Increased compensation will be available to people whose homes are compulsorily purchased, Planning Minister Keith Hill said today.

Home loss payments are made to people whose homes are bought compulsorily for all types of development, including large-scale regeneration projects. In addition to receiving the market value of their home plus disturbance compensation, owner-occupiers also receive a home loss payment of 10% of the market value of their property, subject to maximum and minimum thresholds.

From 1 September 2004, the maximum home loss payment to owner-occupiers displaced from their home will increase from £31,000 to £34,000 and the minimum payment will increase from £3,100 to £3,400. The flat rate for tenants will increase from £3,100 to £3,400.

Keith Hill said: "People must be compensated fairly if they have to leave their homes. The current thresholds for home loss compensation were set last year and we have decided to increase them again following the first of our promised annual reviews.”

"Compulsory purchase is an important tool in regenerating our towns and cities - helping deliver affordable homes for key workers and young families. But that doesn't make it easier for people who homes are bought. We need to make sure they continue to get a fair deal too."

Home loss payments are paid at a rate of 10 per cent of the market value to owner-occupiers who are displaced from their homes as a result of compulsory purchase or certain housing orders. These are subject to maximum and minimum payments. Tenants receive a flat rate equal to the minimum payment to owner-occupiers.