Thousands of military homes are being brought back under public ownership in a £6bn deal.
The Ministry of Defence is buying back 36,347 homes from Annington, a property firm, effectively reversing the 1996 privatisation. According to ministers, the deal will eliminate the annual £230m rental cost for the homes. Defence Secretary John Healey stated that the 1996 privatisation was a “fire sale” and a “dreadful deal” and that “Today ends one of the worst-ever government deals,”.
He noted that issues with military accommodations won’t be resolved immediately, but this is a significant step forward. He added: “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.”
“Our armed forces and their families make extraordinary sacrifices: theirs is the ultimate public service. It is shameful that in the lead up to Christmas, too many military families will be living with damp, mould and sub-standard homes – issues which have built up over the past decade.”
“We are determined to turn this around and renew the nation’s contract with those who serve. These important savings to the defence budget will help fix the deep-set problems we inherited.”
The service family estate sold in 1996, which is now valued at £10.1bn when not subject to leases, is being purchased for £5,994,500,000.
The process of taking the homes back into public ownership began under the Conservatives, with the MoD winning a legal battle in 2023 to take some of the properties back.
Under arrangements with Addington, rentals were pegged below market rates while the state shouldered maintenance bills – upgrades, though, threatened rent hikes.
Despite most homes dating from the 1950s and 60s, the Annington agreement effectively barred the MoD from bulldozing them to pave the way for fresher builds.
The MoD said the previous deal left the taxpayer nearly £8bn worse off, with £4.3bn in rental payments and vacant properties worth around £5.2bn handed back to Annington, partially offset by the £1.7bn income generated in 1996 as part of the original deal.
Thanks to the updated deal eliminating lease liabilities, fiscal stress on net financial debt remains capped at £1.7bn – despite the almost £6bn investment. Treasury Chief Sec Darren Jones declared: “This is a landmark deal that will start saving the taxpayer money immediately, all while driving forward our mission to create growth across the country.”
“Not only does it open the door to major development and improvements across the military housing estate, but most important of all, it will help us on our mission to build more houses and deliver our service personnel the homes they deserve.”
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