Changes to lending to Armed Forces Personnel – Forces Help to Buy Mortgage Broker Cambridge
May 9th, 2016
Recent announcements have caused a number of army personnel to enquire into purchasing a new home. Research has shown that 55% of people have been underpaid on their Married Quarters following the new Combined Accommodation Assessment System (CAAS). This means that rather than based on proximity to local amenities such as a post box or phone box, other more modern criteria such as internet access and energy efficiency is being considered when analysing where to home army personnel, which in turn has mean that many people have been advised that their accommodation costs are increasing.
The ‘Forces Help to Buy’ – a scheme where armed forces personnel are able to apply for an equity loan equivalent of 50% of the personnel’s annual salary up to a maximum of £25k – is being looked into by many. The loan is interest free and repayable over 10 years. The funds from the loan can be used as a deposit or towards moving costs involved in purchasing a home.
A recent agreement between the British Bankers Association (BBA) and the Armed Forces Covenant Financial Services has caused a change in lending policy with mortgage lenders for armed forces. Previously if the service personnel was being posted overseas for more than 6 months without family residing in the property, it was only possible to acquire the property as a Buy to Let. There were concerns that owning the property as a Buy to Let would rise the costs rather than owning the property as a residential and then consent to let being granted by the lender. A consent to let would be mean that this could be removed from the member of armed personnel’s orders have come to an end.
For more information, see the government’s website: https://www.gov.uk/guidance/forces-help-to-buy