Annington Homes, the property company owned by Guy Hands' private equity firm Terra Firma, has been granted permission to appeal a dispute over the Ministry of Defence’s attempt to reclaim a controversial £8 billion portfolio of of thousands of military homes.
In 1996, the year before John Major's Tory government lost a landslide election to Tony Blair's New Labour, defence secretary Michael Portillo agreed a £1.7 billion sale of 55,000 houses used by military families to Annington in a sale-and-leaseback deal with a 200-year lease.
Under the deal, Annington, which became the UK’s biggest residential property owner, would be paid rent by the MoD, which also agreed to maintain the properties.
Terra Firma bought Annington from Nomura for £3.2 billion in 2012.
The MoD launched an attempt to take back the homes last year, after the National Audit Office calculated that the government was potenitally up to £4.2 billion worse off than it would have been if it had retained the property portfolio, even though it had fallen badly into disrepair.
In February this year, Hand's company launched a judicial review in London’s high court, arguing the MoD does not have the right to take back ownership.