Defence Minister Mark Lancaster announced the move on Boxing Day as part of the Armed Forces Covenant, which the government enshrined in law as a promise from the nation that the Forces community is treated fairly.
Previously, members of the military who rented out their homes during deployment could have been required to change their residential mortgage to a buy-to-let mortgage, often incurring new charges and an increased rate of interest. Under the new agreement they will no longer have to do this, saving them both time and money.
Defence Minister Mark Lancaster said:
Our Armed Forces keep us safe and rightly we should be making sure they’re fully supported. This extension means our brave men and women will save time and money when they are fulfilling vital roles across the country and is another example of how the Covenant is making a real difference.
This commitment from the majority of the UK’s high street banks and building societies is an extension to the offer made back in January, which allowed service personnel posted overseas to rent out their homes at no extra cost.
The initiative is supported by 47 of the UK’s largest banks and building societies, including Barclays, HSBC and Nationwide, and the change will benefit almost 265,000 people in the UK and abroad.
British Bankers’ Association CEO Anthony Browne said:
Members of our Armed Forces work all over the world to look after us, so it’s only right that we look after them. The extra support provided by the main mortgage providers will make sure service personnel and their families are not disadvantaged when they are required to work away from home and want to rent out their house, and make their mortgages fairer.
The announcement comes shortly after the Covenant Annual Report, which highlighted achievements from the past 12 months and outlined targets for the coming year.
Over 9,000 personnel benefiting from the Forces Help to Buy scheme, to the sum of approximately £136 million.
86% of the UK’s motor insurance industry committing to waive cancellation fees and preserve no claims discounts for up to three years when personnel and their families are posted abroad.
A network of nearly 200 Armed Forces Covenant champions was introduced across Forces units to act as the focal point for their local community and to help deliver information about the Covenant directly to personnel and their families.