Compulsory Purchase Orders 2026 — Complete BTL Landlord Guide to CPO Compensation

The CPO process — from announcement to vesting

Understanding the stages of the CPO process helps landlords plan their response:

• Stage 1 — CPO announcement and public consultation: Before a CPO is made, acquiring authorities must carry out a feasibility process and may consult publicly. For major infrastructure projects (HS2; National Highways road schemes; rail projects under the Transport and Works Act 1992), the CPO boundaries are typically announced well in advance of the formal CPO application. For local authority CPOs (regeneration; housing; road widening), the process may be shorter. On announcement, landlords whose properties may be affected should: (a) check the CPO boundary plans to confirm whether their property is within the CPO boundary; (b) appoint a specialist CPO surveyor and solicitor immediately — fees are compensable as part of the CPO process
• Stage 2 — CPO made and submitted for confirmation: The acquiring authority formally makes the CPO (passes a resolution in the case of local authorities; promotes a Transport and Works Act Order for some schemes) and submits it to the Secretary of State (or relevant Welsh Government minister in Wales) for confirmation. An inspector is appointed to consider objections. Any owner or occupier within the CPO boundary can object — objections must be made within the specified period stated in the CPO notice (typically 21-28 days from publication). A public inquiry is held if objections are received from statutory objectors (owners, lessees with more than 1 year remaining, and occupiers with a legal interest). The inspector's report is submitted to the Secretary of State, who decides whether to confirm the CPO (with or without modifications), not confirm it, or require further inquiry
• Stage 3 — Notice to Treat or General Vesting Declaration: Once the CPO is confirmed, the acquiring authority can proceed to acquire the land. There are two main acquisition routes: (a) Notice to Treat (NtT): the acquiring authority serves a Notice to Treat on each owner, requiring them to submit a claim for compensation. The owner has 21 days to state their interest and provide preliminary particulars of claim. The acquiring authority then agrees to acquire the interest and negotiates compensation. If not agreed, either party can refer the matter to the Upper Tribunal (Lands Chamber). The acquiring authority takes possession when compensation is agreed or, after entering the land, after 14 days' notice to the owner; (b) General Vesting Declaration (GVD): the acquiring authority serves a GVD which vests all interests within the CPO boundary in the authority on a specified date (minimum 28 days from the GVD notice). The vesting date is typically specified in the GVD. On the vesting date, ownership passes to the acquiring authority regardless of whether compensation has been agreed. Compensation is then agreed post-vesting (or determined by the Upper Tribunal if not agreed)
• Stage 4 — Compensation negotiation and Upper Tribunal referral: From the date of the Notice to Treat (or GVD), negotiations proceed between the landlord's surveyor and the acquiring authority's valuer. If agreement is not reached within 6 weeks of the NtT, either party can refer the matter to the Upper Tribunal (Lands Chamber) for determination. In practice, most CPO compensation claims are settled by negotiation — the Upper Tribunal is used as a backstop. The Tribunal's decision is based on expert evidence from RICS-qualified surveyors on both sides. Legal costs may be awarded by the Tribunal (unlike in court proceedings where costs follow the event as a default, the Tribunal has discretion — but claimants who achieve an award at or above their formal offer typically recover most of their costs)

CPO compensation — what BTL landlords are entitled to

The full compensation principle means BTL landlords receive market value plus disturbance losses:

