England and Wales · CPO Compensation: Land Compensation Act 1961 and Land Compensation Act 1973 — Equivalence Principle (No Better, No Worse) · Market Value (LCA 1961 s.5 Rule 2): Open Market Value at Date of Entry in the 'No Scheme World' · Disturbance: Removal; Relocation; Professional Fees; Rental Income Loss · Injurious Affection and Severance: Retained Land Depreciation · Home Loss Payment (LCA 1973 s.29): 10% of Market Value; Min £7,800; Max £78,000 — Displaced From Main Residence 12+ Months · Basic Loss Payment: 7.5% of MV; Max £75,000 — Investment Landlords; 1-Year Holding Minimum · Advance Payment: 90% of Agreed/Estimated Compensation Within 2 Months · UTLC: Costs Follow Event; Calderbank Sealed Offers · LURA 2023 Reforms

Compulsory Purchase Compensation UK — Market Value, Disturbance, Home Loss Payment, Basic Loss Payment, Advance Payment and Upper Tribunal Lands Chamber Disputes

Compulsory purchase compensation UK 2026 guide: equivalence principle (no better, no worse); market value (LCA 1961 s.5 Rule 2 — open market; 'no scheme world' — strip out scheme enhancement and blight); disturbance compensation (removal; relocation; professional fees; rental income loss during dispossession); injurious affection and severance (retained land depreciation); home loss payment (LCA 1973 s.29 — 10% of MV; min £7,800; max £78,000; 12-month main residence occupation minimum; owners and qualifying tenants); basic loss payment (7.5% MV; max £75,000; investment landlords; 1-year holding minimum); advance payment obligation (90%; within 2 months; interest on late payment); Upper Tribunal (Lands Chamber) dispute resolution; Calderbank offers; Levelling-up and Regeneration Act 2023 (LURA 2023) CPO reforms.

14 min readUpdated 7 June 2026Last reviewed: 17 May 2026compulsory-purchasecpo-compensationhome-loss-paymentbasic-loss-payment

Market Value in the No Scheme World — Disturbance, Injurious Affection and Severance

The primary head of CPO compensation is the open market value of the interest acquired, assessed in the 'no scheme world' — ignoring both the enhancement in value caused by the acquiring scheme and the blight (reduction in value) caused by its announcement. Both the claimant and the acquiring authority appoint independent RICS-qualified valuers; if compensation cannot be agreed, the Upper Tribunal (Lands Chamber) determines the value.

Market value (LCA 1961 s.5 Rule 2): open market value of the freehold or leasehold interest at the valuation date (date of entry or General Vesting Declaration — whichever is later)
'No scheme world' (LCA 1961 s.5 Rule 3; Neighbourhood Planning Act 2017): assessed ignoring both the enhancement and the blight caused by the scheme — can produce a value significantly different from current market price
RICS valuation: the claimant should appoint their own independent RICS-qualified Red Book valuer — professional fees for the valuer and solicitor are recoverable from the acquiring authority
Disturbance compensation (LCA 1961 s.7 and case law — 'consequential losses'): removal costs; relocation costs; cost of finding and fitting out alternative premises; rental income lost during the dispossession period; temporary accommodation costs; professional fees for relocation
Injurious affection and severance (LCA 1961 s.7 — PARTIAL ACQUISITIONS ONLY): where only part of the landlord's land is acquired, the depreciation in value of the retained land is also compensable — severance (physical separation) and injurious affection (diminution in value of retained land caused by the scheme works)

Home Loss Payment, Basic Loss Payment and Advance Payment

Beyond market value and disturbance, two statutory top-up payments are available depending on whether the landlord occupies the property as their main home (home loss payment) or owns it as an investment (basic loss payment). Both must be actively claimed by written notice to the acquiring authority.

