More than one million people have made use of the government’s Help to Buy schemes, which were initially launched in 2013.
The initiatives are designed to help people save for their first home, with Treasury figures indicating over 259,000 completions have taken place using one or more of the Help to Buy schemes.
The data also revealed more than 215,000 first-time buyers are now on the housing ladder thanks to Help to Buy, and that more than £1.8bn has been saved by 868,240 first-time buyers who made use of the Help to Buy ISA product.
Philip Hammond, Chancellor of the Exchequer said: “This government is committed to helping working people get on the housing ladder. Our Help to Buy schemes are proving hugely popular across the country. More than a million people are now using them to help achieve home ownership, particularly first-time buyers.”
How does the Help to Buy ISA work?
The Help to Buy ISA is government-backed and will boost the savings of individuals by 25 per cent, up to a maximum bonus of £3,000. It has been very popular since its launch in December 2015, with the equivalent of 1,500 Help to Buy ISAs opened every day since its introduction.
The scheme is available through a number of banks, building societies and credit unions and are accessible by each first-time buyer, not per household. So, for those buying with a partner or friend, it is possible to access a bonus of £6,000 towards a first home.
Those accessing a Help to Buy ISA are able to deposit a lump sum of £1,200 and are able to save a total of £12,000 to access the maximum individual bonus of £3,000.
Once first-time buyers are ready to purchase their new home using the money saved in a Help to Buy scheme, it is important to inform the solicitor or conveyancer to apply for the government bonus, which will be added to the money being put towards the first home.
Under the conditions of the ISA, the government bonus must be included in the funds consolidated at the completion of the property, and can’t be used for the deposit due at the exchange of contracts, to pay fees or any other costs associated with the cost of a home.
First time buyers will be able to open a Help to buy ISA until 30 November 2019.
Other Help to Buy options
There are a number of other Help to Buy options available in the range of products developed by the government. The Equity Loan scheme sees the government contribute up to 20 per cent of the cost of a newly built home, meaning buyers require a five per cent cash deposit and a 75 per cent mortgage to make up the rest.
As part of the deal, buyers are not charged loan fees on the 20 per cent provided by the government for the first five years of owning a new home.
Figures from the Treasury revealed more than 112,000 completions have now taken place through the Help to Buy Equity Loan scheme.
The government also launched the Help to Buy Shared Ownership scheme to buy a share of a home and pay rent on the remaining share, again supporting people looking to get onto the property ladder.
If you’re considering buying your first property and need some help with your finances, use our mortgage calculator, created with the Mortgage Advice Bureau, to work out the best deal for you.