The government will be giving an interest-free loan to service men and women of the armed forces to buy their first home. They will be allowed to borrow an interest-free loan that is fifty per cent of their salary, but limited to £25,000. Philip Hammond, the Defence Secretary, announced this and also that the scheme will start on 1st April in 2014. It would cover a 3-year period and also the loan can be repayable over a 10-year period.
The loan is aimed at dealing with the low level in home ownership of service personnel. The level is lower than the general population and addresses the desire of those leaving service, to get a home of their own. Armed forces staff because of frequent moves and deployment, have difficulty in getting credit. According to the Nationwide building society, the average house price in UK was £172,127 in September. The announcement comes following Chancellor George Osborne’s call to the Bank of England to ensure no property boom results because of the Help to Buy housing scheme of the government.