Home loss payment (LCA 1973 s.29): available to owners AND qualifying tenants displaced from their MAIN DWELLING; must have occupied as main residence for 12+ months immediately before displacement; amount: 10% of market value; minimum £7,800; maximum £78,000 (2023/24 — reviewed annually by DLUHC); write to the acquiring authority to claim
Basic loss payment (LCA 1973 s.33A-33C — added by PCPA 2004): available where the claimant does NOT qualify for home loss payment (e.g., investment landlords who let rather than occupy); 7.5% of the market value of the acquired interest; no minimum; maximum £75,000 (2023/24 — reviewed annually); the claimant must have held a qualifying interest for at least 1 year before the notice to treat or General Vesting Declaration
Advance payment obligation (LCA 1961 s.52 as amended): the acquiring authority MUST pay 90% of the agreed or estimated compensation within 2 months of the claimant's written request — always make a written advance payment request immediately after entry
Interest on late advance payment: if the advance payment is not made within 2 months, interest accrues at the statutory interest rate from the date of the request (or the date of entry if earlier)
LURA 2023 reforms: the Levelling-up and Regeneration Act 2023 has strengthened the 'no scheme world' provisions and is introducing measures to speed up the CPO process — being implemented in phases from 2024

Upper Tribunal (Lands Chamber) — Dispute Resolution, Calderbank Offers and Costs

Where the acquiring authority and the claimant cannot agree on the amount of compensation, either party may refer the dispute to the Upper Tribunal (Lands Chamber) (UTLC) — successor to the former Lands Tribunal. The UTLC has specialist surveyor-members and lawyer-members experienced in compulsory purchase valuation disputes.

UTLC procedure: each party files a statement of case; exchange of expert RICS valuation reports; hearing before a Tribunal Member (surveyor-member or lawyer-member); written decision
Costs generally follow the event: the losing party typically pays the winning party's reasonable costs — subject to the UTLC's discretion
Calderbank (sealed) offer: a sealed offer of settlement made by one party — if the claimant's award exceeds the authority's sealed offer, the claimant typically recovers costs from the date of the offer; if the award is at or below the offer, the authority may recover its costs from that date. Making a well-judged Calderbank offer is an important tactical step
Appeal: UTLC decisions are subject to appeal only on a point of law (to the Court of Appeal) — factual findings on value are rarely disturbed on appeal

Frequently asked questions

What is the equivalence principle in compulsory purchase compensation?+

The equivalence principle (also called 'no better, no worse') is the fundamental basis of CPO compensation: the claimant is entitled to be put in the same financial position as if the compulsory acquisition had never happened. This means market value of the land acquired (in the 'no scheme world') plus disturbance compensation (removal; relocation; professional fees) plus severance/injurious affection for retained land. The landlord should appoint an independent RICS valuer to assess the full claim.

What is the home loss payment in CPO and who qualifies?+

The Home Loss Payment (LCA 1973 s.29) is available to owners or tenants displaced from their main dwelling as a result of CPO who have occupied the property as their main residence for at least 12 months immediately before displacement. Amount for owner-occupiers: 10% of market value; minimum £7,800; maximum £78,000 (2023/24 figures, reviewed annually). Tenants: £7,800. Submit a written claim to the acquiring authority.

Can an investment landlord claim compensation if their BTL property is compulsorily acquired?+

Yes — investment landlords who do not occupy the property as their main home are entitled to: (1) market value (LCA 1961 s.5 Rule 2 — in the 'no scheme world'); (2) disturbance compensation (professional fees; any rental income loss during dispossession); (3) basic loss payment (LCA 1973 s.33A): 7.5% of the market value of the acquired interest, maximum £75,000 (2023/24), provided the landlord has held the interest for at least 1 year. Professional fees (valuer; solicitor) are also recoverable.

What is the advance payment obligation in CPO?+

Under LCA 1961 s.52 (as amended), the acquiring authority must pay 90% of the agreed or estimated compensation within 2 months of the claimant's written request (or from date of entry if no request made but entry has occurred). If not paid within 2 months, interest accrues at the statutory interest rate. Always make a written advance payment request immediately after entry — the claimant does not need to wait for the full compensation to be agreed.

