MoD buys back over 30k homes to end 'rotten' military housing deal saving taxpayers £230m per year

The MoD has said that owning the homes outright will save £230million annually in rent payments and enable significant improvements to military housing.

The estate is now valued at £10billion, according to the MoD.

In 1996, under John Major's government, around 55,000 military properties were sold to Annington Homes for £1.7billion and then leased back by the MoD.

The deal has since faced intense scrutiny from watchdogs, including the National Audit Office which found taxpayers lost more than £4billion on the sale, concluding the MoD had severely underestimated future property value increases.

The Government also remains responsible for both rent and maintenance costs.

Meg Hillier, then-chairman of the Commons parliamentary affairs committee, branded it a "rotten deal for the taxpayer" in 2018.

The MoD had initially claimed the 200-year lease would free up funds for improvements.

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Defence Secretary John Healey called the new deal a "once-in-a-generation opportunity" to improve the military housing estate and create jobs.

The agreement means the Government will no longer have to plan for £4.3bn of liabilities related to the previous arrangement with Annington, unlocking budget headroom for "substantive redevelopment and improvements" to military housing.

The £230million annual rent savings will be reinvested into improving the estate.

Now, the MoD is set to submit a planning application for 265 new houses and apartments at RAF Brize Norton in Oxfordshire.

A further 300 new houses have been planned for Catterick Garrison in North Yorkshire, with plans to be submitted in spring.

The Imjin Barracks in Gloucestershire showcases the MoD's vision, with 176 homes being built with low-carbon heating systems and solar panels to reduce energy bills for military families.

Admiral Sir Tony Radakin, chief of the defence staff, said: "We understand the importance placed on this for people's morale and decisions on whether to continue in the Armed Forces long term."

"This work will provide military families the higher-quality houses they fully deserve. It is very significant and very welcome."

Previously, Hands had filed a legal claim against the Housing Secretary with the European Court of Human Rights in September over concerns about the Leasehold and Freehold Reform Act.

A separate dispute between Annington Homes and the MoD over property rights has also been settled.

Richard Hands, managing director of Terra Firma, said: "This deal ensures long-term value for both parties and brings an end to the legal disputes which had created uncertainty for both Annington and UK service families."