- Landmark deal for more than 36,000 houses formally completed.
- Significant housing redevelopment and improvements now possible.
- £600,000 of taxpayers’ money already being saved each day.
Contracts were exchanged between MOD and Annington in December and today’s formal completion sees taxpayers regaining ownership of 36,347 houses. This landmark deal has ended the £600,000 daily rental bill – totalling more than £230 million a year – and makes major housing redevelopment and improvements possible.
The estate is now valued at £10.1 billion when not subject to leases and is being purchased for just under £6 billion – providing excellent value for money to the taxpayer and representing one of the largest value commercial housing deals in UK history. The impact on net financial debt is confined to £1.7 billion.
The agreement frees up our ability to build on the Service Family Accommodation estate with more modern houses, helping reduce maintenance costs and, as part of work facilitated by the deal, programmes to build new houses are being accelerated.
Planning applications will be submitted in the coming days for 265 new houses and apartments at RAF Brize Norton, and further plans will be submitted in the Spring for around 300 new houses at Catterick Garrison.
National security is foundational to the Government’s Plan for Change. This deal will help to deliver on the Government’s milestones on kickstarting economic growth and boosting housebuilding across the country, and on our commitment to renew the nation’s contract with those who serve.
Defence Secretary, John Healey MP, said:
By reversing one of the worst Tory privatisations of the 1990s, we have opened up a once in a generation chance to improve homes for our armed forces and their families, who sacrifice so much to keep us safe.
This deal is already saving the taxpayer £600,000 a day – and will put us back in the driving seat as we renew and rebuild family accommodation. Our forthcoming military housing strategy will draw on leading independent experts to capitalise on these savings.
This Government is unrelenting in our commitment to renew the nation’s contract with those who serve.
Work on the new military housing strategy has begun, with plans for its publication later this year. Key principles of the strategy will include: a generational renewal of Armed Forces accommodation; new opportunities for forces homeownership; and better use of MOD land to support the delivery of affordable homes for families across Britain.
The first steps in the strategy will include the rapid development of an action plan to deliver on the “once in a generation” opportunities unlocked by this deal. This work will involve independent experts, forces families and cross-government input.
The original sale in 1996 did not strike an appropriate balance of risk and reward, and it is estimated the taxpayer is nearly £8 billion worse off as a result. Money which should have been better spent on maintaining and improving our service family homes.
Background
Eliminating the liabilities associated with the leases creates budgetary headroom to partially fund this purchase, meaning that the public expenditure impact of this measure, and the impact on net financial debt, is confined to £1.7 billion.
Taxpayers being £8 billion worse off as a result of the deal:
- £4.3 billion spent in rent.
- 18,000 properties handed back to Annington – with an estimated current market value of £5.2 billion.
- £1.7 billion income generated in 1996 for the taxpayer as part of the original deal.
- Total – £7.8 billion worse off.
