A new group of investors have come together to challenge leasehold reform, and fight for a share of the “billions” that will be lost as a result of the changes.

The coalition of investors, retirees, and freeholders, has launched a campaign called Justice for Property Rights, which is calling on the Government not to penalise their property interests.

It claims leasehold reforms could result in losses exceeding £30billion, based on a 2023 assessment by the Treasury of the impact of the Government’s leasehold reforms.

This is due to the loss of investor income from the changes to the reforms around leasehold extensions and capped ground rents.

To date, the coalition has at least 200 members.

Extinguishing rights

The group insists that it supports action to tackle genuinely unfair lease terms and backs efforts to make commonhold a workable alternative.

However, it warns that current proposals risk going further by “retrospectively reducing or extinguishing rights” attached to existing ground rent arrangements, without a clear commitment to fair compensation.

Justice for Property Rights argues that public debate has become overly focused on a “small number of large estates and institutional investors, obscuring the reality that many affected owners are private individuals with modest portfolios”.

It says this includes retires who rely on ground rent income as part of their pension, families who have invested in small freehold interests over many years, and resident-controlled freehold companies responsible for managing their own buildings.

It also includes people who have invested in insurance-backed pensions and savings products.

Collective action

The group is taking legal advice on bringing a collective action before the European Court of Human Rights.

It follows last week’s Court of Appeal decision granting permission to a consortium of major freeholders to challenge the Leasehold and Freehold Reform Act 2024.

The Government has every right to reform the system, but it should do so carefully, clearly and fairly, without making ordinary investors collateral damage.”

In a statement, the group said: “There is increasing alarm that populist policymaking risks eroding centuries-old protections for property rights and the rule of law.

“The Court of Appeal’s explicit reference to “proportionality” will be central to the case. Why should UK taxpayers bear potential liabilities of over £30billion, particularly where a substantial portion of these gains will flow to already affluent leaseholders in central London?

“This is about fairness and legal certainty. Leaseholders and freeholders, advised by lawyers and conveyancers with a duty of care, made long-term decisions based on the law as it existed. The Government has every right to reform the system, but it should do so carefully, clearly and fairly, without making ordinary investors collateral damage.”