Garden cities: Homeowners could get payout if house values fall says Nick Clegg

Deputy Prime Minister said he did not want people to ‘lose out’ due to the creation of garden cities

Deputy Prime Minister Nick Clegg said the Government is "actively looking" at forms of compensation to homeowners who live close to the new garden cities being built, if the developments affect the price of existing houses.

Mr Clegg said he did not want homeowners to "lose out" and claimed the Government could guarantee the price of people’s homes either by offering to buy their properties "up front" or offering compensation through reduced council tax.

Plans for the garden cities were announced in April by the Deputy Prime Minister as a bid to tackle the UK’s "chronic" housing crisis.

The development of three new cities has now been confirmed, each containing more than 15,000 homes, two of which are expected to be built in the south east of England.  

Speaking to the BBC’s Countryfile programme, Mr Clegg said: "We could maybe give deductions on [homeowners’] council tax over a period of time during which the garden city is being built, we could possibly also say to those homeowners where they think the price of their homes will be effected, we will guarantee the price of their home, by buying it, if you like, up front."

Major construction projects are known to carry the risk of knocking the value off of nearby properties while the work is carried out, and Mr Clegg said the Government is "actively looking" at plans that could see the houses of those affected bought at full market price during the period of work.

"We’re actively looking at things like that to show that we will go the extra mile to allay those concerns of people who feel tha their property, or the price of their home, might be affected. We don’t want to lose out.

"This is something that we do anyway, don’t we, as a country, where you can have big infrastructure projects – I think the same principles can and should be applied to garden cities," he told the programme.

Mr Clegg said he wants a shortlist drawn up of potential locations for new garden cities to be published by December this year.

It follows the worst period of construction of new homes in four years, with only 109,370 home built in 2013, despite the number of households in the UK expected to grow by 221,000 each year over the next 10 years.

The garden cities are reminiscent of those build after the Second World War, when families were displaced following the Blitz, there was a baby boom, and the UK was suffering from a weak construction industry. At the time, 27 new towns were built across the UK, including the now well-established Milton Keynes, Stevenage and Corby.

Mr Clegg told the Telegraph: "Many people will want to live in world-beating garden cities.

"The whole point of them is that they must be well designed, support jobs, contain top-quality green space and services – the best of town and country in one place. But we also need to make sure that no individuals lose out during the development."

The paper reported the compensation scheme could mirror plans drawn up by ministers to help out homeowners living along the route of the London to Birmingham HS2 line, which would see the Government but properties within 60 meters of the line at full market value plus an extra 10 per cent.

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