Parasitical, wealth-eroding freehold landlordism has suffered a devastating blow, but the appeals may keep coming if landlords reckon delay works in their favour
The full Judicial Review ruling is here:
https://caselaw.nationalarchives.gov.uk/ewhc/admin/2025/2751
By Liam Spender
Liam Spender is a trustee of LKP and head of real estate litigation at Velitor Law, whose class action leasehold insurance commissions is reported on BBC here The views expressed are his own.
Friday brought a 167-page judgment from the High Court. Over 558 paragraphs, two judges comprehensively dismissed the claims of freehold investors’ that the Leasehold and Freehold Reform Act 2024 (“LAFRA”) violates their human rights.
Specifically the freeholders challenge three measures within LAFRA.
First, the removal of their right to a 50% share of marriage value when a lease with 80 years or less is extended.
Second, the cap on the ground rent that can be taken into account in calculating the price payable for an extended lease.
Third, the elimination of the freeholders’ right to charge leaseholders the legal and professional fees for extending leases.
The freeholders making the challenge were the relatively acceptable face of ground rent grazing, although the term is relative as all are involved in a racket.
The Grosvenor and Cadogan Estates formed one group of claimants. The ARC Time Freehold Income Fund, the Ground Rents Income Fund and PGIM formed another. There were separate claims from Long Harbour, Albanwise Wallace, John Lyon’s Charity and the Portal Trust.
Other large freeholders, such as Vincent Tchenguiz’s Consensus Business Group and James Tuttiett’s E&J Estates, were conspicuous by their absence.
The freeholders claim the changes in LAFRA violate their right to enjoyment of their private property under Article 1, Protocol 1 (“A1P1”) of the European Convention on Human Rights. They argue the measures expropriated their property without proper justification or fair compensation.
The freeholders lost. Badly. But they have nevertheless succeeded in delaying the implementation of the Act for more than 18 months. And counting, which will be the real purpose of their claim to them.
The High Court comprehensively dismisses the freeholders’ challenge. It finds that Parliament is entitled to address fundamental defects in the system of property ownership by reforming the system in favour of leaseholders, even at freeholders’ expense.
The judgment is sharply critical of the idea that freeholders thought they could live in a world where the mechanism for calculating the price payable on a statutory leasehold extension would never change, as they argued.
The High Court finds that they took the risk that it would change and they have no right to complain about it now.
The freeholders lost so badly for three reasons
First, is that what they were seeking – a declaration of incompatibility – is difficult to achieve. The most recent statistics show that in the 25 years of the Human Rights Act’s history, there have been only about 50 declarations. About 20% were overturned on appeal. The rest were addressed by changing the law. In some cases the law had already changed and the declaration related to previous law.
Second, a challenge based on A1P1 is even less likely to succeed than a claim for a declaration of incompatibility.
There are just two examples in 25 years of the Supreme Court upholding an A1P1 argument. Both concerned devolved jurisdictions in Wales and Scotland where something had obviously gone badly wrong with the legislative process.
Large sections of the High Court’s careful judgment are dedicated to explaining the years of thinking that went into LAFRA by the Law Commission and others, leading to the conclusion that there was no similar error in Parliament’s decision making.
Third, even leaving aside the formidably difficult legal terrain, and despite their case being argued by some of the most expensive lawyers in London, the freeholders’ argument was just not good enough to prevail.
The freeholders’ case depended essentially on showing that Parliament adopted LAFRA without making a rational decision to prefer leaseholders over freeholders, and in a way that penalised freeholders financially with no wider public justification.
If that sounds hard to do, then it is so. The foremost difficulty the freeholders face is that it is not the role of the judiciary to re-make decisions that are the political judgment of Parliament.
Parliament’s job is to listen to the electorate and decide where to draw the line on issues of social importance. It is not the role of the courts to interfere in that decision unless there is something very seriously wrong with how or where the line has been drawn. The freeholders fail to make that case.
Of particular significance in the judgment is the way the High Court has dealt with the freeholders’ argument that Parliament was wrong to pass LAFRA because it deprives them of market value for their assets, which they say must include marriage value and uncapped ground rent.
The High Court finds that there is no single definition of market value.
The High Court also finds that market value is not the required measure of compensation.
It is unpersuaded by the highly technical approach adopted by the freeholders trying to justify the current system of lease extension and enfranchisement as being derived from wider valuation practice, including the tired old examples of the increase in value caused by joining neighbouring fields and reuniting a pair of Chinese vases.
The High Court finds that wider valuation practice is inapt to describe what happens when a lease is extended.
When Parliament establishes a statutory scheme of compensation, as here, then it is entitled to prescribe assumptions as to how value will be determined.
The assumptions in the statute can be changed to affect the value to be paid without infringing A1P1, which is all that is actually happening here.
Another major failure in the freeholders’ case is their argument that the human rights jurisprudence has moved on since the Duke of Westminster challenged the Leasehold Reform Act 1967 (and also lost, in a case called James).
The High Court finds that the much-vaunted cases of Lindheim and Karibou Foundation concerned property rights that were very different to English residential leaseholds. In Lindheim and Karibou Foundation the argument was purely about ground rent because the relevant plots were sold without an upfront premium being paid. The High Court finds that this is not the same as English leaseholders, who effectively have to pay to buy their property interest again even after paying a large upfront premium and a ground rent.
The High Court also considered that Lindheim and Karibou did not say anything different to James, which is that Parliament is entitled to adjust the law to favour leaseholders over freeholders provided it does so to address a problem of social policy.
