Healey pledges MOD will work quickly to fix issues following homes buyback
The Defence Secretary says the decision to buy back thousands of military homes will not fix accommodation problems overnight, but the MOD will work fast to address the wide range of issues.
John Healey told BFBS Forces News that the £6bn deal would offer value for money for taxpayers and that in the new year plans for new forces homeownership opportunities would be announced.
From 9 January, Armed Forces housing will be put back into public ownership with the Ministry of Defence set to buy back 36,347 homes from property firm Annington Homes Ltd, reversing its original 1996 deal to sell them.
The 1996 sale saw 55,000 houses sold for an average of just £27,000 for each property.
Mr Healey said: "One of the worst features of what is probably one of the worst ever privatisations, was that not only did we have to pay over £200m a year just to rent the homes back, that's more than £600,000 a day, money that we could not be spending on upgrading homes.
"We had to give back hundreds of those homes every year, we had to make them good before we gave them back, so we broke free of that bad deal."
He says they will be making major redevelopment and improvements.
'Major step forward'
Mr Healey said problems with military accommodation would not be fixed overnight, but added: "This is a decisive break with the failed approach of the past and a major step forward on that journey.
"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."
'Foundations for putting things right'
The repurchasing, which will mean the end of the £230m annual rental cost of the homes, has largely been welcomed.
The Army Families Federation said it was "excited" about the potential of the announcement.
"The need to do something differently to improve the quality of and access to military housing has been clear for some time, and this is a key step in freeing up the scale of resources needed to make this happen," the organisation said.
"Given the size of opportunity that this deal represents, we recognise that this will not be an immediate fix for our families and inevitably, it will take some time before we see improvements to military housing at scale."
Tan Dhesi, chair of the Defence Select Committee which recently published a report that said two-thirds of Service Family Accommodation is "shocking", backed the move.
"This is the right decision, despite the cost," the Labour MP said.
"Buying back this housing is by no means the whole of the solution, but it provides the foundations for putting things right," he added.
Shadow defence secretary James Cartlidge MP, who was a defence minister until earlier this year, also supported the decision, describing it as "hugely significant".
"Although the current Government concluded the negotiations, I set them in motion and put in a huge amount of work – with the strong support of DIO and MOD officials – to get the Treasury on board, and make this possible.
"With ownership, the MOD now has the levers to deliver a fundamental rebuild.
"Of course, that will take time, but I am certain this was the necessary first step to open up what could be one of the most significant regeneration projects in our country's recent history."
Liberal Democrats defence spokesperson Helen Maguire MP said she hopes the announcement is "the start of a much better, fair deal for Armed Forces personnel and their families".
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 back some of the properties.
The arrangement with Annington Homes meant homes were rented at a discount of the market rate but the taxpayer was responsible for maintenance costs – and improvements could potentially push up rents.
Despite most of the properties dating from the 1950s and 1960s, officials say the previous deal had prevented the MOD from being able to demolish them to build newer accommodation.
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 Homes, partially offset by the £1.7bn income generated in 1996 as part of the original deal.
Because the deal eliminates the liabilities associated with the leases, the impact on net financial debt will be limited to £1.7bn despite the nearly £6bn outlay.
Chief Secretary to the Treasury Darren Jones said: "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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