A group of landowners is beginning a judicial review in the High Court to challenge the government’s attempts to reform the freehold and leasehold system of property ownership. The landowners, including the Cadogan group and the Grosvenor Group, argue that the legislation brought in by the last Conservative government contravenes their human rights. They claim that the measures in the law passed in 2024 are contrary to their right to enjoy private property as enshrined in the European Convention of Human Rights.
Leaseholders are concerned that the hearing will hold up reforms and complain that their voices are not represented in court. There are an estimated 4.5 million owners of leasehold properties in England and Wales, and many are affected by the current system. Phil Jones, a leaseholder, recently found out that his ground rent doubles every 10 years and is now at £500 per year. He says this makes his flat unsellable because mortgage companies will not lend on a property with a doubling ground rent clause in its lease.
The legislation at the centre of the case was introduced when former Conservative minister Michael Gove was housing secretary. The Labour government has promised to go further and abolish leasehold altogether by the end of the Parliament, bringing in a commonhold model and regulating ground rents. However, it still hasn’t implemented all of the laws in the Leasehold and Freehold Reform Act and says a new bill will be introduced later this year.
The government has been cautious about setting out hard deadlines while the legal challenge is pending. Leasehold groups are also angry that their application to speak on behalf of flat owners was not allowed to be part of the case. The CEO of John Lyon’s Charity, Dr Lynne Guyton, says that under new laws, millions of pounds would be redirected from a children’s charity to private wealth. The charity uses its revenue from property it owns to give grants to organisations that help underprivileged children and says changes to the laws will have “unintended consequences” that actually benefit wealthy leaseholder landlords.
The Deputy Prime Minister Angela Rayner told MPs that the government will be robustly defending the challenges and will await the court’s judgement. The government said it could not comment further on ongoing litigation. The leasehold system dates back to the Middle Ages, but the system as we know it came about in the 1920s. Both the previous Conservative and the current Labour governments have called it “feudal” and vowed to reform it, but campaigners say they’ve waited decades for change.
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