The beginning of December 2015 saw the launch of a new Government backed scheme aiming to help those trying to get on to the property ladder for the first time.
People struggling to save for their first home are now being offered a help-to-buy ISA which will give them a cash boost towards the deposit on their first home.
As with the traditional cash isa, interest will be free of both income and Capital Gains Tax, but the really good news is that the Government will also top up the savings in these accounts.
How does it work?
When an account is opened a lump sum of up to £1,000 can be deposited. Following this, payments of up to £200 per month can be made into the account until the account reaches a maximum of £12,000. The government will add 25% to the total (up to a maximum of £3000). The bonus is paid on the total amount in the account and will be paid to your solicitor at the appropriate time in the conveyancing process.
As the account can only be opened by individuals, if you are looking to buy a property as a joint venture then you will need two separate help to buy accounts. This means however, that the total bonus available to joint purchasers is £6,000!
In order to be eligible you must be a first time buyer and aged over 16. You can use it to buy any home worth under £250,000 (or under £450,000 in London) and it can be used with any mortgage.
This Government top up of up to £3000 per person could be the key in the door for many first time buyers with the help to buy isas doing their bit to make the new home buying incentive as appealing as possible.
It’s certainly beginning to look a lot like Christmas for First Time Buyers!