The Government plans to extend the Homebuy scheme to include the armed force by the end of 2009.

The scheme was announced by the RBS Intermediary Partners (PBSIP) Forum in Sunderland last week. The conditions of the scheme are being finalised between the Ministry of Defence (MoD) and the Communities Agency and the Department of Communities and Local Government.

There is already £20m funding in place for the scheme and applications from prospective partners are being scrutinised.

A spokeswoman for the MoD said an announcement will be made later in the year and, “Details are being developed on the scheme which is designed to improve the lives of those in the armed forces and their families.”

Mike Willis, new build manager at RBSIP said, “The MoD sees the scheme as a way of retaining staff by helping them buy a house when they return to the UK, and we believe it can help people onto the housing market while generating returns.”