Launched on 1 December, the Help to Buy ISA has been introduced to help genuine First Time Buyers (FTBs) to save for a mortgage deposit and ultimately improve their chance of home ownership.
As part of this the government will add 25% to the FTB’s Help to Buy ISA savings, so for every £200 saved, the government will contribute £50 – up to a maximum of £3,000. And, the good news is that unlike similar Help to Buy Schemes there is no requirement for the FTB to pay the Government back for the bonus.
The key highlights:
Help to Buy ISAs are available to FTBs from participating banks and can be opened with an initial deposit of up to £1,000. This will be in addition to the maximum monthly tax free contribution of £200.
The government will then add a 25% government bonus on the interest and total contributions to the ISA once the FTB buys a home - provided a minimum of £1,600 has been saved. As before the maximum bonus is £3,000 on a £12,000 saving.
This bonus will be applied for by the Conveyancer as the home is being bought – but the Conveyancer MUST be a participant of the Scheme to do this. It is therefore very important that the FTB check this detail with their chosen Conveyancer before going ahead – we’ll have more about this in the weeks to come.
The home being bought by the FTB must be under £250,000 in value or under £450,000 in London
Help to Buy ISAs are available from 1 December 2015 to 30 November 2019.
Overall it’s a great opportunity for those who have aspirations to buy for the first time - including tenants who may be looking to become a homeowner in years to come – and for many a Help to Buy ISA may be worth considering. Speak to one of our financial consultants to obtain further information.