As part of the most recent Budget, George Osborne announced the introduction of a Help to Buy ISA designed to help first time buyers save for a deposit. For every £200 pounds that is saved in the ISA, the Government will add in £50. Once savers are ready to buy a property and withdraw the funds, the Government will give the bonus of 25% of the total account balance, with the bonus capped at £3000.
There are certain conditions on the properties that first time buyers can purchase, namely that the money can only be used in purchases on properties of £250,000 or less (London has a higher cap than the rest of the UK).
Nevertheless, first time buyers in the Greater Manchester area will really be able to take advantage of this measure which is set to launch in Autumn 2015.
Speaking to Mike Wilson, director of Philip James Wilson in Heaton Moor, he felt the announcement was really positive, “This is more excellent news for the already invigorated housing market; everyone knows that if we can help more first time buyers then the whole chain upwards becomes much busier.”
“We have seen a great resurgence recently in the Heatons,” Mike said, “but this has now spread to the more first time buyer focused markets such as Reddish and Denton.”
“It’s a very clever scheme which really encourages first time buyers to save: many are already but this will accelerate the saving process. I think it may also encourage other relatives to assist rather than it being down to just one relative such as the buyer’s parents.”
The Help-To-Buy ISA is limited to one account per person, so two or more people buying together can have their own accounts and receive their own government bonus.
Savers can also make an initial deposit of £1,000 upon opening the account as well as the normal monthly savings. The accounts will be available from Autumn 2015 through banks and building societies for 4 years only. Once opened, the accounts will have no limit on how long people can save for.
We at Philip James think this is a very positive move for first time buyers and hope the initiative is successful.