• Open market value — Pointe Gourde principle: The primary head of compensation is the open market value of the freehold or leasehold interest being acquired, assessed as at the date of vesting (the date the GVD takes effect, or the date the acquiring authority enters possession after an NtT). The Pointe Gourde principle (from Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947]) requires that the valuation ignores any increase or decrease in value caused by the CPO scheme itself — the property is valued as if the scheme did not exist. For BTL landlords, this means: the value of the property as a tenanted investment (with vacant possession value plus or minus the tenancy investment premium/discount) is assessed at the vesting date without the scheme blight effect
• Disturbance compensation — loss of rental income: In addition to the market value, landlords are entitled to disturbance compensation — the consequential losses arising from the compulsory acquisition. For BTL landlords, the main disturbance head is loss of rental income: the net rental income that would have been received from the acquired property for a period equivalent to the time it would have taken to reinvest the compensation proceeds in a comparable property. This is sometimes calculated as the rental income for a period of 1-2 years (depending on market conditions and the availability of comparable reinvestment properties). Professional fees (surveyor's fees for preparing and negotiating the claim; solicitor's fees for conveyancing and advice; planning advice; structural surveys) are also compensable as disturbance. Keep records of all professional fees incurred from the CPO announcement onwards
• Home Loss Payment and Basic Loss Payment: The Land Compensation Act 1973 (as amended by the Planning and Compulsory Purchase Act 2004) provides for two statutory loss payments: (a) Home Loss Payment: payable to an owner-occupier who has lived in the dwelling for at least 12 months before the making of the GVD or before being displaced. The payment is 10% of the market value of the owner-occupier's interest (minimum £6,800; maximum £77,000 in England — 2023/24 figures; updated periodically). BTL landlords who do NOT occupy the property as their main home are NOT entitled to a Home Loss Payment (it is for owner-occupiers). However, the BTL landlord's tenant (who occupies the dwelling) is entitled to a Home Loss Payment if they have lived there for 12+ months; (b) Basic Loss Payment: payable to freeholders, leaseholders with at least 1 year remaining, and businesses (not individual residential occupiers claiming Home Loss). The Basic Loss Payment is 7.5% of the open market value of the interest being acquired (minimum £0; maximum £75,000). A BTL landlord whose freehold property is subject to a CPO is entitled to the Basic Loss Payment of 7.5% (up to £75,000) in addition to the open market value and disturbance compensation. This is effectively an additional 7.5% 'top-up' on the freehold value, capped at £75,000
• Advance payment of 90% compensation: From the date of the Notice to Treat (or the date of the GVD), the landlord can demand an advance payment of compensation equal to 90% of either: (a) the agreed compensation (if agreement has been reached); or (b) 90% of the acquiring authority's own estimate of compensation (if not agreed). The advance payment must be made within 3 months of the demand. This is particularly valuable for BTL landlords who need cash flow to reinvest while the final compensation is still being negotiated. If the final agreed or determined compensation is less than the advance payment, the landlord must repay the difference (with interest). If the final compensation exceeds the advance payment, the balance (plus interest from the date of demand) is paid on final settlement

Blight notices and pre-CPO property sales

Where a CPO announcement has affected property value, owners have additional remedies:

• Blight notice — requiring the authority to purchase now: Where a property is designated in a development plan, transport scheme, or CPO proposal (but the acquiring authority has not yet exercised its powers to acquire), the property may be 'blighted' — its market value has fallen because potential buyers fear future compulsory acquisition. A qualifying owner (owner-occupier; business owner-occupier; owner of agricultural land) can serve a blight notice on the acquiring authority, requiring it to purchase the property immediately at its unblighted value. The acquiring authority can serve a counter-notice disputing the blight notice — grounds include that the land is not certain to be acquired, or that only part of the land is affected. If the counter-notice is disputed, the matter goes to the Upper Tribunal. Note: BTL landlords (who are not owner-occupiers) are generally not entitled to serve a blight notice — the right is primarily for owner-occupiers and businesses. However, BTL landlords who use part of the acquired property as their place of business (e.g., an HMO management office) may qualify in respect of that business use
• Selling a blighted BTL property before CPO completion: A BTL landlord whose property has been blighted by an announced CPO (but not yet formally acquired) may wish to sell on the open market. The blighted value (after CPO announcement) may be significantly lower than the pre-announcement value. Disclosure: any seller is required to disclose material information to buyers; the existence of a CPO affecting the property is material information that must be disclosed (Material Information under the Consumer Protection from Unfair Trading Regulations 2008 and the National Trading Standards Material Information guidance). Failure to disclose a known CPO can expose the seller to misrepresentation claims. If the property is sold before the CPO vesting date, the compensation claim passes to the new owner (the buyer at the time of vesting is entitled to the compensation). Buyers of blighted properties typically discount the price to reflect the uncertainty — in some cases, an informed buyer may price at the expected CPO compensation value
• Practical steps for BTL landlords on receiving CPO notice: (1) Appoint a specialist CPO solicitor and RICS-qualified CPO surveyor immediately — their fees are compensable; (2) Check the CPO boundary plans (available from the acquiring authority's CPO documentation) to confirm the extent of land being acquired; (3) Notify any tenants of the CPO proceedings — they have their own compensation rights; (4) Keep detailed records of all rental income for the preceding 3 years (as evidence for disturbance compensation calculation); (5) Request the advance payment of 90% of estimated compensation from the acquiring authority as soon as possible after the Notice to Treat or GVD; (6) Do NOT accept the acquiring authority's initial compensation offer without independent surveyor advice — first offers are often below the correct level; (7) Consider whether a blight notice is available if you are qualifying owner-occupier

Frequently asked questions