Heathrow plans £550m deal for third runway residents

Heathrow is one of the world's busiest airports, with 69 million passengers a year

Heathrow Airport has set aside £550m to compensate residents who will be affected if a third runway is built.

The airport said owners of 750 homes that would need to be demolished would be offered 25% above the market value of their properties.

Other residents will be compensated for noise pollution.

The airport will put its proposal to the Airports Commission, which is considering a number of options.

Heathrow Airport's proposal also offers to pay stamp duty and legal fees for residents who have to buy new home.

For a £250,000 property, homeowners would receive £312,500 compensation, plus £7,500 stamp duty costs and legal fees.

Colin Matthews, Chief Executive of Heathrow, said the airport had sought ideas for better compensation since a previous runway plan was rejected.

"We recognise that the expansion of Heathrow deserves an exceptional compensation scheme.

"That's why we're going further than statutory schemes or government guidance.

"People will receive fair compensation in the event that Heathrow expansion goes ahead," he said.

Busiest airport

Under previous proposals for a third runway, £90m was allocated for noise insulation and compensation.

Heathrow is one of the world's busiest airports, handling more than 69 million passengers a year.

Options floated by the Airports Commission, which is is looking at the future of air travel in the UK, include creating a third runway at Heathrow, or extending the northern runway to the west.

Mayor of London Boris Johnson supports the building of a new airport in the Thames Estuary and is opposed to expansion at Heathrow.

The commission will report after 2015.