Few people can fail to have been moved by the Remembrance commemorations at the weekend, and the sacrifices made by those brave men and women in our armed services over the years.
Nor should we forget the sacrifices made by those who still serve. As citizens of the UK, they are often deployed abroad, putting a huge strain on relationships and family life.
So, it is also worth sparing a minute to consider just how disadvantaged they are when it comes to being able to buy a home.
Getting a mortgage is extremely difficult, and hence the low rate of home ownership in the armed services when compared with the civilian population.
Only 35% of junior ranks overall (and 27% in the army) own a home compared with 65% of those in the equivalent civilian group.
Around 70% of officers own a home compared with 90% of those in an equivalent ‘higher managerial’ group in civilian life.?Only 43% of service personnel overall actually own their own home.
?Not surprisingly, personnel frequently indicate that their desire to own a home is a key reason for their decision to leave the forces. ??The problem stems from the fact that members of the armed forces may be required to relocate to several postings in the UK and abroad during their time in service. Many have a British Forces Post Office address, which is used for the delivery of mail around the world.
These addresses affect their credit rating because automated credit and underwriting systems automatically reject BFPO addresses because they cannot be checked against credit histories.?
An additional problem is that when serving abroad, forces personnel often get overseas allowances to cover expenses such as accommodation and travel. This raises issues regarding the long-term sustainability of such income as it may cease on return to the UK.?
The issue of mortgage underwriting also applies to those stationed in the UK as repeated moves of base can also cause problems in building up a credit history. Soldiers, especially, can have four or five addresses in the last three years and, in the middle, they could have had a tour overseas. It causes them huge issues. ??
There are some lenders who will give special dispensation for the armed forces, and the smaller building societies have taken the initiative on this issue. However, mortgage broker Capital Fortune says that the ability to manually underwrite forces personnel should be across the board, and the major banks, particularly those owned by the taxpayer, should take the lead.
The Government has recently set aside nearly £200m towards the new Forces Help to Buy scheme which will come into effect next April. This scheme will allow both servicemen and women to borrow a deposit of up to 50% of their salary, interest-free, allowing them to buy their first home. ??Mortgage lenders will still, however, need to approve their loan, and it is not just help with a deposit that is required.