[Diggers350] Guy Hands makes £4.3bn profit selling married quarters back to MoD after 1996 Portillo-Major privatisation

[Tony Gosling]

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

https://tlio.org.uk/guy-hands-makes-4-3bn-profit-selling-married-quarters-back-to-mod-after-1996-portillo-major-privatisation/

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.