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Help to Buy ISA: the market’s best kept secret

Homebuyers throughout the UK are familiar with the benefits of Help to Buy, but another government-backed scheme is far lesser known and potentially an even better option for many first-time purchasers. The ‘Help to Buy ISA’ makes home ownership easier to achieve with up to £3,000 towards the cost of a deposit – and time is running out to take advantage. We explain the ins and outs of one of the market’s best kept secrets…

If you’re looking to purchase your first home and able to save at least £1,600 towards a deposit, it’s a wise move to put the money into a Help to Buy ISA. The government will add another 25% (tax-free) to your total deposit savings, so even if you’re unable to raise any more than the minimum £1,600, you’ll still get an extra £400. You start by putting in an initial sum of up to £1,200 and you can add up to £200 a month after that, with no obligation to deposit every month. You can keep adding savings until 30 November 2029 – when all Help to Buy ISA accounts close for contributions – but the state will contribute a maximum of £3,000, so only the first £12,000 is eligible for the bonus.

If you’re purchasing your first home with a partner, friend or family member, they can also open their own Help to Buy ISA (providing they’re a first-time buyer too) which means your bonus could be doubled to as much as £6,000. It’s a fantastic opportunity, but time is of the essence: the deadline for opening an account is 30 November 2019.

It’s important to note that the scheme applies a strict definition of eligible first-time buyers: it’s available to people over 16 who don’t own a property and have never owned an interest in a residential property (either bought or inherited) in the UK or abroad. It’s also worth bearing in mind that you won’t receive the bonus if you don’t use the savings to buy a property – the 25% is added at the point you use it to purchase your home (and all bonuses must be claimed by 1 December 2030).

Help to Buy receives a great deal of fanfare, and there’s no doubt that it’s been a great option for purchasers up and down the property ladder, but the Help to Buy ISA is an ideal choice if you need a flexible savings scheme that gives you substantial capital for the deposit on your first home. If that sounds like you, we can offer some simple advice: the sooner you open one, the better!

For further information about Help to Buy or Help to Buy ISA, please call Orion Homes on 01924 831030 or enquire here