UK government buys back 36,000 homes for military at £6 billion

Bringing military housing estates back into public hands, unlocking new property developments and refurbishing existing ones for savings of around £230 million a year. This is the meaning of the agreement reached between the British government and British billionaire Guy Hands' Annington property group. The executive will pay nearly six billion pounds to buy back 36,000 properties in the Ministry of Defence housing estate, ending a legal battle that began years ago against the privatisation choices made in the 1990s.

According to the agreement," reads a note on the British government's website, "the Ministry of Defence will buy back 36,347 homes, making major retraining possible and encouraging enlistment.

The ministry, backed by UK Government Investments, and Annington have formally agreed that the department will buy back the properties, which were sold in 1996 and are now worth around £10.1 billion (net of leases), for a sum of almost £6 billion. The new deal will see immediate savings of over £600,000 per day, with the elimination of the current £230m annual rent bill. These savings in the defence budget will help solve the 'deep problems' of military housing and support the development of new high quality homes for military families.

In 1996, the Ministry of Defence had sold most of the Married Quarters Estate (now called Service Family Accommodation) in England and Wales to Annington Homes Ltd (a property company owned by billionaire Guy Hands' private equity group Terra Firma) for £1.6 billion and a long-term lease. A deal that the Nationa Audit Office described as 'disastrous'. Therefore, in early 2022, the ministry had indicated its intention to buy back full ownership from Annington Homes, which had opposed it by announcing legal action. On 15 May 2023, however, the High Court had ruled in favour of the Ministry of Defence.

The announcement of the agreement comes at the same time as the launch of a new strategy of investment in the Armed Forces with the aim of their general generational renewal, which includes making them more attractive through the construction of affordable housing for military personnel and their families throughout Great Britain.