The government has agreed a £6 billion deal to repurchase 36,000 homes in the armed forces estate, bringing them back into public ownership.
Under the agreement, The Ministry of Defence (MoD) will buy back 36,347 homes from property company Annington, for major redevelopment and improvements.
MoD sold the service family estate, representing 55,000 homes, to Annington in 1996, for around £27,000 per property (£1.7 billion generated for the taxpayer).
Annington is owned by private equity company Terra Firma Capital Partners, founded by financier Guy Hands.
The deal is part of the Government’s drive to boost military morale, tackle recruitment and retention challenges and renew the nation’s contract with those who serve.
Defence secretary John Healey described the repurchase as a “decisive break” with the failed approach of the past, to “enable the first steps to be taken to fix the long-term decline in housing for military families and deliver homes fit for heroes.”
MoD said the deal will bring an end to the taxpayer spending billions on rental payments for military housing while remaining liable for rising maintenance costs, which the government claimed has left them £7.8 billion worse off.
The new deal aims to see immediate savings of more than £600,000 of public money each day, with the current annual bill of £230 million in rent being eliminated.
The announcement comes as the government starts work on its new military housing strategy, to be published next year.
Key principles of the strategy will include: a generational renewal of Armed Forces accommodation and better use of MOD land to support the delivery of affordable homes.
This comes alongside a series of commitments to housebuilding and infrastructure over the past two weeks.
These include prime minister Keir Starmer’s pledge to decide on at least 150 new infrastructure projects and changes to the National Planning Policy Framework, to help deliver its 1.5 million homes pledge over the next five years.
Defence Secretary, John Healey MP, said: “This deal shows our government is determined to deliver homes fit for our heroes.
“This is a once in a generation opportunity, not only to fix the dire state of military housing but to help drive forward our economic growth mission, creating jobs and boosting British housebuilding.
“There is still a lot of work to do to deliver the homes our military families deserve, and these problems will not be fixed overnight.
“But this is a decisive break with the failed approach of the past and a major step forward on that journey.”
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