Jurisdiction(s):
United Kingdom

Divisional Court dismisses A1P1 challenge to LFRA 2024; upholds removal of marriage value, 0.1% ground rent cap and limits on landlords’ non-litigation costs (England and Wales)

Published on: 07 November 2025

Published by a LexisNexis Property expert

Legal News

Article summary

What was the background?

Six prominent landlords — ARC, Cadogan & Grosvenor, Abacus, Wallace, John Lyon’s Charity and Portal Trust — commenced judicial review proceedings, alleging that three elements of the LFRA 2024 infringe A1P1 of the European Convention on Human Rights. The dispute focused on leasehold enfranchisement: the statutory mechanism by which long leaseholders may purchase the freehold or extend their lease, devised to remedy the ‘wasting asset problem’, whereby leaseholds lose value as the term shortens despite tenants having paid sizeable premiums and ongoing maintenance charges. The impugned provisions were:

a ceiling on ground rent set at 0.1% of the freehold vacant possession value for the purposes of enfranchisement calculations;
the elimination of marriage value from enfranchisement premiums by proceeding on the basis that the tenant is not seeking to acquire the freehold; and
the removal of tenants’ responsibility for landlords’ non-litigation costs in enfranchisement claims.

It was agreed between the parties that these reforms would markedly reduce the amounts payable by tenants undertaking enfranchisement to their landlords. The court undertook a detailed examination of the legislative history beginning with the Leasehold...

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