The council will be the first local authority to put the TA to the front of the queue.
Territorial Army members in Hammersmith and Fulham are being sent to the top of the housing list.
The council will be the first local authority to put the TA, as well as regular members of the forces, to the front of the queue.
Andrew Johnson, Hammersmith and Fulham Cabinet Member for Housing, said: “There can be no people more deserving of a council house than those who gave voluntary service in the name of Queen and Country.”
However ex-paratrooper Stuart Griffiths says servicemen are ill-prepared for civilian life.
“There is always a problem with them accepting society or society accepting them,” he said.
There are 60,000 homeless people in Britain, 25% of which are ex-servicemen.
Hammersmith and Fulham’s announcement follows a recent commitment by the government to prioritise housing for ex-servicemen and their families.
A council spokesman said: “We do not believe that years of loyal service to this country should become an obstacle to finding a home.”
The borough is also home to oldest and most senior regiment in the country, the Royal Yeomanry.
The council say the nature of military work means all too often ex-servicemen and their families end up living in poor quality housing.
Paul Sinclair spent 15 months in the Army before being demoted and eventually discharged.
“My family did not want to know me,” he said.
“When I left the army I had no home, no address and when I left the gates I cried my eyes out.”