Chancellor George Osborne’s announcement of a Help to Buy ISA is a great boost for first time buyers.
For every £200 an individual saves, the government will put in an extra £50, up to a maximum of £3,000.
The new ISAs, which will be available through banks and building societies, will be launched in the autumn and run for four years – but the chancellor has said people can start saving now and will still benefit.
The Help to Buy ISA will be available on homes up to £450,000 in London and £250,000 outside the capital.
Dave Bexon, Redrow’s Group sales & marketing director said:
“Today’s announcement of a special Help to Buy ISA is further evidence of the importance this government is placing on housebuilding to help lead economic recovery. It will be another important tool in helping first time buyers, by tackling the twin problems faced by people saving for their first home – the low interest rates on savings and the high deposits needed by most banks. The fact that government will add £3,000 to the funds of those who save £12,000 towards a deposit offers real encouragement to would-be home owners.
“All in all, there’s a strong recognition that home ownership is playing an important role in the recovery and that homebuilders like ourselves are creating jobs, making a very real contribution to helping tackle the country’s housing crisis and providing the homes that people want and need. Only last week several of our Help to Buy customers met with David Cameron and other senior government officials at 10 Downing Street and we also hosted ministerial visits to developments in Liverpool and Leeds. We look forward to sharing more about the Help to Buy ISA with our customers.”
Brian Murphy, Head of Lending at Mortgage Advice Bureau (MAB), comments:
“The Help to Buy ISA is a crowd-pleasing move and another sign of greater commitment to improving accessibility in the housing market. First time buyers will welcome the measure, but in many cases, their next step will be to ask which of the many schemes and incentives on offer is the best suited to their needs?
“Offering the savings bonus on purchases worth up to £250,000 outside London or £450,000 in the capital looks far more sensible than the maximum £600,000 limit that currently applies to house purchases through the Help to Buy equity loan or mortgage guarantee. The £600,000 cap has proved unnecessary for the vast majority of homebuyers using either scheme to secure a mortgage. The new ISA is a welcome innovation – but the fact that different rules and timescales exist for the various elements of Help to Buy has the potential to cause confusion, and first time buyers will want to understand how they work in tandem.
“We are sure to see more pre-election policy ideas to support first time buyers, and politicians must work closely with industry to ensure new measures are as clear and accessible to first time buyers as possible. Anyone confronting the array of choices is likely to find that expert advice is essential to make headway and ease their path towards homeownership.”