links to the East Midlands, Birmingham and London. Leeds is already a major legal and financial hub – second only to London – but the city with a population of more than 770,000 and a thriving university would become an even more attractive place to live, work, study, and commute from when (or, more accurately, if) HS2 is fully realised.
 
The journey time from Leeds to London, for example, will be reduced from the current average of 131 minutes (2 hours 18 minutes) to just 81 minutes (1 hour 21 minutes). 
 
This mouth-watering prospect is having an impact on house prices in the Leeds region, too. According to research carried out by property consultants Savills, house prices in Yorkshire are set to rise by an average of 10% over the next five years, with rents set to grow by 13.5%. Both these things are being driven by strong economic growth and a rising population in what Savills calls the Leeds region, which includes Leeds, Bradford, Barnsley, Harrogate, Wakefield and York. An increase in demand for homes, coupled with a shortage of available housing, is driving up both house prices and rents across the region.
 
There has been a 3.1% growth in population in these areas since 2011, with a further 2.4% rise (equal to 73,000 people) predicted in the next five years. There is no knowing for sure whether this has coincided with the increased talk about HS2, but the prospect of much-improved transport links has no doubt been a factor in the thinking of many buyers and tenants moving into the area.
 
Despite its prominence, Leeds also remains very affordable, which is helping to keep demand high. The average house price in Leeds is just under £190,000; even cheaper in the city centre itself (around £142,000). Prices have also been rising in recent times, up by 5% in the last year and 11% since 2014. Again, it’s not clear if this is a direct result of developments with HS2, but it’s definitely a factor.
 
Demand for housing in Leeds and the wider Leeds region is high, and not currently being matched by supply, with the number of new homes being built still failing to reach pre-recession levels. There is no suggestion that people are being put off buying homes in Leeds, though, especially in central areas.
 

Opposition and options for local residents

 Not everyone is happy about HS2 or the prospect of its arrival in Leeds, in particular those in the surrounding countryside who fear the greenbelt will be destroyed, their towns or villages blighted and their homes swallowed up. Much of the opposition to HS2 has been formed around the environmental and social impact it could cause to surrounding communities.
 
To try and offset this, the government has set up a compensation scheme for those whose properties are affected by HS2. Depending on the location of the property, and which phase of HS2 a homeowner is affected by, some people could be eligible to sell their home to the government ‘at its (‘unblighted’) value or receive a lump-sum payment’.
 
There are a number of different HS2 property schemes available to sellers, all dependent upon location. Homes may be situated in the HS2 ‘safeguarded area’, ‘the rural support zone’ or ‘the homeowner payment zone’. Or, alternatively, the property may exist outside of these zones but still be affected.
 
For homeowners with a property in a safeguarded area, the Express Purchase Scheme and the Need to Sell Scheme are both on offer. With the Express Purchase Scheme, the government will buy back houses within 60 metres of the HS2 route centre line at full market value plus a 10% ‘home loss’ payment. Reasonable expenses (stamp duty, surveyors’ and legal fees, removal costs, etc) will also be covered. With the Need to Sell Scheme, homeowners will need to have a ‘compelling reason’ to sell (e.g. ill health, unemployment or new job relocation) but can’t because of the issues HS2 is causing.
 
If a property exists in a homeowner payment zone, meanwhile, the government has set up the Homeowner Payment Scheme, which entitles certain homeowners to between £7,500 and £22,500 in compensation depending on how far their property is from the proposed HS2 line.
 
If a property is outside the zones and outside the safeguarded area, and therefore not eligible for a scheme, homeowners can still use the Need to Sell Scheme if they are unable to sell because of HS2.
 
One further option is Rent Back, where homeowners sell their homes to the government via one of the above schemes and then apply to rent it back out so they can continue living in the property, albeit without the problems of owning a home in a potentially blighted area. 
 
Of course, HS2 is still struggling to get off the ground and looks set to suffer from further delays and hold-ups before construction begins. 2017 has been pencilled in as a start date, but there is absolutely no guarantee this will be met. There is even a small chance that HS2 may be scrapped entirely, although the government will be determined to avoid such a humiliating climb-down.
 
For now, everything is still up in the air. Supporters will continue to trumpet the many benefits of a nationwide high-speed rail scheme, while critics will point to all the downsides – the ballooning cost, the environmental damage, the social impact, etc.
 
It is surely in the interests of everyone to come to a conclusion either way, but all the evidence points to the difficult history of the HS2 project continuing to be difficult and problematic in the future.

 

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