The Forces Help to Buy scheme was announced by defence secretary Phillip Hammond at the Conservative party conference on Saturday.

The £200m scheme will see service men and women offered an interest-free loan worth up to 50% of their salary to help form a deposit for their first home. The scheme will start on April 1 2014 and allow each forces member to borrow up to £25,000.

Forces Help to Buy will run for three years.

Defence secretary Philip Hammond said:

“Service personnel can struggle to enter the housing market as they move around throughout their military career. By giving our troops this extra help they will be more able to set down roots and get onto the property ladder.

“The introduction of this new scheme will help increase homeownership, and provide our armed forces with sustainable lifestyle choices. It further demonstrates the government’s commitment to strengthen the armed forces covenant, ensuring that personnel and their families are not disadvantaged by their service.”