Unlock your housing options
ARTICLES
When it comes to buying or renting a property, whether or not you’re a first-timer it’s never too early to start planning where you’re going to live on leaving – and, more to the point, how you’re going to pay for it! Luckily there’s a lot of help available – financial and otherwise – to aid your preparations …
Home truths
Buying a house for the first time, or seeking a property on the private rental market, can be a bewildering process. If you’ve never done it before – and, indeed, if you have never had to cope with finding any kind of housing in the private (civilian) sector – the best approach is to start by compiling a ‘to do’ list. This should ideally be written in the order in which things need to be done, and in which people, banks, organisations and/or advisers need to be approached.
A great deal of information and guidance on civilian housing is available from government/MoD sources, and you will find this webpage a useful starting point.
To complement this official advice, our short how-to guide contains some suggestions we hope will help set you on the right path to securing a property.
Let’s begin with the basic foundations …
Step 1: Start by researching an area
Think about where you want to buy or rent. Does the area have all the amenities you need in terms of schools, public transport, ability to travel easily to work, shopping, proximity to friends and family? Using a website such as rightmove or Zoopla, you can begin to build up a picture of the availability of property, and the cost of buying or renting in any given area.
Step 2: Know your financial situation
Buying or renting a house isn’t just about being able to make mortgage repayments or finding the monthly rent. For buying in particular, the actual process can be quite expensive. So be very sure about your position: how much money you’ve already got; finding a stable income on leaving the Forces; how much you can access from a mortgage company; how help-to-buy schemes can help you (see below); and what your buying and moving expenses are likely to be (see ‘Breaking down the costs of buying’). If you are concerned, seek financial advice – but make sure it is independent.
BREAKING DOWN THE COSTS OF BUYING
As a guide, these are the common financial outgoings for a house purchase:
- an up-front deposit (at least 10% of purchase price, and often more)
- mortgage arrangement fee
- survey fee
- solicitor’s fees
- stamp duty
- search fees
- removal/storage costs
- occasionally, one-off fees to service providers to the property to install or update, for example, wi-fi or phone lines
- building and home contents insurance
- monthly mortgage payments (not forgetting to factor in the likelihood and affordability of future interest rate rises, which – as many people have learned, literally to their cost, in 2022 – can make an enormous difference to your outgoings).
You should also be aware of Council Tax payments on your property and water rates in the area, while fuel bills are also a major concern at the moment, so be sure to consider the options available in your chosen location.
Step 3: Put your mortgage in place
If you are buying and have found a property (or even before you have), you will need to sort out your mortgage. Check all your options (preferably with an independent financial adviser). You may come across:
- repayment mortgages (you pay back what you owe, with interest, over an agreed period of time)
- interest-only/endowment mortgages (you pay interest on the loan to the lender and, at the same time, into an investment/savings plan, which – in theory! – will grow enough to clear the balance of debt at the end of your mortgage period).
Mortgages are available through building societies, banks, specialist mortgage companies, insurance companies and even building companies (especially in the case of new-builds). You can approach these direct or use a broker who can act as an agent.
Many mainstream mortgage providers support Service personnel by offering mortgage products in conjunction with the Forces Help to Buy (FHTB) scheme (a pilot scheme launched in 2014 that is currently scheduled to run until December 2022). There are some exceptions, though, so it is always best to check before you apply for a mortgage. You can do this by looking on their websites, asking in their branches or phoning them. Alternatively, if you are planning to use a mortgage broker, make sure you disclose your use of FHTB at the outset and that they subsequently inform potential mortgage providers.
In addition, check out our ‘Get help to buy’ section below, for more information on the kind of schemes currently available to help you finance a property purchase.
Step 4: Your new house
A house is often the most expensive thing we will ever buy. So, before you commit legally (the point of exchanging a contract with the seller), make sure you are 100% happy with all aspects. It is most important to know you have a structurally sound building; this can be determined by a detailed survey – another cost to add to your list.
Step 5: Know the legal process
You will need to engage the services of a solicitor. Personal recommendations are a good starting point. Failing that, use a small independent firm that deals specifically with house buying/selling. Your solicitor will liaise direct with the seller’s solicitor and will obtain detailed information regarding searches in the local area. Your solicitor will also deal with the exchange of money from your mortgage lender to the seller (including your deposit on the property), and with HM Treasury regarding stamp duty – a compulsory tax based on the purchase price of your property.
Now we’ve dealt with the foundations of finding a property, here is some more substantial guidance that should help make your dream home a reality …
Defence Transition Services
In October 2022, Defence Transition Services takes over from the Joint Service Housing Advice Office (JSHAO) as the organisation with responsibility for providing information and guidance on civilian housing options for Service personnel and their dependants, including delivery of civilian housing briefings. Consequently, there may be a pause in delivery of these briefings during autumn 2022. We will update this feature online in due course, but in the meantime, please direct any enquiries to DBSVets-DTS-Central@mod.gov.uk and for more general information, click here.
Get help to buy
Forces Help to Buy
FHTB was launched in 2014 as a three-year pilot scheme, but, as mentioned above, this has now been extended to December 2022. The scheme could enable you to borrow up to 50% of your salary, to a maximum of £25,000, interest free. This loan is towards buying your first home or moving to another property on assignment or as your family’s needs change.
You are eligible if you:
- have completed the prerequisite length of service
- have more than six months left to serve at the time of applying
- fulfil the right medical categories.
There may be instances where exceptions to the standard rules are justifiable, especially where you have extenuating medical and personal circumstances.
You can apply for the loan online through the JPA system, and can seek advice on your application through your chain of command and personnel agency. Full details of eligibility and qualifying criteria can be found in JSP 464 Part 1 Chapter 12.
Other government-backed housing schemes (see below) can be used together with Forces Help to Buy.
To find out more about FHTB, visit the gov.uk website.
Government help to buy schemes
The government has created several help to buy/own your home schemes to assist people in buying their own properties.
- The Shared Ownership scheme enables you to buy as little as 10% or as much as 75% of a property and pay rent on the rest.
- The Help to Buy: Equity Loan for first-time buyers enables you to buy a new-build property with a small deposit.
Click here for an overview of all the current government-backed help to buy schemes.
Finally …
Both buying and renting equate to a big financial and emotional investment. You can minimise your anxiety by finding out as much as you can in advance, using relevant sources of advice such as the above mentioned government/MoD information geared specifically to Service personnel needs.
So, keep doing your homework, build up your bank of information and knowledge, and – when the time comes – you’ll be ready to get moving!
CLICKS FOR BRICKS
Click on the following links to find out more about current help to buy schemes and civilian housing options:
- government advice on civilian housing options
- the government’s Own Your Home schemes
- the Army Families Federation has additional info about the Forces Help to Buy Scheme
- define your location and property search using sites such as rightmove
- … and Zoopla