TIME is running out for prospective first-time buyers to open a 'help to buy' ISA, tailored to help first-time buyers on to the property ladder.
The vehicle entitles savers to receive an additional 25 per cent bonus from the government towards their savings for the deposit for their first home, and means for every £200 saved the government contributes £50, up to a maximum bonus of £3,000 on savings of £12,000.
But this type of ISA, which was launched in 2015, is only open until November 30 and won’t be available to new savers after this date.
However, while the accounts must be opened before this deadline, the account terms and conditions of being able to save up to £200 per month will continue to apply after this date, and government bonuses will remain available until December 2030 (which means people don’t have to buy their first house in the near future to open an account but can plan for the medium to long term).
Since help to buy ISAs were launched, more than 286,000 people have opened an account and availed of the bonus, while the average age of first time buyers, at 27, is three years younger than the national median age of 30.
Declan Moore, operations director at Progressive Building Society, urged first-time buyers to act now to avoid missing out on the government offer.
He said: “The help to buy ISA provides considerable financial support for the average first-time buyer in saving to get onto the housing ladder sooner than they might otherwise be able to.
“While the bonus must be used towards a deposit, our message is that you don’t have to be planning to buy your first house immediately in order to open an account.
“Furthermore, two people buying a house together can both open this ISA, meaning they could receive double the bonus. There is no catch other than ensuring that each account’s closing balance is between £1,600 and £12,000, so we would urge first-time buyers to take advantage while they still can.”
He added: “Saving for the deposit remains the biggest challenge for those hoping to secure a home of their own and this particular ISA can go some way towards making this slightly easier for first time buyers.
“We are dedicated to supporting young people in saving for a house deposit and to help them achieve their dream of home ownership. We're keen to ensure that as many first time buyers as possible have the opportunity to benefit from the government support before the initiative runs out, so are offering a £750 mortgage cashback to anyone who takes both a help to buy ISA, and their first mortgage, with the Society."