Looking back over LKP’s contemporaneous reports, it seems all the warning signs were there in the comments the judges were making during oral argument.
https://www.leaseholdknowledge.com/tag/judicial-review
It is also gratifying that many of the arguments LKP intended to put forward when it applied to intervene on the government’s side are reflected in the way the court has approached the legislative history and purpose of LAFRA.
The expense of this case must have been mountainous for the freeholders.
Collectively, and to date, the freeholders may not have got change from £5 million for their own costs. Their legal teams were actively threatening the government over this litigation even before LAFRA was passed. Probably about half the expense came from the hearing alone.
Even at the low rates charged by the government legal team, they will now also be looking at having to pay a figure in the low six figures towards the government’s costs. Ideally, paying them off first would a condition on any permission to appeal.
The loss has evidently come as a blow to the freeholders. Years of confident predictions, and of smiling threats, of the courts siding with them and the taxpayer having to fork out billions in compensation … are dismissed with often lacerating criticism in the judgment.
The voices of the freeholder class and their enablers, the surveyors, the lawyers, the managing agents, the harder of thinking in the House of Lords have all fallen silent.
It seems not a one of the freeholders has put out even the usual milquetoast statement of strongly disagreeing and considering options for appeal.
Perhaps their pomp is brought down to the grave. But freeholders have a preternatural ability to cling on.
What comes next?
Inevitably, the freeholders will try to appeal. They will need permission to bring an appeal. They have to seek permission from the High Court first.
The test is whether the appeal has a real prospect of success or whether there is some other compelling reason to hear an appeal.
The judgment is very carefully reasoned and well-written. The issues have been considered by a Divisional Court, in this case consisting of one Court of Appeal judge (and former President of the Lands Chamber) and one soon-to-be Court of Appeal judge.
The legal prospects of appealing it seem low. That weighs against permission to appeal.
Given the scale and importance of the issue, it would be surprising if the freeholders did not whine that they should get permission on the basis of there being some other compelling reason to hear an appeal.
Their argument would be that there are many billions at stake and there are many hundreds of thousands of leasehold properties affected and that does require certainty in the law. Whether that certainty requires an appeal or can best be delivered by leaving the decision as it stands is the question.
If the Divisional Court refuses permission, the freeholders can seek permission directly from the Court of Appeal. It may have a different view, even if the Divisional Court refuses. It may think the same.
If the freeholders can get permission to appeal, another question is whether the appeal goes to the Court of Appeal or whether it goes straight up to the Supreme Court as a leapfrog appeal.
A leapfrog appeal is rare, but it is a possibility if the Divisional Court is persuaded of the public interest. The freeholders’ colossal sense of entitlement probably dictates that they try this approach.
The relevant test for a leapfrog appeal is whether there is a wide public interest in the decision going straight to the Supreme Court to save time, or whether the Court of Appeal would be bound by precedent to make the same decision and the legal issues in the relevant precedent have already been considered fully by the Court of Appeal and in the proceedings.
This case may fit the public interest ground for going to the Supreme Court and a leapfrog would knock off at least 18 months from the process.
The freeholders may also try to make arguments that the Court of Appeal would be bound by precedent to make the same decision, which they would say then merits an immediate review by the Supreme Court.
We will find out soon enough.
An application for permission to appeal from the High Court to the Court of Appeal must usually be made within 21 days of the judgment. An application for a leapfrog appeal direct to the Supreme Court must be made within 14 days of the date of judgment.
Even if the Divisional Court permits a leapfrog appeal it is still up to the Supreme Court to decide whether to take the appeal. The Supreme Court sometimes does refuse the leapfrog and require the case to go via the Court of Appeal.
Usually but not always the decision on permission to appeal is made on paper without a hearing. There may be a further hearing if there is an argument over how to document the court’s judgment in an order, or whether there is to be a leapfrog appeal, or perhaps over costs.
What are the freeholders prospects on appeal?
The prospects of the freeholders winning any appeal are poor. The freeholders would still face all the same legal and constitutional issues in trying to overturn the will of Parliament in a domestic court. An appeal would come with the added difficulty of already having their arguments comprehensively examined and dismissed.
A further added difficulty is that on appeal they have to show that the High Court has made a flawed assessment of Parliament’s decision and that Parliament’s decision is also wrong in law.
That is going to be very difficult to do given the comprehensive reasoning of the judgment.
Still a further difficulty is that it would be open to an appellate court to disagree with the High Court’s reasons, but still find other reasons that Parliament had made an A1P1 compliant choice.
How long will an appeal take if it happens?
If it happens and without expediting the process, typically an appeal to the Court of Appeal will take 12 – 18 months from permission to hearing. That may be reduced to a few months if the appeal is expedited.
A judgment from the Court of Appeal can take up to three months but there is no fixed timetable so it can be more or less.
An appeal to the Supreme Court is usually heard about a year after the application. Judgment typically takes a few months. Again there is also no fixed timetable for judgment so it may be more or less.
If the case passes through both the Court of Appeal and the Supreme Court without expedition then we are looking at another two to three years.
With a leapfrog and no expedition that may be reduced to about a year.
With a leapfrog and expedition it could come down to a period of months.
For example, the recent car finance commissions case went from the Court of Appeal to judgment of the Supreme Court in about 10 months.
And if the freeholders appeal to Strasbourg?
