The Home Loss Payments Regulations 2016

The Home Loss Payments (Prescribed Amounts) (England) Regulations 2016 (SI 2016/789) have been made and come into force on 1 October 2016

The Regulations increase the amount of compensation payable in England under the Land Compensation Act 1973 (LCA 1973) to a person whose home is acquired by compulsory purchase. They revoke the Home Loss Payments (Prescribed Amounts) (England) Regulations 2015 (SI 2015/1514) in relation to any displacement occurring on or after 1 October 2016.

Compensation is payable to a person who is displaced from a dwelling by a compulsory purchase order (section 29, Land Compensation Act 1973 (LCA 1973)). This type of compensation is known as a “home loss payment”. The LCA 1973 provides two alternatives for establishing the amount of a home loss payment:

The home loss payment for someone who occupies a dwelling under an “owner’s interest” is calculated in accordance with section 30(1) of the LCA 1973. The payment will be 10% of the market value of the interest, but subject to both maximum and minimum limits. An “owner’s interest” is effectively an interest in the freehold of the dwelling, or in a lease with more than three years left to run.

If the home loss payment does not fall within section 30(1) of the LCA 1973, then the compensation payable will be the amount specified in section 30(2).

The Home Loss Payments (Prescribed Amounts) (England) Regulations 2016 (SI 2016/789) (Regulations) have been made and come into force in England on 1 October 2016. The Regulations revoke the Home Loss Payments (Prescribed Amounts) (England) Regulations 2015 (SI 2015/1514) in relation to any displacement occurring on or after 1 October 2016.

Under regulation 2(2) of the Regulations:

  • The maximum home loss payment under section 30(1) of the LCA 1973 is increased from £53,000 to £58,000.
  • The minimum home loss payment under section 30(1) of the LCA 1973 is increased from £5,300 to £5,800.
  • The prescribed amount of home loss payment under section 30(2) of the LCA 1973 is increased from £5,300 to £5,800.

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.

Source: Practical Law / Home Loss Payments (Prescribed Amounts) (England) Regulations 2016 (SI 2016/789).