1. Only a few years ago, it was becoming increasingly difficult, some may say almost
impossible, for people to get on the property ladder and purchase their first home. The
property market became increasingly sluggish and many new housing developments ground
to a halt.
However, fast forward to the present day and the situation has changed significantly. People
are buying, development is happening on a major scale, and first time buyers are again able
to contemplate purchasing their very own property.
One of the big reasons in the kick-start of the residential property market has been the
Government’s Help to Buy scheme.
The introduction of this scheme in 2013, which offered a loan of up to 20% on purchases of
properties worth up to £600,000, proved instantly popular. Home owners and house builders
alike benefited from this scheme, with developments being keenly welcomed by people able
to buy.
Now, building on the success of Help to Buy, the Government has introduced the Help to
Buy ISA, which offers a savings boost of 25% to first-time buyers looking to purchase a
property worth up to £250,000.
Through the ISA, the Government will deposit £50 for every £200 you save, up to a
maximum Government contribution of £3,000. These ISAs are now readily available from a
range of lenders, and take-up is said to be very strong.
It is important to note that these accounts are available to each buyer, not each household,
meaning that if you are buying with a partner, you could receive a Government bonus of up
to £6,000 as a couple. You can open a Help to Buy ISA until November 2019, but can
continue to save beyond that date if you have opened one previously.
Once you have sufficient funds to be able to purchase your property and have begun the
conveyancing process, your solicitor will apply for your Government contribution on your
behalf, once you have told your bank or building society you are closing your ISA.
To qualify for a Help to Buy ISA, you must be a UK resident aged 16 or over and must be a
first-time buyer – that is you do not own, or have ever owned, a property.
The property you are buying must be in the UK and purchased with a mortgage. It must be
worth up to £250,000 – or £450,000 if you are buying in London – and it cannot be a second
home or a buy-to-let. It must be your home and place of residence.
These ISAs are available alongside other Government Help to Buy schemes, meaning that
the property market is now more accessible for first-time buyers than it has been for some
time.
Rukhsanah Haroon is a residential property specialist at Newcastle law firm Sintons.
To speak to her about this or any other matter, contact her on 0191 226 7924 or
Rukhsanah.haroon@sintons.co.uk.