If the freeholders lose in the Supreme Court then they can apply to take their case to the European Court of Human Rights in Strasbourg. In a 2023 FAQ the Court said that even the most important cases there are rarely decided in less than three years.
If the government loses in the Supreme Court then it cannot appeal further. It would most likely look to amend LAFRA to make it compatible with the European Covention on Human Rights. That is likely to take some time because it would require extensive consultation and a new Act of Parliament.
And can the government get on with things even while litigation is in progress?
Yes, it can. Lindheim is an example of a government getting on with implementing the law it had passed even though it was later overturned.
The same choice is open to the British government given the clear reasoning in favour of LAFRA in the judgment.
The risks must be lower here considering Lindheim has been dismissed as a relevant precedent.
In any event there are areas of LAFRA that have never been subject to challenge, examples include regulations on insurance commissions, strengthening service charge protections and removing the landlord’s right to legal costs in disputes.
All those provisions could (and should) be implemented regardless of any ongoing litigation.
So why did the freeholders bother with judicial review?
Even if the expensive legal teams only whispered it to their clients, the freeholders must have been told the odds were against them.
First is because they have no choice. LAFRA is a death knell for their rotten business. They know this will be among their last stands. It is also in their nature. Their mindset is that leaseholders never matter except as a ready source of cash. The freeholders bully people to get their way and are prepared to spend any amount, usually of other people’s money, in so doing.
Second is because, whether their lawyers told them or not, it is doubtful they ever expected to win in the domestic courts.
They must have proceeded with two hopes. Either that they can drag their case to Strasbourg and delay LAFRA by years. Or that they can string it out long enough that a more favourable government comes along, or something else turns up. Perhaps both.
Third is that perhaps they think litigation gives them leverage against the government. The freeholders have lost the argument in Parliament. The Commons was deathly silent on any argument in the freeholders’ favour as LAFRA went through. In the Lords the freeholders had only the feeblest of voices. And even then from those with vested interests or from more credulous quarters.
The freeholders may think a protracted legal fight is perhaps something the government would not want.
The problem the freeholders have is that they have picked a fight the government has to fight and win, and it has the resources to do so. The government cannot allow private interests to bring challenges to Acts of Parliament successfully otherwise the country becomes impossible to govern. Nor can the government allow a legal precedent to be set that it cannot make any law affecting private financial interests, for the same reason.
But we cannot discount the third possibility altogether.
The current Chancellor has shown she is willing to intervene on the side of big business if the courts look to be causing issues. Notably earlier this year Reeves said she was considering passing a law to reverse the effect of any Supreme Court judgment if it found too much in favour of motorists ripped off over car finance. Ostensibly to protect the UK’s reputation for international investment and the future availability of motor finance. In the end the Supreme Court adopted a narrower approach and the law was unnecessary. But the fact it was even mentioned is concerning.
The business department under the last government responded to freeholder lobbying by trying to derail LAFRA. The same department is currently consulting on whether to reign in the UK’s only opt-out collective action mechanism on the grounds that it is burdensome to companies to have to face challenges from large groups of individuals for their wrong doing.
A campaign cleverly orchestrated by big business through a group called Fair Civil Justice, which also had plenty to say about motor finance.
It is not hard to imagine the freeholders running a similar campaign to the motor money lenders and making headway with the Treasury.
It goes something like this: we invest in the UK on the basis of legal certainty and you are scaring off investment in much needed housing by penalising us with LAFRA. And won’t someone please think about the pensioners? And once the freeholders have the Treasury on side the views of the housing ministry will count for nothing in the internal machinations of government.
We can perhaps discount that version. The value of ground rent grazing is merely a rounding error among wider pension fund investments. And even less in broader UK investments. If the pension industry cared about LAFRA it would have already intervened with the Treasury, and probably stopped it.
A lighter version may be that the freeholders use the threat of any appeal as leverage to wring concessions from the government. The strategy of using an appeal as a ransom piece has already worked once:
Annington Homes was originally a party to this judicial review. Annington held the freeholds to the Ministry of Defence Married Quarters Estate, a disastrous 1990’s PFI. Annington and the Ministry of Defence fell into dispute over the rent payable.
The government decided to start enfranchising the properties from under Annington. This led to a separate judicial review, which Annington lost and obtained permission to appeal. At the end of 2024 Annington abandoned its appeal and dropped out of this judicial review. In exchange the government bought back the Married Quarters Estate for £6 billion. So we should not discount the possibility of a deal.
That version goes something like this: the freeholders say to the government that if you set the rates used to calculate the price for a lease extension under LAFRA at levels more favourable to us than the current system then we will drop our appeal.
Other permutations, albeit ones requiring another Act of Parliament, are exemptions for charities, or grandfathering of leases with less than 80 years to run at the date the LAFRA was introduced to Parliament.
It would be a betrayal of leaseholders if any of that happened. Fiddling with LAFRA to placate freeholders undoes the promise of LAFRA to make lease extensions cheaper. The government now has well-reasoned cover from the High Court to make that a reality.
On the other hand the government can also move to further tip the table in its favour.
The High Court finds that LAFRA strikes an inherently fair balance even though it involves a huge transfer of wealth from freeholders to leaseholders. So there is nothing holding the government back from implementing the new system of fixed rates to reduce the price of lease extensions even before an appeal is heard.
The government could do so at rates better for leaseholders than under the current system. There is no good reason why the rates used to calculate the price payable are calculated in a way which currently produces rates barely above or actually below the yields on government debt. Ground rent grazing is not that safe a business, as this judgment shows.
