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Help to Buy ISAs - How will it work?
George Osborne announced the introduction of new Help to Buy ISAs in his March budget in an attempt to revive the housing market.
The scheme is another way for millions of first time buyers struggling to save for a deposit to get onto the property ladder.
Help to Buy ISAs Scheme:
- The Help to Buy ISAs will be available to all first time buyers, who are over the age of 16 years old, who do not have an interest in another property within the UK and will live in the property following completion.
- Offer savers a £50.00 bonus for every £200.00 they save towards a deposit so the Government will pay a maximum of £3,000.00 on savings of £12,000.00. 25% bonus is accumulated on both savings and interest earned each month but not on the actual bonus from the Government.
- First time buyers will need to have saved a minimum of £1,600 to receive the bonus from the Government.
- The ISA can be opened any time up to 4 years from when the scheme is launched.
- The scheme limits the price of the property that can be purchased to £250,000.00 outside London and £450,000.00 in London.
- The scheme is not available for Buy to Let Properties.
- Banks participating in the scheme include Barclays, Lloyds Banking Group, Nationwide, Natwest, Santander and Virgin Money.
- Help to Buy ISA scheme can be used in conjunction with other Help to Buy initiatives and shared ownership schemes. The money can be used to buy a new build or old property.
- Savers can withdraw funds if they wish, but this will impact the bonus received
- The bonus is paid directly to the Mortgage Lender when you are ready to buy your first home.
- The Help to Buy ISA is available to each first time buyer so if there are two of you, then both of you can have your own individual ISA account and therefore increasing the bonus you accumulate to £6,000.00 which can be put towards your new home.
Help to Buy ISAs will be available from the 1st December 2015. Fishers are on the panel for all of the banks participating in the scheme and will be happy to assist you with your purchase.