First time buyers take note, help to buy ISA is now operationalJanuary 28, 2016
The help-to-buy ISA initiative , unveiled in Chancellor George Osborne’s budget last Spring, came into force in December 2015. The initiative will benefit first-time buyers, although it is also possible to open one of these ISAs if you are buying a property with someone who isn’t a first time buyer, though the non first time buyer will not be able to open one.
First time buyers can save up to £200 every month and the Government will add 25% on top of the monthly saving It is also possible to start off with an initial £1,000 which will have £250 added on top.. The overall minimum amount required to earn a Government contribution is £1,600 (earning a bonus of £400), and the overall maximum Government contribution is £3,000 (meaning an overall deposit of £12,000 to be saved). The account restrictions on a Help-to-buy ISA differ from a regular cash ISA and there will be a cap of £200 per month deposited into the account (on top of a limit of £1,000 initial deposit).
The Help-to-Buy ISA will be available through banks and building societies and the associated rates will be set by the individual banks. Banks and Building Societies currently signed up to the Scheme include Barclays, Lloyds Banking Group, Santander, Nationwide, Natwest and Virgin Money.
The bonus will be calculated and paid when you buy your first home. You will receive a voucher for the bonus which will be paid straight to your mortgage provider, ensuring that the bonus is only paid upon the purchase of a home. The bonus will only be available on homes worth up to £250,000 (or up to £450,000 in London) and there are no restrictions on buying a new build or second-hand home.
More Information on the Scheme is available at https://www.gov.uk/government/publications/help-to-buy-isa-factsheet