On one view, implementing LAFRA may make it harder for the freeholders to win any appeal. If the government has implemented LAFRA in the meantime then it makes it harder for an appellate court to interfere because it involves taking rights off individuals that are already in place.
The downside is that once a scheme is implemented it may bolster the freeholders’ case because, unlike in the High Court, they will have actual numbers on which to base their arguments, as opposed to expert-led hypotheticals.
The bottom line
The freeholders’ business is rotten. It is exploitative. It brings misery to many leaseholders who find themselves paying all the bills with no control. And paying twice for the same flat when they come to extend their leases.
The laissez faire attitude of professional freeholders has also spawned ugly offspring in the form of poor quality and out of control managing agents, who inflict more misery in their turn.
Many of the freeholders’ shibboleths have been given short shrift in the High Court.
They have no divine right to marriage value.
Ground rent is money for nothing.
There is an inherent imbalance in the rights and interests of freeholders and leaseholders. Freeholders do not provide value by being noble long-term custodians.
It is now more than a hundred years since Lloyd George spoke at Limehouse and condemned the business of leasehold as nothing more than blackmail.
It is time the power and might of the state is put to the service of leaseholders by bringing LAFRA to life.
And once LAFRA is enacted we must move ahead with all the other reforms promised to make sure leaseholders are truly masters in and of their own homes.
The full ruling is here:
https://caselaw.nationalarchives.gov.uk/ewhc/admin/2025/2751
Related posts:
Freeholders on course for judicial review showdown against leasehold reforms in January
Your full guide to this week’s judicial review by freeholders to torpedo reform to leasehold
Leaseholders blocked from intervening against freeholders’ judicial review against reforms
Judicial Review Final Day: Both sides face a nervous wait, but freeholders have already won delay
Judicial Review Day 1: Bad start for freeholders but three days to go
Speak out in this government consultation by 26 September – because freeholders and their army of helpers will certainly do so
The Government should pass LAFRA regardless of any current or potential freeholder appeals in my opinion.
Yes.
Absolutely agree it has been a rip off and cash cow for freeholders and their agents. The Government must implement their actions now otherwise thousands of leaseholders will be left in total financial and emotional misery destroying leaseholder futures
Then the cladding scandal where leaseholders had no say with flammable cladding that experts prewarmed about using. This cladding was so say to improve energy conservation. So what happens now? Finally what about leaseholder human rights – congratulations for the Court’s decision and no appeal should be permitted where the facts of arriving to their decision is clearcut.
They shouldn’t be given leave to appeal as they are just time wasting. The judges had to wade through documentation since 2017 just to repeat what had already been said a thousand times about the right of a Government to change laws to correct injustice and which serves a Public Interest. They repeat “the wide margin of appreciation” ruling and use the 1986 judgement for their starting point when considering HR claims. The one Freeholders tried to say was out of date. The judges obviously wren’t so dumb as to swallow that. They leave valuation wide open to ministers to decide. And clearly state as do lots of judgments that they cannot expect a full market rate of return as compensation as that will not achieve the Public Interest reforms. And anyway times, markets, valuations and the legal environments change. That’s what they said. Nothing is set in stone.
And there is no need to allow them to set the agenda and time scale. That should be the message to the government. No more excuses.
Paragraph 161 is a perfect summary of their thinking and clear as light. Thank goodness!!
Simply put. We the public elect a government democratically. They pass laws. How could a government survive if every law they passed was allowed to be challenged by the likes of Freeholders…
If your pensions were partly funded by freeholds you wouldn’t be so nasty in your comments.
Not you no doubt but many of us are prepared to suffer a financial loss in the pursuit of justice and for what is good and right.
Oh, not the poor pensioners arguement.
All investments are risky. All are at the mercy of changes in law. And, as mentioned above, the proportion of pension investment in residential freeholds is not of significance.
My life is on hold, and has been for years waiting for these laws to be passed. I desperately need to move house to be closer to work but cannot. I, and millions of other leaseholders no doubt, will never vote for any political party who lets us down on this ever again.
Less than 0.5% of all pension investments are funded by residential freeholds / ground rents.
Gareth
Please see Simon Davies reply – they are, but it’s a drop in the ocean, so never fear…
Good try.
Summarised:
The High Court has delivered a devastating defeat to major freeholders—including Grosvenor, Cadogan, and several investment funds—who claimed the Leasehold and Freehold Reform Act 2024 (LAFRA) violated their human rights under Article 1, Protocol 1 of the European Convention. Their challenge targeted three key reforms: the abolition of marriage value, the cap on ground rents in lease extension calculations, and the removal of landlords’ ability to charge leaseholders legal costs. The judges comprehensively rejected all arguments, ruling that Parliament was entitled to reform leasehold law in favour of leaseholders and that the freeholders had always borne the risk that the law might change.
The court found that the claimants’ appeal to “market value” and wider valuation practices was misplaced, emphasising that when Parliament creates a statutory scheme of compensation, it can lawfully redefine how value is determined. The judgment reaffirmed that leasehold reform serves a clear social purpose, and that Parliament is free to prioritise leaseholders’ interests. The decision represents one of the strongest judicial repudiations yet of the ground rent business model, which the judgment characterises as exploitative and socially regressive.
