Back in October 2025, the High Court firmly dismissed major UK freeholders’ arguments that certain reforms in the Leasehold and Freehold Reform Act 2024 breached their property rights under Article 1 Protocol 1 (A1P1) ECHR in Arc Time Freehold Income Authorised Fund & others v Secretary of State for Housing, Communities and Local Government [2025] EWHC 2751 (Admin).

The High Court concluded that the Leasehold and Freehold Reform Act 2024 (LAFRA 2024) reforms pursued a legitimate social policy objective by seeking to make enfranchisement cheaper and easier for leaseholders, and this fell within the broad margin of appreciation afforded to Parliament in the context of housing reform and economic policy.

Representatives for the major estate holders had confirmed last year they would be appealing the dismissal.

The Court of Appeal has now reportedly granted the freeholders permission to appeal on all grounds.

Permission to appeal

Among the appellant claimant groups are parties associated with some of the UK’s largest freeholders:

• ARC Time / PGIM-related funds;
• Cadogan and Grosvenor Estates;
• Portal Trust;
• Albanwise Wallace Group; and
• Long Harbour-linked entities.

Other claimants are reported not to be continuing with the appeal.

What is being challenged?

The litigation concerns some of the LAFRA 2024’s most commercially significant reforms to enfranchisement in particular valuation.

These include:

• the proposed abolition of marriage value;
• changes to valuation assumptions; and
• provisions requiring certain onerous ground rent terms to be disregarded when calculating premiums payable for lease extensions and freehold acquisition claims.

The claimants argue that these measures unlawfully interfere with A1P1 which protects ‘the peaceful enjoyment of his possessions’.

Does this stop implementation of the Act?

No.

Permission to appeal does not suspend the operation of provisions already in force, nor does it prevent the Government from continuing to progress the wider leasehold reforms.

However, the appeal is likely to increase uncertainty around the timing of implementation of some of the valuation-related provisions of the 2024 Act which have not yet been commenced.

The Government may choose to proceed cautiously pending the outcome of the appeal, particularly where secondary legislation and valuation regulations are still required.

This is demonstrated by its statement in connection with the King’s Speech around timing for implementing the remainder of LAFRA 2024; this now to be after the Commonhold and Leasehold Reform Bill receives Royal Assent.  It has not yet been introduced to Parliament.

Leaseholders must weigh the risk of waiting further...

As a result, it is possible we may see a number of leaseholders who had been holding off commencing their claims run out of patience or faith that the changes will be made.

Those with leases that will fall beneath 80 years remaining during that time will not want to risk a large increase in the premium payable (marriage value) for the hope of a premium saving that might prove to be small, saving on landlord’s costs and a longer extension (which they can achieve via a later claim).

Those with leases that have already fallen beneath 80 years may fear the risk that they will have to pay more if they wait for two years only to find that this or another government does not implement the promised reforms.

They will no doubt feel aggrieved if they proceed now only to find they could have saved the marriage value if they had waited or wait and find the hoped for saving is replaced by additional cost.

It is a difficult decision.

Some of course may not have the luxury of waiting. 

Significance of the High Court decision

Although permission to appeal has been granted, the High Court judgment remains significant.

The Divisional Court strongly endorsed the principle that Parliament enjoys a wide discretion when legislating in the area of housing and socio-economic reform, stating:

“Parliament is best placed to form a view about what is in the public interest, and the court will respect Parliament's judgment on the public interest unless it is “manifestly without reasonable foundation” or outside the wide margin of appreciation which must be accorded to that judgment”.

Obtaining permission to appeal should therefore not be taken as indicating that the appeal is likely to succeed.

For the Court of Appeal to grant permission, it must consider that the appeal would:

• Have a real prospect of success; and
• Raise an important point of principle or practice; or
• There is some other compelling reason for the Court to hear it.

Although the request for appeal made it past this permission test, the High Court’s reasoning was generally viewed within the sector as robust and strongly deferential to Parliament’s policy choices.

What happens next?

At the time of writing:

• no Court of Appeal hearing date has been published;
• no procedural timetable has been made public; and
• a substantive appeal hearing is not expected immediately.

The hearing is anticipated to take place in late 2026 or early 2027, though this is just speculative for now.

We will continue to monitor the appeal and report further once a timetable or hearing date is published, or if the Government comments on the implications for implementation of the remaining provisions of the 2024 Act.