HELP TO BUY ISAS – QUARTERLY STATISTICS

More than 1.2 million first-time buyers have opened a Help to Buy ISA account.

Latest Government statistics also show that:

  • Since the launch of the Help to Buy ISA, 169,980 property completions have been supported by the scheme – up 23,227 since the previous quarter.
  • 225,618 bonuses have been paid through the scheme with an average bonus value of £836. The total value of the bonuses paid in this period was £189 million. These were used to finance properties worth £29.4 billion in total – up £4.1 billion since the previous quarter.
  • The highest proportion of property completions with the support of the scheme is in the North West and Yorkshire and The Humber, with a lower proportion in the North East and Northern Ireland.
  • The mean value of a property purchased through the scheme is £172,787 compared to an average first-time buyer house price of £193,006 and a national average house price of £228,384.
  • The median age of a first-time buyer in the scheme is 27 compared to a national first-time buyer median age of 30.

What is the Help to Buy ISA?

The Government introduced the Help to Buy ISA in the 2015 Budget. It’s available to UK residents over the age of 16 for a temporary period of four years, which started in December 2015 and ends in November 2019.

Savers can open accounts with an initial deposit of up to £1,200 and are then able to save up to £200 a month. They can receive a tax-free Government bonus equal to 25% of the amount saved (including interest) when funds are paid on completion of the purchase of a first home costing up to £250,000 (£450,000 in London).

The Government contribution is capped at an overall maximum of £3,000 (ie. on £12,000 of savings) and subject to a £400 de minimis amount, meaning that savers must save a minimum amount of £1,600 to receive any bonus.

Savers, can’t have another active cash ISA in the same tax year. If they have opened a cash ISA the same tax year, they can still open a Help to Buy ISA but will have to transfer £1,200 from their cash ISA to their Help to Buy ISA, and the balance of their cash ISA to another account. They can still save into a stocks and shares or portfolio ISA.

Help to Buy ISA account holders can continue saving into their account until 30 November 2029 when accounts will close to additional contributions. The Help to Buy ISA Government bonus must be claimed by 1 December 2030.

First-time buyers (and others saving for the long term) can also save through the Lifetime ISA, which enables those between the ages of 18 and 40 to save up to £4,000 in each tax year with the added benefit of the government providing a 25% bonus on the contributions paid in a tax year at the end of that tax year.

The Treasury also published a press release, which highlights that over 458,000 completions have taken place using ‘one or more of the Help to Buy schemes’, and that the average house price purchased through the ‘schemes’ is £201,881. These figures are different to the above, as they incorporate statistics from other Help to Buy schemes, such as the Mortgage Guarantee scheme and the Equity Loan scheme, as well as the above Help to buy ISA scheme statistics.

 
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