Despite this decisive loss, freeholders are likely to appeal—either to the Court of Appeal or via a “leapfrog” route directly to the Supreme Court—mainly to delay implementation of LAFRA or use the process as leverage with government. However, their prospects of success are extremely low given the depth and clarity of the High Court’s reasoning. Even if appeals proceed, the government remains free to begin implementing the unchallenged parts of LAFRA, such as rules on insurance commissions and service charge protections.
Ultimately, the judgment signals a turning point: it confirms that Parliament has the right to rebalance property law toward leaseholders, stripping away unearned income streams from “parasitical” freehold interests. The piece concludes that this ruling should embolden the government to fully enact LAFRA and complete the broader programme of leasehold reform—so that leaseholders can finally be, in Lloyd George’s words, “masters in and of their own homes.”
I freeholders are serious about wanting market value for their freeholds then one answer is fairly simple.
Do a 1993 Act valuation.
If the lease is over 80 years then give freeholders 50% of the 1993 Act valuation figure.
If the lease is uunder 80 years then give freeholders 25% of the 1993 Act valuation figure (or we ignore marriage value and give the freeholders 50% of what is left).
They have gamed the system for years.
I cannot help but think that the time-frame from here is –
(1) Freeholders seek to appeal.
(2) Government thinks “there’s no point keep fighting these freeholders – we need to be more ambitious – COMMONHOLD!!!!!”
(3) 2026 to 2029 government repeats the 2016 to 2024 consultation.
(4) 2029 Reform win the general election and abandon leasehold reform because leasehold reform does not benefit anyone that they care about.
But of course that is just a cynical guess.
That’s a brilliant article and summing up of the current situation. Albeit a little complicated for some of exploited very elderly in Retirement Complexes to follow.
Obviously there is a confliction between the Governments intention to abolish leasehold in this parliament and the possibility of repeated appeals by freeholders delaying this for many years.
I think the most likely scenario will be that some of the Freeholders will drag this out as long as possible in the hope that a new Government after the next General Election will be more favourable to them. So we would be back to square one.
It would be interesting to know what the policy of all the political party’s are on this.
Yes Leasehold is crippled us been in our
Bungalow for 9 years now service charges
Go up and up every year and maintenance
Is not done by the company’ just put it off till next year they say , our property is over 40 years old need lots doing on the estate.
So we need reform on our leasehold system 🤔
The presumption in law that has historically favoured freeholders/landlords is as out of kilter as the law once stood in favour of smokers.
It is incredible to think that once upon a time our restaurants, bars, trains, planes, buses… gave preferential treatment to smokers, to the detriment of everyone else. Leasehold is similarly imbalanced and toxic, and it’s time the pendulum swung.
Thanks for all your work, Liam and LKP.
I managed to sell my flat at a loss several years ago now, with full disclosure. I’ve gone down the property ladder and now live far away from everyone I know in a town I’d never even had time to visit prior. I had to move quickly and re-invest during a very stressful time during the pandemic. During that time, all the buy-to-let investors were swooping in buying all the properties in my lower end price range. I could not stand the mental pressure of leasehold and the scandal anymore. I had to get out by hook or crook. It had been like that even before the bill was passed, the appalling behaviour of the managing agents.
I know others are in far worse situations. I was ‘lucky’ in comparison. I just wanted a freehold property after that, something that wasn’t tied to criminal behaviour of freeholders, after the nightmare of leasehold. I realised the law wasn’t on our side which dumbfounded me when it was they who had done wrong, and not just a few things but massive injustice, where people had died. I wanted nothing to do with it. I have lost trust in most of the systems now and the justice system as a result. I would never touch leasehold again without share of freehold and only within a smaller building perhaps, but still cannot fully trust it, and the lack of control of my own investment. It’s feels akin to gambling on the stock exchange the thought of doing it again, it would feel far too reckless. I’m mentally scarred very badly by it which crosses now into everyday life with all my other dealings and mistrust of almost everything now.
I’m now in a situation that where I live is damp and I also no longer trust RICS or the surveyor process. It’s all a scam. I have to find somewhere more suitable now in a lower price range, but there is nothing suitable for me left out there with 10,000 less than I had. The trauma has never left me from the whole debacle following, and learning about the terrible and avoidable Grenfell disaster, and the managing agent bullies and illegal practices which are ongoing in this country.
This crisis and the trauma still affects me to this day. I’m still unable to find an appropriate place to live in my price range that isn’t either damp or a leasehold scam. What hope is their for anyone who is just trying to live in a home that isn’t dangerous / unhealthy / involve bullies and scammers rinsing you for every last ounce. Who wants to live in a society like this. Who can?
My brother has finally saved up enough money to buy his first place in his 50’s. He’s looking at leasehold. I warned him off it, but the problem is there’s little else in that price range and they know it. They keep putting leasehold or shared ownership on everything in this price range, especially retirement places too. and then there’s caravan parks etc you can’t even live in one of those without being rinsed and taken advantage of. I’m at a loss what to do. I might just have to become a landlord myself and rent out my house now, try and sort the damp to a standard that might be as acceptable as it appears to be for every other landlord in this country. I want to make it better to be better and provide what should be provided for all. I have little choice left to buy again where I want to live, back to be near family and friends, so becoming a landlord myself might be the only way for me now.
.
I’m not sure I’d be able to sell and afford anywhere again now that’s right for me because there aren’t many places for single people out there that aren’t ready to fleece you in the process (mainly flats only or terraced houses requiring work). No small bungalows at the right price for those of us who need one level which is where flats were helpful.
