A company behind plans for a large retirement village has been awarded a government payout topping £10m after a new road built across the land to make way for HS2 “fatally undermined” the project.

Gerald Knight, director of Hambledon Land (Stoke Mandeville), announced plans for the complex with a swimming pool and restaurant on eight acres of meadow land south of Aylesbury, Buckinghamshire, eight years ago.

Three years later in 2021, as plans commenced, the grassland site was incorporated in the local district council’s Local Plan for older people’s accommodation.

But in the same year, the land was bisected when a 2.7-acre strip of the land was acquired by the Department for Transport (DfT) for the Stoke Mandeville relief road, which formed part of changes to the road network to allow the HS2 line to be built.

At a Upper Tribunal (Lands Chamber) hearing, landowner Landlink (Stoke Mandeville) Ltd, of which Mr Knight is a director, made a claim for compensation on the land seized, the loss of value for the remaining 5.3 acres of land and the disturbance.

Martin Rodger KC, deputy chamber president, awarded compensation of £10.6m for the DfT to pay Landlink (Stoke Mandeville) Ltd.

It marks another costly acquirement of land for the long-delayed high speed rail project that transport minister Heidi Alexander revealed could now cost as much as £103bn – almost three times the estimated £37.5bn cost in 2013.

The line between Birmingham and London will not open until at least 2036, according to HS2.

Total spend on land and property along the line was already at £3.1bn in 2024, according to a report by the National Audit Office. On top of that, £592m was spent on land and properties for the now-cancelled legs of the line to Manchester and Leeds.

The Taxpayers Alliance called the latest compensation award “another eye-watering bill” for HS2. It comes after a celebrity dog whisperer was awarded £5m after his business was forced to close for an axed section of HS2 in Staffordshire.

A Taxpayers’ Alliance spokesperson said: “This judgement serves as a shocking reminder of how the costs for HS2 have spiralled far beyond budget amidst seemingly endless delays. It's high time this white elephant was scrapped before even more taxpayers' cash is squandered.”

The case was brought to tribunal after Landlink (Stoke Mandeville) Ltd and DfT could not agree on the amount of compensation that should be awarded.

It heard how the building of the road had left the company’s land in two parts; a one-acre triangular patched and a larger 5.3-acre section.

As a result, the landowner claimed that its prospects of a successful development had been “fatally undermined” due to the delay and construction of the road. It also said that the leftover land was too small for a viable development.

The DfT argued that a 121-unit retirement complex was still possible on the leftover land – but a planning expert on behalf of the landowner said such a scheme would have no realistic prospect of obtaining planning permission.

The expert said the scheme, to get planning permission, would have to be reduced to a maximum of 77 units.

Another expert on behalf of the landowner told the tribunal that a developer of retirement villages would not be interested in the remaining land as schemes smaller than 100 units were not seen as viable.

The complex, he said, required a larger number of residents to fund the expensive leisure and recreational facilities which would make the home attractive.

The tribunal concluded that the company’s land had been worth £10.15m, but was now worth £190k, meaning a loss in value of £9.96m. The landowner was also compensated for fees and seizure of the strip of land for the road, resulting in a total figure of £10.62m.

A DfT spokesperson said: "This case relates to land acquired in 2022 under the previous Government. After years of mismanagement, we are resetting HS2 to get this project back on track.

“HS2 will add much-needed rail capacity to the rail network, provide more reliable services and help unlock economic growth, jobs and homes in London, the West Midlands and beyond.”