Help to Buy ISA, will it work?

Announced in the 2015 Budget a saving scheme to help first time buyers get on the property ladder. Will it work?

On the face of it, it looks a good scheme. A savings account specific to providing a deposit for property purchase with a cash bonus of between £400 and £3,000, dependent upon the amount saved. Savings can commence at the age of 16 which, if maintained until the “post-university/got a job now” years could provide sufficient funds for a modest first home deposit.

However, with a maximum monthly investment of £200, even with the government bonus, this is at least an 8 to 10 year savings commitment to produce a sufficiently large deposit to satisfy most lenders.  Would the commitment be there?

Also, with even a five year plan, would the savings plan be chasing a continually rising market without ever quite reaching it?

However, there is nothing wrong with encouraging responsible savings. And it may reduce the amount of later-life loans taken out by parents desperate to help their children.

Time will tell whether this has any measurable effect on the fist time buyer market.



About the author

Kitsons Solicitors - Sally Groom

Sally GroomAssociate

Sally is an Associate in our Residential Property team in Torquay

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