A lot of these landlords are now selling these flats off most likely due to leases running out (and new laws being passed). Many of the freehold houses are left in sorry and uncared for states because they were previously rented out. Most with damp issues, also due to dodgy cowboy companies setting up business to fleece people when govt schemes are introduced. Unregulated and open to misuse. It seems unless you’ve got at least £200,000 in this country you’re not going to get anything above substandard anymore.
Seems the law is more in my favour as a landlord. Maybe I’ll just rent it out, or live in a van, who knows. Not like we can buy land and put a caravan on it. Not much choice out there for any of us at this level. It used to be an exciting thing being able to own your own property but that joy is lost because the choice out there is dire.
Shameful state of affairs for a country that just wants the economy to keep going, for people to live in damp homes, go to work with poor health and be satisfied with it, not to mention the shoddy workmanship, lack of reputable builders and labourers, being fleeced and forced to live in unacceptable substandard ‘homes’. In ten years of buying, I’ve not yet found a place to live that is good for my health, where I can settle, feel like I belong, and thrive. Every one has afccetd my health to the point I’ve had to leave, get out.
Sums Britain up for me now. I’ve seen the reality of it all now. Profit over people in every sense of trying to live, let alone thrive. They’re building a horrible society.
Gary Stevenson is right that this is the big squeeze out and that prices will keep going up until it’s completely unaffordable to buy for many of us in several years time. If all we’ve got is leasehold in these price ranges for most at the lower end then we’re all stitched up. If i sell there’s nowhere affordable to buy again to be back living where I was before, not without putting a load of £ I don’t have into repairs for yet another property, to bring it to standard because let’s face it most housing stock is really old now and the new ones are mostly leasehold or shared ownership traps.
The amount I’ve had to spend on theproerty I’m in, despite getting a survey done, where many problems were left unidentified is astounding. I’m not really sure what the survey actually paid for, it was pretty useless and I ended up doing a lot of the research myself in the end! Also problems left over years because previously it was rented out and botch jobs were done. I didn’t have the time to do any more checks finding people in a place I didn’t know and having just gone through the cladding crisis unable to rent at the time again I was time short for a roof over. . I just wanted a house I could finally enjoy and look after, but years of landlordism makes sure it’s another money trap. Major issues left untreated because all they cared about was money. I just want a safe home to live in and care about. That’s the problem, there’s no encorugament of care anymore, just profit.
It’s not acceptable to expect people in this society to live and thrive in this awful system, how do they expect us to do that? .
Massive change is needed. Thanks for pushing.
I still have all my paperwork from my old flat, all the discrepancies and bad practice highlighted. I kept it for any class action. I joined the one you’re doing Liam. There was a serious data breach too by my managing agents. The list of shortcomings was endless. Claims that went nowhere despite hours of enegry and work trying , loss adjusters who never really existed or were out of reach….it’s an endless mess of paper trails. Purposely done as we know the gaming of the system. I’ll keep them for a bit longer but want to burn it all really, get it out of my life now.
Sorry for the long rant. I needed to type this out as still feels raw after 4 years. I just wanted to highlight from my point of view that this is the mess it leaves people in. This is the society they have created and these effects are long lasting and will affect other areas of society. They have knock-on effects on so many other aspects of life. I don’t think they really realise this when they pass these laws and make these decisions. That these are people lives they continue to ruin. I know they don’t care, that much is very clear, but what they’re creating will come back to bite them in some capacity eventually. I hope so because there is no justice yet, for anyone. That will be something at least. Accountability is a word this country fails to understand in the English language.
Thanks for reading, if you got this far!
Madeleine, I hear the frustration in your missive, and like your idea of getting a van to live in and rent your place out.
I’m in a similar boat, but live in an area where you can get a half-decent detached place for £200K, and I live on a beach.
I already have the campervan, and need to sell my place now, if the market isn’t too swamped.
Good luck.
there has been a big deskilling of house surveyors – especially. the younger ones. many are not chartered surveyors.
there are some great low value towns with cohesive communities. im thinking in particular Littlehampton.
I think u r wrong to blame landlords for the state of the house u bought – suspect it was at the bottom of the range and u get wot u pay for! it could just have easily been a botched owner occupier house.
Well stated Madeleine,
and well done summoning the tenacity and effort needed to describe your outrageous experiences. It couldn’t have been easy to recount such disgusting mistreatment.
On a purely humorous note, why don’t you become a land”lord”, rip yourself off ,
prosecute yourself in court, then profiteer from the process to fund your return to a freehold
English”mans” castle. .
. . . . . . . . . . . . . . . . . . . . . . . . . . .
Well stated Liam Spender,
A beautifully crafted article. And such “new to me” informative and colourful vocabulary.
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
ie:
Para Heading: THE LEASEHOLDERS LOST SO BADLY FOR THREE REASONS /
. . . . “The loss has evidently come as a blow to the freeholders. Years of confident predictions, and of smiling threats, of the courts siding with them and the taxpayer having to fork out billions in compensation … are dismissed with often LACERATING CRITICISM in the judgement.
The voices of the freeholder class and their enablers, the surveyors, the lawyers, the managing agents, the harder of thinking in the House of Lords have all fallen silent.
It seems not a one of the freeholders has put out even the usual MILQUETOAST statement of strongly disagreeing and considering options for appeal.
Perhaps their pomp is brought down to the grave. But freeholders have a preternatural ability to cling on.”
