Forces HelpTo Buy is Back!
Although, strictly speaking, it never went away, it was a close run thing as the scheme was extended for another year just before it was due to expire at the end of 2018.
How FHTB works
- The scheme allows Service personnel to borrow an interest-free advance of up to 50% of their salary (to a limit of £25,000), which they can use towards a deposit on a property. This is then paid back over 10 years through their monthly salary.
- FHTB is also available for extending existing homes due to a change in circumstances. Serving members of the regular Armed Forces are eligible for FHTB provided they meet certain criteria. Royal Navy or Royal Marines personnel must have been accepted onto trained strength. Army and RAF personnel must have completed two years’ Service from the date of enlistment and be on the trained strength, and have at least six months left to Serve.
- Personnel who have owned a home in the last 12 months that was within 50 miles of the home they plan to buy are unable to access the
Scheme,unless there are extenuating medical and family circumstances.
- The FHTB loan is interest-free but you will need to pay a small insurance premium, which will also be deducted from your wages every month. The monthly payment will be around £6.50 or less, based on how much you actually borrow under the scheme. This insurance policy will ensure that any outstanding loan will be entirely paid off should you either get a medical discharge or pass away while still Serving in the Military.
- Forces Help to Buy was designed to assist first-time buyers, or those who are moving home and cannot be used to pay off an existing mortgage. If you use the scheme, you’ll be expected to live in your new home unless you’re assigned elsewhere.
- You cannot use the loan just to enhance or expand your current house unless perhaps if it is not appropriate for medical or other family reasons.
- The remainder of your home purchase is covered by a mortgage loan from a lender such as a bank or building society.
- The outstanding balance will have to be paid off if you accept a loan under the new scheme but leave the Military before you have completed your repayment. Your terminal benefits can be used to help clear any outstanding loan, as confirmed by the Government.
- There may be instances where exceptions to the standard rules (and eligibility criteria) may be justifiable, especially where you have extenuating medical and personal circumstances. (Other government-backed housing schemes can be used together with Forces Help to Buy except the Help to Buy Mortgage Guarantee.)
Another Option Shared Ownership
Shared ownership is designed to make that first step of getting onto the property ladder possible by enabling an initial purchase for part of the home. While repaying a manageable monthly mortgage amount for part of your property – usually between 25%- 75% – you continue to pay rent on the rest. The aim is to purchase the remaining shares over time, eventually owning 100% of your home.
Former Service personnel experiencing PTSD or other mental illnesses will be prioritised for social housing.
People with post-traumatic stress disorder (PTSD) and other mental illnesses could be treated in the same way as those with physical injuries, and get the priority they deserve, under new proposals.
The proposals, announced by Communities Secretary, James Brokenshire MP, in January, will also help people who divorce or separate from their partners in the Armed Forces by exempting them from rules requiring them to be a local resident before being given a property.
An overhaul of the system will also mean all applicants for social housing will be asked if they have Served in the Forces at the outset of the process to ensure Veterans get the help they are entitled to.
An eight-week consultation on the new rules started in January.
Ed Tytherleigh, Chief Executive of Stoll, a leading provider of supported housing to Veterans, commented: “The experience of the Veterans we work with is that the response from local authorities is patchy and inconsistent. Some local authorities are playing their part – but we need every LA to ask someone applying for social housing if they have Served in the Armed Forces. If the answer is yes, that information must be recorded and acted upon so that the Veteran can then access appropriate housing.
It is currently too easy for ex-Service personnel – especially younger people and early Service-leavers – to end up homeless. Having Served in the Armed Forces and, despite the commitments given in the Armed Forces Covenant, too many Veterans live in inappropriate accommodation, sofa surf, reside in hostels or end up homeless on the streets.
We welcome the Government’s consultation. Simple practical measures will help us avoid Veterans becoming homeless.”