Angela Rayner, the UK's Housing Secretary, is embroiled in a legal dispute with private equity investor Guy Hands over military housing. The conflict has escalated to the European Court of Human Rights in Strasbourg, France.
The case revolves around the Leasehold and Freehold Reform Act, introduced four months ago. This legislation, initially proposed by Michael Gove, aims to strengthen tenants' rights regarding ground rents and lease extensions. It also includes provisions for enfranchisement, allowing leaseholders to purchase their property's freehold.
Guy Hands' company, Annington Homes, owns 55,000 residences leased to the Ministry of Defence for military personnel housing. The firm has expressed concerns about the new law's potential impact on its property portfolio.
Annington argues that the legislation's vagueness could create a loophole detrimental to its ownership rights. The company fears leaseholders might acquire freeholds at below-market rates, significantly harming its business model. This legal action is based on a provision in the European Convention on Human Rights that guarantees "peaceful enjoyment" of property.
This dispute is part of a longer-standing conflict over the Married Quarters Estate. In 1996, the government sold its military housing portfolio to Annington for £1.7 billion. Sixteen years later, Guy Hands' Terra Firma acquired Annington for £3.2 billion. The government has since been attempting to reverse this arrangement, citing concerns about taxpayer value.
"The decision to sell the homes was disastrous because the MoD must pay Annington millions in rent every year for the property."
Annington has filed identical challenges in both the European Court of Human Rights and the British High Court. The company seeks clarification on how the new law will affect its property rights. This protective claim aims to prompt government clarification on the interpretation of the Act's provisions.
The Department for Levelling Up, Housing and Communities has refrained from commenting on the ongoing legal proceedings.