Help to Buy ISA sees hundreds of people on property ladder
Hundreds of people in Scarborough have used the Government’s Help to Buy ISA scheme to get on the housing ladder, figures show.
The tax-free savings account – which closed in November just under five years after it launched – has drawn criticism from housing charities such as Shelter for helping those who are already better off, while leaving some renters no closer to being homeowners.
Treasury data shows that 578 people in Scarborough received a Government bonus through the Help to Buy ISA between December 2015 – when the scheme launched – and September last year.
In that time, an estimated 431 properties were bought through the tax-free savings account, with more than a quarter purchased between October 2018 and September 2019.
First-time buyers in Scarborough each received a bonus sum of £873 on average last year. The national average bonus was £966.
The Help to Buy ISA scheme closed to new applicants in November last year, and savers with an account open will need to claim their bonus by December 1 2030 or risk losing out.
The Government boosts any funds saved in the account by 25% at the point the property is purchased. The minimum it will add is £400, while the maximum is £3,000.
The rule on using the bonus money on completion, and not at the exchange stage, has previously caused “confusion” among savers, according to the Mortgage Advice Bureau.
James Chidgey, new homes relationship manager at the MAB, said: “It can still mean buyers having to resort to temporary loans or assistance from family to put down the minimum 5% deposit required to reach exchange of contracts with a vendor.
Although the Help to Buy ISA is now closed to new applications, there is a very good alternative ISA available, the Lifetime ISA. This can be used by first-time buyers to save for a home, with a facility to save up to £4,000 per annum and receive a 25% bonus from the Government.”
The separate Help to Buy equity loan initiative, which sees the Government offer low-interest loans towards a deposit on a new-build home, is still open.
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