MOD and Annington Homes reach settlement following a major piece of long-running litigation

A major piece of long-running litigation came to an end on 17 December 2024, with the announcement that Annington Homes will sell approximately 36,000 properties housing armed forces personnel and their families back to the Ministry of Defence for £6bn.

This comes 30 years after a privatisation deal, involving a sale of the married quarters estate to Annington and leaseback to the MOD. The deal has been widely criticised, with the National Audit Office estimating in 2018 that the taxpayer was £2.2bn – £4.2bn worse off over the first 21 years of the arrangements than if it had retained the estate. In 2019 the Public Accounts Committee called it “disastrous”.

Under the terms of the leases held by MOD, rent reviews were due on dates between 2021 and 2024. In 2019, Annington and MOD agreed to streamline the rent review process and submit it to arbitration. Joanne Wicks KC and Daniel Petrides were part of the Counsel team, instructed by Gowling WLG (UK) LLP, acting on the arbitration for MOD. This was concluded by a settlement in January 2022.

Immediately after the settlement of the rent review arbitrations, MOD sought to explore its ability to acquire the freehold of houses on the estate under the Leasehold Reform Act 1967 by serving a series of test case notices. Annington challenged MOD’s ability to enfranchise as a matter of private law and sought judicial review of its decision to serve the notices. Joanne and Daniel, instructed by Forsters LLP, again acted as part of the Counsel team for MOD. On 15 May 2023, Holgate J handed down judgment in favour of MOD, holding that it was entitled to seek to enfranchise the houses on the estate and dismissing the judicial review. A hearing of Annington’s appeal, listed for July 2024, was adjourned to allow the parties to explore settlement discussions.