Case comment: R (ARC Time Freehold Income Authorised Fund and others) v Secretary of State for Housing, Communities and Local Government (The Speaker of The House of Commons) [2025] EWHC 2751 (Admin)

High Court Ruling Confirms Legitimacy of Leasehold Reform Act 2024

The High Court has upheld the UK Government’s landmark leasehold reforms, rejecting a major legal challenge brought by large institutional landlords—including pension funds, charities, and historic estates—against key provisions of the Leasehold and Freehold Reform Act 2024.

The claimants argued that reforms capping ground rents, abolishing marriage value, and removing landlords’ rights to recover non-litigation costs were incompatible with their property rights under the European Convention on Human Rights (A1P1). The court disagreed.

Court’s Reasoning: Balancing Property Rights and Leaseholder Fairness

In a detailed judgment, the Court found:

• The reforms pursue legitimate aims: addressing the unfairness of leasehold as a “wasting asset” and rebalancing power between landlords and leaseholders.
• The measures strike a fair and proportionate balance, even if they reduce landlord income.
• Parliament acted within its wide margin of appreciation in enacting the reforms.

Charities and Exemptions

The claimants included leading charities such as John Lyon’s Charity and the Portal Trust, who argued that abolishing marriage value would significantly reduce their income and restrict their ability to fund vital community projects.

While the Court acknowledged the “appreciable effect” on grant-making capacity, it upheld the Government’s decision not to exempt charities. The rationale was that charities, like other landlords, invest for financial return, and leaseholders face the same systemic issues regardless of who owns the freehold.

Notably, exemptions were granted to community-led housing and the National Trust, but not to charities. Parliamentary attempts to introduce carve-outs for charitable landlords were ultimately withdrawn. The judgment reinforces a consistent policy stance: tenant rights should not vary based on landlord identity, even if that impacts charitable funding.

Next Steps: Awaiting Valuation Metrics Before Full Implementation

Whilst the reforms could not be brought into force until (amongst other things) deferment and capitalisation values required for carrying out valuations have been set by further legislation, this ruling clears the way for the Government to implement the most significant leasehold changes in decades, making it cheaper and easier for leaseholders to buy their freehold or extend their lease.

Lester Aldridge’s real estate solicitors have been at the forefront of leasehold reform for over two decades. Our solicitors regularly advise institutional landlords, leaseholders, and developers on the implications of legislative changes, including the Leasehold Reform Act 2024.