Guy Hands firm challenges MoD over controversial £8bn property estate

theguardian.com:

A property company controlled by private equity tycoon Guy Hands has started a court battle to block the reversal of the highly controversial privatisation of thousands of military homes now worth as much as £8bn.

Annington Property launched a judicial review on Monday in London’s high court, arguing that the Ministry of Defence does not have the right to take back ownership of the properties because the company has not consented and the state was exercising its power improperly. Annington is owned by Terra Firma, the private equity firm run by Hands.

The MoD is seeking to take back control of eight properties in Bristol and Cranwell, Lincolnshire, at a court-appointed price using its rights as the properties’ freeholder. If successful in the test case, the MoD will consider trying to take back control of the entire estate bought by Annington.

In 1996 the Conservative government sold 57,400 houses used by military service men and women and their families to Annington Homes for £1.7bn in a sale and leaseback deal. Under the deal the MoD paid rent and agreed to maintain the properties. Annington became the UK’s biggest residential property owner, and became entitled to annual rent now worth £178m.

However, the sale is widely regarded as a mistake. The value of British housing has soared since the deal was completed, and the Annington estate is valued at as much as £8bn.

In 2018 a cross-party group of MPs on the public accounts committee described the sell-off as “disastrous for taxpayers, offering no protection against the private sector making excessive gains at the taxpayer’s expense”. The government missed out on as much as £4.2bn in asset price increases, the MPs said.

Annington acknowledges that its ownership is a “valuable