Psst! Two 149-acre farms with planning for sale, going cheap!

From yesterday's FT, more HS2 tomfoolery:

The Department for Transport estimates 338 homes will have to be demolished to create the line, about two-thirds of which are in Euston...

Right, so they are going to have to displace 225 households in north/central London, pay up, move on.

Meanwhile, Knight Frank, the property services group, estimates that more than 800 houses – 250 of which are in the top bracket for council tax – along the 140-mile stretch of railway will suffer some kind of adverse impact. James Del Mar, head of Knight Frank’s HS2 team, says it is impossible to quantify the impact the project will have on property values along the route, as compensation for land affected will not be granted until 2015...

Somebody somewhere is missing a right old trick here.

Ninety-five per cent of the route is through open countryside, which is why there are only 113 houses which will have to be demolished and 800 which will "suffer an adverse impact". Let's say the houses were worth £600,000 and halve in value to £300,000. The government could bung them all £600,000 compo, total cost £548 million, about two per cent of the total cost of HS2 (before inevitable cost over-runs) and tell them to lump it.

Or The Man From The Ministry could wise up and realise that what's being affected here is purely the location value of those houses, and, seeing as those houses are in The Hallowed Green Belt, the scarcity value - it is nigh impossible to get planning for a new house in the affected areas. So the £600,000 value consisted of £150,000 rebuild cost/value of the building and £450,000 location/scarcity value of the planning permission (which has now fallen by two-thirds).

Therefore, the correct strategy from the point of view of the government (on behalf of the taxpayer as well as on behalf of those affected) would be to grant each and every single affected owner the personal right to build a carbon copy of their house anywhere they wish within a 2-mile radius of their old home. Once they have tracked down farmers who'll sell them the required bits of agricultural land for a few thousand quid (land without planning permission is dirt cheap), the government can then build a carbon copy of their old house for £150,000 and do a straight swap, old-for-new. They can even chuck in a free removal service and get the local Lord Mayor to bring them some champagne and flowers.

The total cost of this exercise is thus £137 million (913 x £150,000). The income from this exercise is the value of the 800 houses which the government gets in exchange and which are "affected" but don't have to be demolished. At depressed price of £300,000 each, that's still £240 million, which is more than enough to cover the cost of building the carbon copies, with £103 million left over as net profit!

Now, see if you can apply the same logic to sorting out Farmer John:

But at the far end of the line from Euston, in the rolling open countryside around Lichfield, John Barnes is preparing for his family’s 300-acre arable and sheep farm to be sliced in two.

“The railway will literally [sic] cut us in half. We’ll end up with the farm shop on one side of the track and a grain store on the other. Everything in the middle, including our home, will be wiped out,” he says. Mr Barnes, who also puts on weddings and runs a farm shop, says he fears for his children. “Whatever happens, it is blighted now and is unsaleable. But it is the next generation I am worried about; this place has been in my family for 100 years and it is their future that will be affected.”

Additional information: the average English farm is surprisingly small, somewhere in the region of 100 - 150 acres.