Under the new Forces First scheme, both former and serving personnel will be given priority to occupy properties built on surplus military land.
Ministers insist the move will contribute to housebuilding targets as well as prioritising the needs of those who have served.
It has been welcomed by military good causes, who highlight that veteran housing referrals have more than doubled over the last 12 months.
Explaining the plan at the recent Labour Party conference in Liverpool, Defence Secretary John Healey told delegates it would offer those who had served greater opportunities to get on the housing ladder.
“It gives them first dibs, if you like, on homes on surplus land, making home ownership more of a reality for more personnel and veterans,” he said.
Healey revealed 100,000 properties could be constructed at former defence sites in the long term.
Exact numbers of those earmarked for veterans and personnel would be determined locally between government, councils and developers, he added. And affordable housing would be the priority.
The MP for Rawmarsh and Conisbrough said the initiative was being pioneered at a site in Feltham, where representatives of the MoD, Greater London Authority and Borough of Hounslow were working together.
Forces First will form part of the Defence Housing Strategy, full details of which will be published in the coming weeks.
Charity Alabare welcomed the news, citing a 122 per cent hike in its veteran housing cases over the last year.
Chief Executive Officer Andrew Lord said the risk of people ending up on the streets was rising as demand for properties increased.
“The pledge to give veterans and service personnel first dibs on housing could go some way to breaking the cycle of homelessness before it even begins,” he added.
“We’re seeing a growing level of need in the veteran community for affordable, high-quality accommodation – we’d be keen to work with the government.”
