Hands loses legal battle over military homes worth £8bn

THE property firm owned by Guy Hands, the private equity tycoon, has failed to block the Government from unwinding a multibillion-pound property deal over military houses.

Annington Property, which is managed by Hands’ private equity firm Terra Firma, brought legal action against the Ministry of Defence over its plans to take back ownership of thousands of homes for military families.

The MOD sold a portfolio of military residential housing for £1.7bn to Annington in 1996. The estate, which contained around 55,000 homes, is now valued at around £8bn.

The Government has since sought to repurchase a small number of these properties, with plans to potentially bring the whole portfolio into public hands. The MOD has argued that buying back the estate – known as enfranchisement – would create better value for money for taxpayers.

However, Annington launched a judicial review against the Ministry of Defence, arguing that Ben Wallace, the Defence Secretary, acted unlawfully by attempting to force the sale.

The High Court rejected Annington’s judicial review yesterday. Mr Justice Holgate said: “The arrangements were and still remain a bad deal for the MOD, its (service family accommodation) estate and the public purse.”

The High Court also found that Mr Wallace was allowed to backtrack a deal with Annington, under which the MOD leased the properties for 200 years.

An Annington spokesman said the ruling risks “setting a dangerous precedent” that the Government can disregard long-term contracts if it believes doing so is in its interests. It will appeal against the decision.

A spokesman for the MOD said: “No decision has been taken on further enfranchisement cases, but we will consider the High Court’s decision and the potential implications.”