Leasehold reform must not destroy the pensions and investments of ordinary families

Like many small business owners and pension investors across the UK, we believed we were doing the right thing, planning carefully for retirement, building long-term stability and creating a reliable income stream that would support us later in life.

Now, we risk seeing much of that wiped away overnight.

Around the year 2000, we were advised to establish a Small Self-Administered Pension Scheme (SSAS). As a family-run property business, we wanted greater control over our pension investments and the ability to make sensible, long-term decisions based on sectors we understood well. We chose to invest in freehold ground rents because they offered stable returns, long-term security and the potential for additional value through lease extensions over time.

For years, those investments did exactly what they were supposed to do. They provided steady income and formed an important part of our retirement planning.

But successive governments have continually changed the rules surrounding pension investments and leasehold property. First, the government decided that freehold ground rents were no longer appropriate investments for SSAS schemes, despite many investors having purchased them entirely lawfully and based on professional advice at the time.

Now, the Government’s proposed leasehold reforms threaten to devalue those same assets even further through the abolition or capping of ground rents and changes to lease extension valuations, including the removal of marriage value.

For investors like me, this is not an abstract political debate. It is a direct hit on our retirement security and financial future.

The public narrative around leasehold reform often portrays all freeholders as wealthy institutions or faceless corporate landlords. The reality is very different. Many freeholds are owned by ordinary individuals - retirees, family businesses, resident-owned companies and small investors who have spent decades building legitimate investments under the rules that existed at the time.

Groups such as Justice for Property Rights have rightly highlighted that reform must distinguish between genuinely abusive practices and long-standing lawful arrangements. Most people agree that where unfairness exists, it should be addressed. Escalating ground rents and exploitative terms needed reform, and in many cases those issues have already been corrected through earlier regulatory intervention.

What concerns many of us now is the move towards blanket reforms that fail to recognise the difference between abuse and legitimate investment.

There also appears to be very little discussion about the unintended consequences these changes could create. Policies that dramatically reduce the value of freeholds and lease extensions will not simply affect large institutional investors. They will remove income streams from pensioners and small UK-based investors while potentially delivering substantial financial windfalls to wealthy leaseholders, including overseas investors with high-value properties.

At the heart of this issue is a simple question of fairness and legal certainty.

Thousands of people invested in these assets lawfully, based on contractual agreements and a legal framework established by government itself. Yet there is still no clear explanation from ministers about how those facing losses will be compensated, or even what “fair value” means in practice.

That uncertainty is deeply damaging. It undermines confidence not only in property rights, but in the principle that people should be able to plan for retirement and invest for the long term without fear that the rules will suddenly change decades later.

My family invested in ground rents because we believed they would provide security and independence in later life. We worked hard, followed the law and made decisions based on the information and guidance available at the time.

Now we face potentially life-changing losses through retrospective reforms that fail to account for people like us.

Leasehold reform should absolutely tackle unfair practices. But it must also respect lawful contracts, protect small investors and pensioners, and ensure that reform is balanced, proportionate and economically sensible.

Reform what is unfair - but do not punish ordinary families who invested in good faith

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Jonathan Hooker, Justice for Property Rights

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