According to new figures from the Treasury, 83,686 homes have been bought using a Help to Buy Isa since the scheme was launched in December 2015. 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 […]
According to new figures from the Treasury, 83,686 homes have been bought using a Help to Buy Isa since the scheme was launched in December 2015.
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 Treasury said that 113,868 bonuses have been paid through the scheme with an average bonus value of £678.
The highest proportion of property completions with the support of the scheme is in the North West, Yorkshire and The Humber and West Midlands.
The median age of a first-time buyer in the scheme is 27 compared to a national first-time buyer median age of 30.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Anyone saving into a Help to Buy ISA at the moment has to be cheered by the fact that since December 2015, nearly 84,000 people who were in their shoes have since clambered onto the housing ladder.
“As time goes on, and funds build up in these ISAs, we are seeing more and more people able to buy a home with the help of the scheme.”
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.
Other figures released by the Treasury show over 230,000 people have been able to buy a home using the government’s Help to Buy products.
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.
Andy Sommerville, director at Search Acumen, said: “The good news in the most recent Help to Buy loan scheme figures is just papering over the cracks in our housing market.
“Borrowers had to take on more debt than ever to make their homeownership dreams a reality. In London in particular, many first-time buyers are resorting to taking on equity loans of up to 40%.
“In an age where our younger generation is being saddled with breath-taking amounts of debt, we have to question how much more they can handle, no matter how well-meaning the support schemes may be.
“It all boils down to the fact that our first-time buyers are scrambling to buy too few homes at too high prices. The only way we’ll be able to support first-time buyers without the spectre of a lifetime of huge debts hanging over them is to build more homes.”
[box style=”4″]
What Mortgage has teamed up with London & Country to offer you expert advice on the right mortgage deal.
Whether you’re buying a new home, remortgaging to a new deal or buying an investment property, L&C can help – and you’ll pay no fee for their advice. To find out more, click here.
[/box]
