Billionaire Guy Hands’ property firm sells military homes to MoD for £6bn

Terra Firma’s sale of 36,000 properties ends legal fight with government over recent housing reforms

https://www.theguardian.com/media/2024/dec/17/guy-hands-property-military-homes-mod-terra-firma

Tue 17 Dec 2024

A property company linked to Guy Hands has agreed to sell 36,000 military homes to the UK’s Ministry of Defence for almost £6bn, signalling an end to a long-running battle between the billionaire and the government.

Annington will hand over its 999-year lease on the 36,347 homes, known as the Married Quarters Estate, to the MoD and receive £5.99bn in return – almost twice as much as Hands’ private equity company Terra Firma paid for Annington more than a decade ago, but less than the £8bn the homes were valued at last year.

The sale ends court proceedings brought by Annington over planned housing reforms. In September, the company took a legal fight with the UK government to the European court of human rights over fears it could lose significant sums as a result of the new Leasehold and Freehold Reform Act. It also launched a challenge in the high court on the same grounds.

In 1996, under the then defence secretary, Michael Portillo, the Conservative government sold 57,400 houses used by military service men and women and their families to Annington for £1.7bn – making the company the biggest residential property owner in England and Wales.

The MoD rented back the homes on a 200-year lease at a discount but also agreed to pay for their maintenance and refurbishment.

Annington refurbished and sold nearly 20,000 homes.

In 2012, Terra Firma bought Annington from the Japanese investment bank Nomura Holdings for £3.2bn. Hands, one of Britain’s highest-profile private equity investors, launched Terra Firma in 2002 and has since made more than £15bn in investments, including the record company EMI, Tilia Homes and Welcome Hotels.

In January 2022, the MoD said it was hoping to take back full ownership of the homes through enfranchisement rules under existing leasehold legislation.

The MoD said the deal brought back military housing into public hands and ended a “huge annual rental bill” to save about £230m a year.

John Healey, the defence secretary, said: “There is still a lot of work to do to deliver the homes our military families deserve, and these problems will not be fixed overnight. But this is a decisive break with the failed approach of the past and a major step forward on that journey.”

Ian Rylatt, the Annington chief executive, said the sale represented a new chapter for the estate and “ends a costly and distracting legal dispute, allowing everyone to move forward”.

Accommodation for service personnel and their families is “shocking”, as issues with damp and mould persist, according to a report from the Commons defence committee published last week.

It found that two-thirds of the homes for service families “need extensive refurbishment or rebuilding” along with a third of the homes rented by individuals. The family homes are part of the Annington portfolio, but the government is responsible for their maintenance.

Last year, the Defence Infrastructure Organisation, which is responsible for maintaining and servicing military accommodation, was given £400m to tackle mould, damp and other problems.

The report found that its contracts resulted in “poor contractor performance, poor quality of maintenance and repair work, and a poor lived experience for many serving personnel and their families”.

The MoD will transfer 159 homes worth £55m to Annington within 12 months as part of a pre-existing agreement.

Contracts were exchanged in relation to the £5.99bn sale on Monday and the deal is expected to close on 9 January. The sale proceeds will be used to pay down Annington’s debt, with another portion distributed to shareholders, including UK pension funds and sovereign wealth funds.

The firm, which has 1,600 other rental properties, also plans to reinvest in the UK property market.

 

MPs Why didn’t Treasury abolish business rollover relief, rather than put inheritance tax on farmers?

Jeremy Moody, secretary and adviser at Central Association for Agricultural Valuers, added that the tax changes would not discourage companies from snapping-up farmland, adding: “It is only individuals who die.”

Over half of farmers who gain from tax loophole have ‘no involvement in farming in any way’
https://www.mirror.co.uk/news/politics/over-half-farmers-who-gain-34294829

Hundreds of farmers in tractors descended on Westminster to protest, while MPs heard less than half of estates claiming agricultural relief made any income from farming in five years

Farmers in tractors staged another protest over the government’s inheritance tax changes – despite fresh claims large landowners are the big winners from current rules.

Hundreds descended on London, with go-slow demonstrations on dual carriageways in a number of other places. It marked a second day of action in the wake of Rachel Reeves’s Budget announcement that farms worth more than £1million will pay 20% inheritance tax from 2026.

Farmers called the change “another kick in the teeth”, while some backed cutting off food supplies in the new year as “wake up call”.

It came as MPs scrutinising the shake-up heard more than half those claiming a lucrative tax break to avoid death duties have “no involvement in farming in any way”.

The 20% inheritance tax rate – half that for everyone else – replaces two types of relief worth up to 100%.

Dr Arun Advani, director of Centre for the Analysis of Taxation, told the Environment, Food and Rural Affairs Committee: “Less than half of the estates who are claiming agricultural relief have any income from farming anywhere in the five years before death.”

About 44% of the claims are from people you would think of as farmers.”

The others, he said, are “a mix of people who own a house and some pony paddocks or who own land and let it out to a lot of people but are not involved in any farming in any way.”

The Mirror revealed this month how a quarter of all England’s farmland belongs to just 2,500 owners. The highly respected Institute for Fiscal Studies says those paying more tax under the changes would be heavily concentrated among large wealthy landowners.

But Dr Advani warned, at 20%, the inheritance tax rate still made it attractive for the wealthy to buy up agricultural land, pushing up prices for genuine smaller family farmers who want to work the land themselves.

Jeremy Moody, secretary and adviser at Central Association for Agricultural Valuers, added that the tax changes would not discourage companies from snapping-up farmland, adding: “It is only individuals who die.”Tom Bradshaw, president of the National Farmers’ Union, claimed Ms Reeves had refused to meet.