The Chancellor took me by surprise last week when he announced the “Help to Buy ISA”in the budget. After the help he’s already given first time buyers when he adjusted the Stamp Duty thresholds last year.
Although the finer detail is yet to be announced, the scheme will work as follows:
First time buyers can save up to £200 a month in an ISA and the government will pay a bonus of 25% i.e. a maximum of £50 per month. The maximum overall bonus the government will pay is £3,000, but they won’t physically give it to you until you are actually purchasing a home. You can start saving from aged 16 and the scheme is open for 4 years. If you are buying with a partner, there is no reason why you can’t both have an account and double your money!
I can’t find anything which says you need to pay it back at any point, so it really is a gift from the government.
The maximum purchase price for the scheme is £250,000 (£450,000 in London).
There has been some criticism that the scheme will push house prices up, but I am all for giving first time buyers a helping hand, and as a parent, I am all for easing the pressure on the “Bank of Mum & Dad!”
Help to Buy ISA will be available in the autumn
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