A total of 25 building societies have pledged to implement a mortgage policy that allows Armed Forces personnel who are posted overseas to rent out their homes without facing higher mortgage interest rates or a requirement to change their mortgage.
This announcement follows an annual roundtable at No.10 Downing where Philip Dunne, Minister for Defence Procurement, challenged financial institutions to support Armed Forces Personnel.
Those in the armed forces and their families make many sacrifices in serving their country and can face disadvantages in doing so. Personnel are often posted overseas for long periods of time at short notice, which can lead to penalties on their existing financial products such as mortgages.
This move led by the Building Societies Association, whose Head of Mortgage Policy, Paul Broadhead, attended the roundtable, means that members of Armed Forces who rent out their homes during deployment will be allowed to keep their existing mortgage and not have to change to a buy-to-let mortgage. This will save them both money and time.
Amongst the 25 are the largest society, the Nationwide, Yorkshire Building Society, the second largest and the Darlington Building Society which has the Catterick army base in its local area. A full list of all 25 societies can be found in the notes.
Andrew Baddeley-Chappell, Head of Mortgage Strategy & Policy at Nationwide said:
“Recognising that Armed Forces personnel face a unique set of circumstances because of the requirements of the vital role they undertake, including being posted either abroad or to another part of the UK during their service, Nationwide ensures that, should they wish to let out a property they currently own, they are able to do so with minimum restrictions – For some time we have waived application fees or additional interest rates usually associated with letting, and also allowed personnel to let their property, even on a residential mortgage, from inception.”
Andy Caton, Executive Director at Yorkshire Building Society said:
“We will not charge the additional fees and increased interest rate usually introduced after permission to let is given to members of the Armed Forces. In addition we will extend this to Foreign Office officials and those working for international charities and development agencies.
“We recognise the huge personal sacrifice and positive impact made during these overseas postings and feel it is fair to include a wide group of public servants and voluntary workers in these positive changes.”
Colin Fyfe, Chief Executive of the Darlington Building Society said:
“We are very keen to support our service personnel who are stationed abroad and are proud to ensure they are not disadvantaged by the requirements of the job they do. We believe wholeheartedly in supporting our local communities and given our proximity to Catterick, it is important that we offer a practical, hassle-free solution for them.”
The Prime Minister said:
‘The Armed Forces Covenant is something I feel incredibly strongly about – that’s why I haven’t just prioritised the Covenant, I have written it into law. But there is much more to do, so I welcome the commitments that have been made to improve the way our Armed Forces and their families access financial services.’
Defence Secretary Michael Fallon said:
“Looking after your home and your money can be more of a challenge when deployed on operations or serving abroad. This is a welcome first step to help our servicemen and women get a better mortgage deal.”
Sara Baade, Chief Executive of the Army Families Federation said:
“What this recognises is that military families often have limited choice in where they are sent to live. They go overseas because the country needs them to. It will mean a lot to those that have bought their own homes to know that the challenges of service life are beginning to be understood by our building societies."
Notes to editors:
The 25 building societies involved are:
Tipton & Coseley
What is the Armed Forces Covenant, and how does it work?
The Armed Forces Covenant is a promise from the nation that those that those who serve or have served in the Armed Forces, and their families, are treated fairly. The Covenant is enshrined in law and the Government is committed to delivering the best possible outcomes for the Armed Forces community.
The Government works with a range of delivery partners who are signatories of the Covenant, which include businesses, local authorities, charities and community organisations. Signatories make their own promises to support the Armed Forces community and implement these promises through policies, services and projects.