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Compulsory Purchase

Advance Payment of Compensation UK — CPO 90% Advance, Interest, and Home Loss

When a landlord or property owner's land is compulsorily acquired, the full assessment and payment of compensation can take months or years while disputes about valuation, disturbance, or business loss are resolved. The advance payment of compensation regime under s.52 Compulsory Purchase Act 1965 (as amended by Planning and Compensation Act 1991 and Housing and Regeneration Act 2008) allows the claimant to request an advance payment of 90% of the acquiring authority's estimate of the compensation as soon as the authority takes possession. Who can claim: landowners, freehold owners, long leaseholders, assured shorthold tenants with a disturbance claim, and business tenants. When the right arises: from the date of entry (physical possession by the authority following a notice of entry) or the general vesting declaration (GVD) vesting date — whichever is earlier. Payment period: the authority must pay within 3 months of the written request or 3 months from the date of entry (whichever is later). Interest: 8% per annum (statutory rate under LCA 1961 s.32A; set by Treasury Order) on: (i) advance payments not made within 3 months of the request; (ii) the full compensation (less any advance payment) from the date of entry until final payment. Additional statutory payments: (1) Home loss payment (LCA 1973 ss.29–32): payable to any person displaced from their only or main residence as a result of compulsory acquisition; must have been in residence for at least 1 year; 10% of the open market value of their interest (min £7,100; max £71,000; 2024 rates; adjusted annually by inflation); (2) Basic loss payment (LCA 1973 ss.33A–33K): 2.5% of the value of the interest acquired (freehold owners and long leaseholders; max £75,000); (3) Disturbance payment (LCA 1973 s.37): reasonable costs of moving for persons displaced without a legal interest (licensees; statutory tenants; persons in occupation without title); covers removal costs, temporary accommodation, higher costs at alternative premises. Upper Tribunal (Lands Chamber): determines disputed compensation; interest accrues throughout; specialist compulsory purchase solicitors and RICS-registered surveyors essential. Scotland: Land Compensation (Scotland) Act 1963; Acquisition of Land (Authorisation Procedure) (Scotland) Act 1947; same advance payment and home loss principles with Scottish-specific provisions.

Property Rights

Blight Notice UK — Compulsory Acquisition of Blighted Land by Landlords

A blight notice is a mechanism under Part VI Town and Country Planning Act 1990 (ss.149-171) by which qualifying owner-occupiers of blighted land can compel a public authority to purchase the property at unblighted market value. Planning blight arises when a public scheme (road, railway, regeneration designation, development plan allocation) makes a property unsaleable at its true market value — but the authority has not yet exercised its compulsory purchase powers. Blight triggers (statutory list): development plan allocation for a public function; highway scheme (Highways Act 1980); New Town/Development/Urban Development Corporation; safeguarded airport zone; railway scheme safeguarding (including HS2); resolution to acquire compulsorily. Qualifying owner-occupier: freeholder or long leaseholder (3+ years unexpired); must occupy the property (residential — 6 months in preceding 12 months; business — carrying on business throughout preceding 12 months); must prove attempted sale at unblighted value was unsuccessful due to blight. Pure investors and non-occupying buy-to-let landlords generally cannot serve a blight notice. Procedure: serve blight notice on the appropriate authority (National Highways; Network Rail/HS2 Ltd; LPA; development corporation); notice must comply with Compulsory Purchase of Land (Prescribed Forms) Regulations 2004; include evidence of attempted sale; authority has 3 months to accept or serve a counter-notice objecting; Upper Tribunal (Lands Chamber) determines disputed notices; compensation = unblighted market value under Land Compensation Act 1961. HS2 specific schemes: Express Purchase (residential owner-occupiers within 60m of route centreline; 100% unblighted value + 10% bonus up to £47,000); Need to Sell; Rural Support Zone. Scotland: Town and Country Planning (Scotland) Act 1997 ss.100-117.

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Change of Use Planning UK — Use Classes, HMOs, and Short-Term Lets

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