The government has finally launched its much anticipated Help to Buy ISA, which sees the government contribute to first-time buyers’ savings so they can buy a house.
For first-time buyers, affording a deposit in the first place is the main problem they face, not the mortgage repayments. Therefore, the government is launching a Help to Buy ISA which could see buyers receive as much as £3,000 from the government.
The Help to Buy ISA works like other ISAs, in that it is a tax-free account which pays interest on savings. Users can put in as much as £200 each month, until a total of £12,000 has been saved into the account.
The government will provide a sum equivalent to 25 per cent of the amount saved into the ISA, so if you saved the full amount possible (£12,000), you would receive £3,000 from the government.
If you buy as a couple, you can receive up to £6,000 from the government.
To be eligible for the ISA, you must be a first-time buyer who is at least 16 years old. Accounts can be opened from 1 December 2015 until 30 November 2019.
Account holders will have until 2030 to purchase a house to receive the government’s contribution.
At the time of writing, 14 organisations offer the ISA: HSBC, Lloyds, Nationwide, Barclays, Santander, NatWest, Halifax, Bank of Scotland, Newcastle building society, Virgin Money, Clydesdale Bank, Yorkshire Bank, Ulster North and Aldermore.
