Annington gives MoD two weeks to avert legal action over buyback plan

Annington Homes has given the Ministry of Defence two weeks to avert legal action in response to a move by the department to buy back tens of thousands of military properties. Annington, a portfolio of 57,400 homes used by military servicemen and women, was sold off in a sale and leaseback deal by the MoD in 1996 for £1.7bn to Nomura, in one of the government’s biggest ever privatisations. The portfolio is now owned by billionaire Guy Hands’s private equity firm Terra Firma, which bought it from the Japanese bank in 2012 for £3.2bn. Hands also worked for Nomura in 1996, and was involved in the initial purchase. The government, which still has leasehold and maintenance agreements on about 38,000 homes, is seeking to wrest back ownership of the properties via its investment vehicle UK Government Investments. Last week, defence procurement minister Jeremy Quin (pictured) said the government would explore whether leasehold enfranchisement deals, designed for individual tenants to buy properties from their landlords, could be used to buy back the homes. In a letter to Quin and defence secretary Ben Wallace, Annington chair Baroness Liddell said she was “genuinely shocked” by the government’s approach. She said the government was “seeking without notice to tear up a long-standing agreement, which sends a dreadful signal to businesses which rely upon the good word and good faith of government”. She wrote that the MoD was serving the company enfranchisement notices on two houses in Cranwell, Lincolnshire, then forcing the sale of both properties to newly formed company Defence Infrastructure Holdings for £1. Liddell also criticised the state of the properties as “unacceptable” for military personnel. The government maintains the properties as part of the original sale agreement. As a proposed solution, she said Annington would offer a £105m fund to improve and modernise the homes. However, she added, if the parties do not reach agreement in the next two weeks the company will launch a litigation process and the cash would instead be used for legal costs. To send feedback, e-mail alex.daniel@eg.co.uk or tweet @alexmdaniel or @EGPropertyNews Photo: Story Picture Agency/Shutterstock