One year to go for Help to Buy ISA applications

  • Help to Buy ISA scheme closes to new savers on 30 November 2019
  • To date, the initiative has supported property completions worth £29.3bn[i]
  • Would-be first-time buyers might wish to review their options to maximise their savings potential and receive up to £3,000[ii] from the Government before the scheme finishes

Potential first-time buyers have only one year left to open a Help to Buy ISA. 

The Government’s Help to Buy ISA scheme is due to close to new savers on 30 November 2019, prompting savings experts at the Society to remind people currently saving for their first home to review their options and consider the best option for them.

How does a Help to Buy ISA work?

Launched on 1 December 2015, the scheme gives people saving for their first home a 25%[iii] boost to their savings when they buy a property of £250,000 or less (£450,000 in London).

Savers can deposit up to £200 a month in a Help to Buy ISA, or £1,200 in the first month, and become eligible to receive the bonus once they have saved £1,600. A maximum bonus of £3,000 is available on savings of £12,000 or more, in addition to whatever interest has been earned.

Even though the accounts won’t be available to open after November 2019, savers will be able to pay into them until November 2029, and must claim any bonus by the end of November 2030.

How popular is the Help to Buy ISA?

Research conducted earlier this year by the Society showed 43%[iv] of potential first-time buyers were currently saving in a Help to Buy ISA.

Government figures show that more than £189m has been paid in Help to Buy ISA bonuses to date at an average value of £836, supporting almost 170,000 property completions worth £25.3bn[v].

Louise Halliwell, senior savings manager at Yorkshire Building Society, said:

Whilst there are other types of savings accounts available to potential first-time buyers, the latest figures show the Help to Buy ISA has proven to be a simple way to save, earn a competitive rate of interest and get a 25% boost from the Government.

It has been a popular addition to the savings market – our research shows almost half of people saving for their first home are using, or plan to use, a Help to Buy ISA.

Anyone hoping to make the most of its benefits could choose to open an account before the scheme closes next year.

 

 

Help to Buy ISA

Who can open it?

First-time buyers aged 16+

How much can you save each year?

£2,400 a year

(£3,400 in first year)

Are there any deposit restrictions?

Max. £200/month
(up to £1,200 in first month)

What is the maximum bonus available?

£3,000

What is the maximum property price?

£250,000
(£450,000 in London)

When do you get the bonus?

On completion of a house purchase with a Help to Buy ISA balance of £1,600+

Are early withdrawals permitted?

Yes, but you will only earn the account interest, not the bonus

What if house purchase plans change?

You can withdraw the money, without the bonus

 



[ii] The scheme provides a bonus from the Government provided you have savings of at least £1,600. The bonus will be 25% of your savings up to a maximum bonus of £3,000 (equivalent to £12,000 savings).

 

[v] 169,980 property completions have been supported by a Help to Buy ISA since December 2015, up to June 2018.  Source: HM Treasury