The MoD will pay Annington £6bn to buy back 36,347 houses, saving £230m a year in rent.
The announcement comes as the government starts work on a new military housing strategy, to be published next year. Key principles of the strategy will include: a renewal of armed forces accommodation; new opportunities for forces homeownership; and better use of MoD land to support the construction of affordable homes for families across Britain.
Annington, owned by Guy Hands’ Terra Firma Capital Partners, paid £1.7bn for the military housing estate (55,000 houses at that time) in 1996 under a private finance initiative (PFI) deal. The switch back to public ownership was initiated by the previous Conservative government, which won a high court ruling in May 2023 that asserted the MoD’s right to buy it back.
The current Labour government is now seeing the plan through to completion.
Defence secretary John Healey said: “This deal shows our government is determined to deliver homes fit for our heroes. 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. I thank the teams who have helped us reach this landmark deal at pace – another example of this government delivering for defence.
“There is still a lot of work to do to deliver the homes our military families deserve, and these problems will not be fixed overnight. But this is a decisive break with the failed approach of the past and a major step forward on that journey.”
Last week the House of Commons defence committee reported that a third of single living accommodation and two-thirds of service family accommodation are no longer fit for purpose.
The MoD now intends to begin sorting it out. 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.
