Save, make, understand money

First-time Buyer

First-time buyers net average £1,000 bonus through property scheme

Paloma Kubiak
Written By:
Paloma Kubiak

The latest Help to Buy ISA statistics reveal savers received £426m in bonuses, used to finance properties worth £56.2bn in total.

In the three months to March 2020, 25,627 bonus payments were made, helping first-time buyers complete just under 20,000 property transactions.

The latest quarterly statistics reveal the value of properties purchased through the Help to Buy ISA scheme stood at £3.48bn.

Since the launch of the Help to Buy ISA in December 2015, 323,767 property completions have been supported by the scheme, with 426,565 bonuses paid.

HM Treasury revealed the average bonus stands at £1,000 with the highest number of completions in the North West and Yorkshire and the Humber, while the lowest number is in the North East and Northern Ireland.

The median age of a first-time buyer in the scheme is 28, compared to the national first-time buyer median age of 30. The Q1 2020 statistics revealed that 66% of first-time buyers using the bonus scheme were between the ages of 25 and 34.

Further, the mean value of property purchased through the scheme stands at £173,878, compared to the average first-time buyer price of £194,718 and a national average house price of £231,855.

The Help to Buy ISA scheme closed to new accounts on 30 November 2019. But existing account holders can continue saving into their account until 30 November 2029. The Help to Buy: ISA government bonus must be claimed by 1 December 2030.

Separate statistics on the Help to Buy Equity Loan scheme also revealed there were 51,357 purchases in England over the 12 months to March 2020, with first-time buyers accounting for 42,231 of these sales. Home purchases were down 2.1% on the year.

Since the scheme was launched in 2013, more than 272,000 homes have been bought through Help to Buy and just over 9,500 have been bought in the first quarter of the year.

The total value of equity loans stands at £16bn and the average purchase price of a property bought under the scheme was £268,553, with buyers using an average equity loan of £58,820.

The ministry of housing, communities and local government said the figures had been affected by the coronavirus pandemic and the lockdown in March.

The scheme is set to change in 2021, with regional price caps limiting the value of homes that can be bought and there are plans to phase Help to Buy out completely in 2023.

Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “Help to Buy is on the home straight. The ISA and equity loan schemes have helped hundreds of thousands of people onto the property ladder, but their time is running out.

“Unless you already have a Help to Buy ISA, you’re too late to start one. And while the equity loan scheme has a few more years to run, the costs and complexities involved mean it may not be a good idea to grab one while you can.

“It means future homebuyers may need to look elsewhere for help getting onto the property ladder – and the Lifetime ISA can be a useful alternative. If you are saving for your first home, are aged 18-39, have at least a year until you want to buy, you could get up to £1,000 a year of free money from the government to put towards your property deposit.”