Mortgage Intelligence Update: Armed Forces Personnel
Head of Sales and Marketing Sharon Mawby takes a look at some recent industry announcements regarding army personnel
What is changing?
After recent announcements, our Broker Support Desk has received several enquiries concerning army personnel purchasing a new home. Research has shown that 55% of personnel have been underpaid on their Married Quarters following the new CAAS (Combined Accommodation Assessment System). Instead of being based on proximity to local amenities e.g. post box or phone box, it will now be based on other criteria such as internet access and energy efficiency. This assessment change has resulted in many personnel being advised their accommodation costs have increased.
This has also led to military personnel enquiring into the availability of the Forces Help to Buy. This is a scheme where they are able to apply for an equity loan equivalent of 50% of the personnel’s annual salary, up to £25k. The loan is interest free and repayable over 10 years and must be input as a financial commitment. The funds can be used toward a deposit as well as assisting in the costs involved with the purchase.
What if they are purchasing and get orders to be posted overseas?
Until recently, if the service personnel was being posted overseas for more than six months without family residing in the property, they could only purchase as a buy-to-let. But many lenders have now changed their stance on this following an agreement with the British Bankers Association (BBA) and the Armed Forces Covenant Financial Services. Concerns were raised about the increase in costs of having to have the property as a buy-to-let, despite the intention to live in the property. Barclays Mortgages believe this results in £100 a month of additional costs.
Now the position among many of the big lenders, with more joining all the time, is that the property can be purchased on a residential mortgage and then given consent-to-let. This removes the need for the additional costs on a property the personnel are going to live in once their orders have come to an end.
If you would like to know more about how to join our award-winning Mortgage Network as an appointed representative or becoming a member of our Mortgage Club, call our Broker Support Team on 0845 130 7446, option 1.