Military families are being helped by homeownership schemes.
Every day a military family is helped to take a step up the housing ladder thanks to the government’s homeownership schemes, Housing Minister Kris Hopkins said today (14 October 2013).
New figures released today reveal that, over the last 2 years, more than 780 military households have either bought or reserved a new home through FirstBuy and its successor Help to Buy: equity loan; initiatives that help people purchase a new build home with a fraction of the deposit normally required.
Both schemes provide an equity loan worth up to 20% of the value of a new build property, interest free for the first 5 years, so a home can be bought with a 5% deposit.
Military first time buyers made the top priority
Mr Hopkins, a former soldier who served in the Duke of Wellington’s Regiment, said he was proud that the government had pushed military families to the front of the queue for assistance to purchase homes.
He said too often members of the armed forces had been denied the dream of buying a home because their job makes it difficult to get a mortgage.
In 2011, when FirstBuy was launched, ministers ensured military families were made the top priority and given extra help so they could be the first to benefit.
Government-backed housing agents were dispatched to military barracks and bases, both in the UK and overseas, to raise awareness and help members of the armed forces purchase homes through the scheme.
Within weeks Terry Ferguson, a military policeman, and his wife Kerry, were the first members of the armed forces to benefit. They bought a 4-bedroom house in Donnington, near Telford, close to Mr Ferguson’s base and his children’s school.
Help extended to existing homeowners
In March this year FirstBuy was replaced with the Help to Buy: equity loan, ensuring military personnel who are existing homeowners, but struggling to raise a large enough deposit to purchase their next property, can also benefit.
Hundreds of military personnel, on average more than 7 households each week, have seized this opportunity and have bought homes through both schemes, with at least 3 quarters of those first time buyers.
Last month Defence Secretary Philip Hammond offered aspiring first time buyers in the military an additional option to purchase homes through Forces Help to Buy. The £200 million scheme will enable service men and women to borrow up to 50% of their salary, up to a maximum of £25,000, interest-free, to buy their first home.
In addition to these homeownership schemes, the government has also worked closely with credit agencies and Royal Mail to ensure that those living on a base or serving abroad are not disadvantaged when applying for a mortgage.
And new guidance, published for consultation last week, will ensure councils can make members of the armed forces a top priority category for social homes, and not be disadvantaged because of their work.
Housing Minister Kris Hopkins said:
Our military men and women make a commitment that is far beyond just coming to work and doing a job. And yet often the perverse consequence of this service to their country has been enormous difficulties when trying to put down roots and buy a home.
That’s why, from the outset, we ensured our troops were prioritised for homeownership schemes, and sent housing agents into military bases to help members of the armed forces with the process of buying a home.
I’m delighted that hundreds have seized this opportunity to buy and reserve new build homes with a fraction of the normal deposit. But there is still more to do, and I’d urge any military personnel who are interested in buying their own property to contact their local Help to Buy agent, and investigate the schemes on offer to see if they could benefit.
Help to Buy: equity loan, the first part of the government’s Help to Buy programme, has helped members of the armed forces buy new build homes up to a value of £600,000.
Last week the Prime Minister and Chancellor launched the second part of Help to Buy, the Mortgage Guarantee, which will also be available on existing properties up to a value of £600,000. Lenders will be able to offer a 95% loan-to-value mortgage, facilitated by a government guarantee to the lender of up to 15% of the value of the property.
There were 464 sales to members of the armed forces under FirstBuy. FirstBuy ended on 31 March 2013, though sales from reservations made before the end of March will continue to be accepted until December.
Since its launch on 1 April 2013 to 30 August 2013, there have been 322 reservations by members of the armed forces under Help to Buy: equity loan. These have not yet reached the point of completion, but we expect completions to happen in due course, once construction of the new build home is complete.
Home ownership is a significant issue for the armed forces, with ownership levels below those of wider society and departing personnel frequently indicating that their desire to own a home is a key reason for their decision to leave. Personnel often experience difficulty when accessing credit due to frequent moves and deployments and poor recognition of BFPO addresses by credit systems.
Forces Help to Buy, the new scheme announced by Defence Secretary Philip Hammond last month, will also address this disadvantage, offering Service personnel an interest free advance of 50% of salary (up to £25,000), which would be repayable over 10 years, ensuring repayments are affordable and do not impact on the individual’s borrowing power.
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