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
“Milquetoast” . . . some quiet lolling here.
“Lacerating criticism” . . . BRAVO !!
Regarding the capping of ground rents, the judgment notes that where a high ground rent reflects a correspondingly lower premium at purchase, the cap does not apply. This interpretation is likely to trigger extensive disputes and litigation. Inevitably, the higher the rent, the more likely it was factored into the purchase price. Many developers deliberately increased ground rents and subsequently sold the freehold interest, using this structure to lower the headline sale price and facilitate sales. In such cases, professional surveyors will face significant costs contesting valuations from opposing perspectives.
The original intention behind the cap was to eliminate abusive ground rent terms—particularly those doubling every 10 or 15 years. That objective could have been achieved more proportionately by restricting rent increases to the lower of the formula within the lease or the Retail Price Index (RPI). Such a measure would have ensured that most leaseholders pay the rent they originally agreed to, with adjustments only to maintain real value over time. Intervening in contracts where all parties were professionally represented, and where no manifest unfairness exists, raises legitimate concerns about the reliability and predictability of the UK’s legal framework.
Marriage value may prove less significant if the deferment rate proposed by Professor Tim Leunig, government advisor and economist, is adopted. His suggested rate of 3.5% would, in fact, increase the cost of lease extensions. However, with anticipated legal challenges on both the deferment and capitalisation rates, genuine clarity may well extend beyond the life of the current government.
A balanced solution may therefore be to introduce a pragmatic settlement: cap ground rents so that they cannot rise faster than inflation; adopt a deferment rate somewhat higher than 3.5%; and require some contribution, particularly in small-scale lease extension and enfranchisement cases, to prevent leaseholders solicitors having to deal with small freeholders who are trying to save costs. As I have long maintained, freeholders acquiring their interests post-1993 should bear their own costs, as the associated risks were already known. Such a settlement would unlock progress—leaseholders with moderately increasing ground rents would forgo a small legislative advantage, those with shorter leases would benefit from reduced marriage value, and, most importantly, all leaseholder would save thousands of pounds in legal fees.
Stephen
Over the last 15 years we have seen no evidence that higher ground rents are reflected in a lower premium. We know this argument was particularly put forward by retirement developers. Post the ground rent act banning ground rent on new build there seems little evidence of a correlation.
With historic developments it’s very much a mixed picture again with little evidence of a correlation between premium and rent. There is some argument that even if a premium discount was given 50 or 100 or 200 years ago that’s already been compensated by the rent and other incomes. The fact the leaseholder maintains the building for its entire life makes the idea that after 100 or 250 or 999 years it’s returned to the freeholder for free somewhat difficult to understand. The landlords discount in the premium – even if it existed has gone after 25 or 30 years?
Isn’t the position party A -the leaseholder- pays a premium (discounted or not) and through generations of leaseholders pays 100% of the cost to maintain and update a building for Xhundred years. Party B paid for the original development and land and then sold for a premium so gets the benefit of the premium+ground rent for Xhundred years and other incomes but has no costs for maintaining the building.
So why do the enfranchisement calculations say party B is entitled to the entire asset back for free at the end of the lease rather than just the ground. Should it not always have been at the end of a long lease party B still owns the ground but party A owns the building asset? Even if the original premium included a substantial discount party A will have paid to replace the original building asset many times over the Xhundred years in addition to paying the original premium..Why is party B entitled to what is in effect a 100% building windfall at the end of a lease?
An alternative argument on modern ground rents might be that since the 2000’s there had been a strong correlation between developers directors bonuses and the toxic ground rents created in many new build homes.
It might be argued this must all mean consumers have made economically irrational purchase decisions. The alternative view is that supply is constrained so consumers had no option. We even reached the point where developers could mandate the sale of houses as leasehold on the same sites they were willing to sell as freehold for the same price – when it got near to the end of their financial year
Martin,
Your observation about “developers director bonuses and the toxic ground rents created in many new build homes” reminds me of the London (Reuters) article by Costas Pitas published on 7 November 2018 in which he writes ” The boss of Britains second-biggest housebuilder Persimmon (PSN.L) is to leave after the company said criticism of his $100 million (75.95 million pounds) bonus package was a continuing distraction that had hit its reputation. Jeff Fairburn was the highest paid FTSE-100 chief executive in the financial year ending 2017, receiving 47.1 million pounds, more than 20 times his pay in 2016, largely due to a long term incentive plan dating back to 2012.”
I wonder what the long term incentive plan dating back to 2012 consisted of?
he developer grants you the right to occupy and use the building for, say, 125 years on land they own. Under the agreement, you are responsible for maintaining the building throughout the term, after which ownership reverts to the developer. The developer typically requires an upfront payment along with an annual rent.
If these terms are clearly defined, and both parties are legally represented throughout the negotiation process, any potential imbalance in the arrangement should be recognized and reflected in the premium paid — this is how a free market operates.
However, I agree that ground rents embedded in leases, particularly where developers knew that buyers would not fully understand the financial implications (such as 10- or 15-year doubling clauses), should be reformed.
Furthermore, had the net present value (NPV) of the ground rent been disclosed at the time the lease was granted, the issues associated with such onerous rent provisions would have been apparent before the leaseholder entered into the agreement.
I would reiterate that, had the net present value (NPV) of the ground rent been disclosed at the time the lease was granted, the issue of onerous or excessive rent provisions would have been identified before the leaseholder entered into the agreement. It may therefore be appropriate to require that the NPV of ground rents on existing leases be disclosed at the point of sale, ensuring greater transparency and informed decision-making.
