A coalition of investors, retirees and freeholders has formed to challenge the UK government’s leasehold reforms, claiming the changes could result in losses exceeding £30 billion.
The group, operating under the name Justice for Property Rights, comprises at least 200 members and is seeking legal advice on bringing a collective action before the European Court of Human Rights.
The £30 billion figure is based on a 2023 Treasury assessment of the impact of leasehold reforms, which include changes to lease extension rules and capped ground rents. The coalition argues these reforms will significantly reduce investor income from ground rent arrangements.
Legal challenge follows court decision
The campaign follows a recent Court of Appeal decision granting permission to a consortium of major freeholders to challenge the Leasehold and Freehold Reform Act 2024. The group states that the court’s reference to “proportionality” will be central to any legal challenge.
According to the coalition, public debate has focused disproportionately on large estates and institutional investors, whilst overlooking private individuals with modest portfolios. These include pensioners relying on ground rent income, families with small freehold interests, and resident-controlled freehold companies.
The group’s statement questioned why UK taxpayers should bear potential liabilities exceeding £30 billion, particularly when a substantial portion of gains would flow to affluent leaseholders in central London. This comes as other property sector participants prepare for regulatory changes affecting their business models.
Property rights concerns
Justice for Property Rights states it supports action against genuinely unfair lease terms and efforts to make commonhold a workable alternative. However, the group warns that current proposals risk “retrospectively reducing or extinguishing rights” attached to existing ground rent arrangements without clear compensation commitments.
The coalition’s statement expressed concern about “populist policymaking” eroding property rights protections and the rule of law. It argued that both leaseholders and freeholders made long-term decisions based on existing legal frameworks, advised by professionals with duty of care obligations.
The group’s formation adds to ongoing debates about property regulation and reform across the UK housing sector. The legal challenge could have implications for how the government implements leasehold reforms and whether compensation mechanisms will be required.
The Treasury’s 2023 assessment indicated the reforms would transfer significant value from freeholders to leaseholders through reduced ground rent income and changes to lease extension calculations. The Justice for Property Rights campaign represents an attempt by affected investors to secure compensation or modifications to the reform package.
