Around one in five first-time buyers have managed to get a step up on the property ladder with a Help to Buy ISA, new government figures show. According to the Treasury, since the launch of the scheme in December last year over 500,000 Help to Buy ISAs have been opened and more than 27,000 homes […]
Around one in five first-time buyers have managed to get a step up on the property ladder with a Help to Buy ISA, new government figures show.
According to the Treasury, since the launch of the scheme in December last year over 500,000 Help to Buy ISAs have been opened and more than 27,000 homes have been bought.
The Treasury said 38,595 bonuses totalling over £20 million with an average bonus value of £530 have so far been paid through the scheme.
Help to Buy ISAs give first-time buyers saving for a deposit the opportunity to put away £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000.
You can open an account with a one-off lump sum of up to £1,000 in addition to the monthly maximum, while couples buying together can combine their bonuses, giving them boost of up to £6,000.
The median age of a first time buyer in the scheme is 27 compared to a national first-time buyer average age of 30.
The highest proportion of property completions with the support of the ISA are in the North West, Yorkshire and the Humber and South West.
Other figures released by the Treasury showed over 220,000 people have been able to buy a home using the government’s Help to Buy products.
Chancellor Philip Hammond said: “Our Help to Buy schemes are helping hundreds of thousands of people, especially first time buyers, achieve home ownership.”
Danny Cox, chartered financial Planner at Hargreaves Lansdown, said: “The Help to Buy Isa is helping to support younger home buyers and push down the average age at which people first step onto the property ladder. The majority using Help to Buy ISA are under the age of 35 which shows the Lifetime ISA age limit of 40 is well placed to support first-time buyers.”
The Help to Buy ISA is due to end in 2019. Savers with a Help to Buy ISA will be able to transfer into the Lifetime ISA from April next year or continue saving into both – but you will only be able to use the bonus from one to buy a house.
The Lifetime ISA and will allow anyone younger than 40 to put away up to £4,000 a year until they are 50. For every £4 people save, the government will give them back £1, a bonus of up to £1,000 a year. The savings and bonus in a Lifetime ISA can be used towards a deposit on a first home worth up to £450,000 or taken tax free at 60.
The Help to Buy Mortgage guarantee scheme is set to end in December as a wide range of 95% mortgage products are now available from commercial lenders.
More than 100,000 completions have now taken place through the Help to Buy equity loan scheme, which offers buyers up to 20% of a newly-built home’s costs so they only need to provide a 5% deposit.
The London Help to Buy scheme provides an equity loan of up to 40% for buyers in the capital with a 5% deposit and has helped 1,500 buyers.
