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Military mortgages: Willing lenders allow personnel to seize opportunities – Hall

by: Chris Hall, head of operations at Mortgage Guardian
  • 21/02/2020
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Military mortgages: Willing lenders allow personnel to seize opportunities – Hall
A military career can be fulfilling and rewarding in many ways and although sacrifices have to be made from time to time, there are often significant benefits to military life.


One major benefit is the provision of affordable service accommodation for families and single people available to all military personnel, subject to entitlement.

With personnel often serving far away from the place where they grew up, potentially for many years, such accommodation is therefore essential for many at some point in their career.

Both single and married personnel can also benefit from the newly extended Forces Help to Buy scheme which helps with the cost of buying a property including the provision of deposit and associated fees.

Civilian employers generally do not offer accommodation packages within their standard employment contracts, so to most this must seem like a pretty good deal.

The Ministry of Defence claims that since the introduction of Forces Help to Buy in 2014, it has helped more than 18,000 military personnel.


Leaving it late

While it is appreciated that many military personnel do buy their own home and often outside of established schemes, it is still alarming to note how many are leaving it too late in their life to consider getting on the property ladder.

A large proportion of serving personnel do not get on the property ladder early enough as understandably, focus is often needed elsewhere and buying a property seems to be less of a priority to individuals.

Those that stay in the military the longest are obviously more affected than others due to house price inflation, which incidentally has continued to outstrip salary inflation in recent years.

Promotion through to the higher ranks takes time and the additional pay involved does not close the financial gap enough in most cases. This means that buying a property is becoming less affordable to many first-time buyers as house prices increase.


Trouble back home

Many also see the negative side associated with buying their own home while serving and the possible hassle involved.

For instance, I served with an RAF corporal who had problematic tenants in his property while he was stationed abroad. This was quite a worrying situation for him at the time and one that did not pass without financial loss.

For some who buy property close to where they are based, the thought of being posted away and not being able to live in their home can be off-putting.

Others may not want to buy close to where they are stationed and would prefer to wait until they return to civilian life before buying. But all the while, house prices are potentially increasing further.


Runaway inflation

House price inflation has also caused many instances where the lower ranks have ended up owning bigger and better properties than those of a higher rank.

This is simply because they bought at their earliest possible opportunity and benefited from their property gaining in value.

A large proportion of serving military personnel only start thinking about buying a property in the last few years of service when they are thinking of leaving and settling down in civilian life.

This means opportunities are potentially being missed while in service, not only by not buying sooner but also not putting money aside for a decent deposit.

Forces Help to Buy is not a solution for everyone, especially the lower paid ranks living in expensive areas of the country, or those that are leaving the purchase of a new home too late in their career.


Sympathetic lenders

Military personnel are generally treated favourably by mortgage lenders compared to civilians, especially those who serve overseas.

With military strength in the United Kingdom being in excess of 150,000, mortgage lenders do not want to ignore this very important and profitable sector.

Forces Help to Buy, Recognition of BFPO addresses, Day 1 Consent to Let, as well as lenders being flexible and accommodating to applications where there is a lack of credit history are just some examples.

In addition to these benefits, serving personnel can also have access to the Help to Buy scheme for civilians.

While a good proportion of service personnel do elect to buy their own home, many fail to see the need until it is too late, or it becomes extremely financially challenging.

This is despite the facilities open to them to achieve home ownership. We must strive to portray the facts to service personnel and their families and awaken them to the opportunities available.



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