TAXPAYERS have lost £14.5 billion in a “disastrous” Ministry of Defence (MoD) military homes deal, according to a National Audit Office report revealed today.

The watchdog found the MoD would have saved billions of pounds had it not entered the 1996 deal to sell much of its service family accommodation (SFA) to Annington Homes.

The report said: “The repurchase has stemmed the flow of further losses but we now estimate that by the time of the December 2024 repurchase of the estate, the MoD was £14.5bn worse off than it would have been had it not entered into the deal with Annington.”

However, the NAO said the recent decision to repurchase the housing was better value for money than if the MoD resumed its arrangement.

Continuing to lease these estates from Annington would have cost the department a further £10.6bn over the next 30 years, it said.

The government announced in December 2024 it would buy back 36,347 military homes for just under £6bn. It had spent decades paying rent to the private equity-backed firm in order to use them.

That same year, the Kerslake Commission on Armed Forces revealed a large number of SFA estates are in need of urgent repairs following years of neglect, with a total cost of repairs potentially reaching up to £4bn.

Inadequate conditions of the military homes was the “consequence of poor management and lack of investment from the MoD,” the report said.

It added: “The terms of the original Annington deal meant the MoD had little financial incentive to improve the condition of the estate.”