Landowners want the Chancellor to amend legislation on late compensation payments for compulsory purchase orders, which penalise land and business owners.
The Country Land and Business Association (CLA) is lobbying chancellor Philip Hammond to ensure compensation interest rates are increased when they are next reviewed on 30 September.
The current system means the longer the acquiring authority waits to make payment, the less they have to pay, due to negative interest rates.
Interest rates for late payments of compulsory purchased lands or property stand at 0.5% below the Bank of England base rate. Last week’s base rate cut (4 August) to 0.25% leaves landowners facing a negative interest rate of -0.25%.
CLA president Ross Murray wants an increase in interest rates on late payments to be in force come the September review, as promised by ministers earlier this year:
“Ministers committed to fair rates of interest, but the changes have yet to be implemented. The base rate cut reinforces the urgency in effecting this important change.”
He added: “Owners of land and property affected by compulsory purchase have already suffered serious disruption to their businesses and their lives. Now those waiting for late compensation payments face the patently absurd and unfair prospect that the amount of compensation due reduces over time.”
The nature of compulsory purchase means that a significant portion of compensation payments is paid late, making an already difficult process for landowners yet more complicated.