Extend Help to Buy Isa, urges Nationwide
The Help to Buy ISA was launched in December 2015. Savers can deposit up to £1,200 in the month they open the account and a up to £200 in each subsequent month. The Government then tops that up by as much as £3000. The money must be used as a deposit on a first home.
Since launch, more than 196,000 savers have used the scheme, claiming an average of £800 in Government contributions. Rates of interest on Help to Buy Isas have generally been better than for normal savings accounts. Nationwide, Barclays and Virgin Money all pay 2.5% or higher.
The scheme is due to expire in 30 November 2019. Nationwide is urging the Government to extend it, saying it makes a real difference to more first time buyers. It added: “This is particularly important during a period of rising housing prices and living costs, and where any assistance for those saving for a deposit is a major bonus.”
According to Nationwide data, it now takes 6.5 years for a first time buyer in the UK to save for a 10% deposit (£18,480 on average), compared with 4.8 years and £14,080 a decade ago. There are also large regional differences, with savers in the North currently requiring 4 years, while those in London need 12 years. It said the Help to Buy ISA allows the average first time buyer to get on to the housing ladder two years earlier.
Although the Help to Buy ISA is due to be withdrawn in the next year, savers have until 1 December 2030 to claim the bonus. This means that if there is no extension, Help to Buy ISA savers have only between now and 30 November 2019 to open an account.
Tom Riley, Nationwide’s director of savings, said: “Home ownership continues to be a desire for many people, but saving for the deposit remains the biggest challenge for those hoping to secure a home of their own. The existing Help to Buy ISA scheme offers flexibility and simplicity and has been a proven success.”