250,000 first-time buyers open Help to Buy ISA since launch
Chancellor George Osborne today announced that 250,000 wannabe property owners have opened the ISA product and 75% of these are aged 30 and under.
This means that since launch, more than 3,000 accounts have been opened each day.
The first homebuyers have also claimed their Help to Buy government bonus this week and the figures come as Osborne also revealed that Chorley Building Society will offer the new targeted ISA from 8 February, which brings the total number of participating lenders to 15.
What is the Help to Buy ISA and how does it work?
Here’s a quick summary of the scheme, but see Yourmoney.com’s complete guide to Help to Buy ISAs for more information.
Help to Buy ISAs give first-time buyers the opportunity to save a deposit for a property, earn tax-free interest and receive a boost to their coffers from the Treasury.
For every £200 saved into your Help to Buy ISA, the government will top it up by an extra £50, and the maximum each account holder can save is £12,000, meaning it will add an extra £3,000 to your savings pot. If there’s two of you, joint first-time buyers could potentially receive a boost of £6,000 to their deposit.
While first-time buyers will benefit from tax-free interest on the money they save into their ISA, at the rate offered by their provider, the Government boost is only paid when they come to purchase their first home, and it goes straight to the conveyancer to form part of the deposit.
The tax-free government bonus is only available for people aged 16 and over, saving up to buy a first home worth up to £450,000 in London, or £250,000 anywhere else in the UK.
Osborne said: “Last year I announced further help for first time buyers with the new Help to Buy ISA and I’m delighted that a quarter of a million people have already taken advantage. It is all part of our plan to back working people who are doing the right thing and saving for their first home.”
Just this week, the London Help to Buy scheme launched allowing people to buy a new-build property in the capital with a much smaller deposit and an interest-free loan from the government.