Stephen,
I would like to draw your attention to Luc Bowie post from October 27, 2025 on this site. I consider the analysis of the recent judgement on LAFRA to be exceptionally thorough and insightful.
Personally, I view Leasehold & Freehold as an out dated form of property servitude, originally intended to exploit Leaseholders throughout the duration of their Lease and, in my opinion, should be abolished as soon as possible, and consigned to “history’s dust bin”
If Leasehold & Freehold truly represents the ideal way to hold property, as some suggest, why is it that only England and Wales continue to use this medieval archaic system of tenure in the entire world?
The answer might be that this form of tenure provides vast sums of cash in return for nothing. Freeholders, Property Managing Agents and others have, in many cases made a fortune out of the misery of Leaseholders for decades and longer in my opinion.
A developer structures a package comprising both a premium and a ground rent. It raises the question of why the ground rent component is often regarded as unfair, even though it is clearly set out and disclosed. By contrast, the premium itself is rarely challenged, despite the fact that it is calculated based on estimates of past costs and overheads the developer may have incurred, together with projections of the profit they might reasonably have expected. This highlights the inherent absurdity of concluding that the developer has taken “too much” and that the full ground rent is therefore unnecessary. Such reasoning effectively criticises legitimate commercial decisions based on hypothetical reconstructions of historical expenditure and anticipated returns, rather than any demonstrable unfairness to the purchaser.
https://www.leaseholdknowledge.com/communities-select-committee-lifts-the-lid-on-the-residential-freehold-racket/
Stephen, this is precisely what developers don’t do, as was clear from the Select Committee in November 2018.
They sell properties for whatever they can get for them, irrespective of tenure, and are markedly ignorant of the fag-packet calculations chartered surveyors (and even less exalted help-meets) in the grubby leasehold sector – like you, in fact – have obligingly invented for their freeholder clients.
Here are some highlights:
How much should the freehold of a house cost?
Jason Honeyman [Bellway]: “If you were to come into a home in Newcastle, say, and you
wanted to buy a home of around 1,000 square feet, you could buy that at £196,000 on a leasehold basis. If you wanted to acquire the freehold it would cost you around £200,000. That is the sort of difference.”
David Jenkinson [Persimmon]: “We looked at the price at the time, increased the price of the freehold units by about £2,000 to £3,000 per unit, and did not sell any more leasehold ones on that site.”
In fact, at Harrow View West Persimmon has been selling houses freehold for £50,000 less than the leasehold houses that were sold before this gig turned sour.
…
Developers selling on freeholds to speculators rather than offering them to their own customers was described as a “scandal”.
Bob Blackman MP: “Why is it, then, that your company [Bellway] has this policy where you sell it [the freehold to a house] off to a third party and not offer it to the individual leaseholders at the time you are offering the sale?”
Jason Honeyman, CEO Bellway: “It is how we have always operated as a business. I am sure that is not the answer you want.”
Bob Blackman: “I am asking why your customers do not get the chance to exercise the opportunity to buy their freehold. You are selling the freehold out from under them without their knowledge.”
Jason Honeyman: “Yes, we are.”
Bob Blackman: “I would regard that as being, quite frankly, a scandal. You are not offering the opportunity for people to buy the property in which they live and have invested a large amount of money.
“They are suddenly told it is going to be managed by a new freeholder, without having that opportunity. My personal view is that your company should review what you do in terms of business practice.”
A financial package is offered, and the buyer considers it with professional advice before signing the lease. Years or even decades later, that buyer—or a subsequent purchaser—may claim that they paid too much and seek a refund. However, such claims rarely provide any supporting calculations demonstrating that the developer received an excessive amount, nor do they advance a legal argument explaining why the contract should be set aside in the first place.
It is acknowledged that leases with 10- or 15-year “doublers” are an exception, as the vendor was aware that many purchasers might not fully appreciate the long-term financial implications of these provisions.
Outside of these 10- or 15-year doublers, very few leaseholders have experienced rent increases exceeding inflation since entering into their contracts. In most cases, the rent amount to less than £1 per day. The primary issue requiring attention is not the quantum of the ground rent, but the effective management and governance of the maintenance of the buildings.
Thanks to Liam for this extensive summation, i think i understood 95% of it! As someone with a sub 50 year lease this is an exciting development and potentially decisive. I realise there may be a few battles ahead but it feels like we’re pedalling downhill now.
Professor Tim Leunig, an economist and government advisor, proposed a 3.5% deferment Rate – if this is accepted this will cancel out almost all the savings in marriage value – the setting of the deferment rate is the key one for those with short leases
He did not propose that rate he postulated it as an option. We first talked to Tim in 2016. He was quite rude about the fact the various rates are all made up numbers
Stephen,
Great commonsense comments – well done!
Please call me on 07838 573256 whenever convenient.
Thanks….Martin
Is this so-called “Comments” section censored where posts do not reflect LKP’s expropriatory, marxist ideas?
Mr Ward,
As a proud Veteran of the Parachute Regiment and a dedicated Royalist, I appreciate the opportunity to contribute my thoughts to this site. While I recognise that some of my previous comments may have been regarded as controversial, I understand that, to the best of my knowledge, the comments section is not subject to censorship. I hope this information may prove helpful.
Hear, hear! So this Friday (14th) is the last of the two appeal deadline dates.
Have they appealed yet?