What is a Help to Buy ISA?
Since its launch back in 2013, Help to Buy ISAs successfully gave over 514,868 first-time buyers the opportunity to get onto the property ladder with additional financial assistance from the government.
Are Help to Buy ISAs Still Available ?
Unfortunately, the deadline for securing a Help to Buy ISA was the 30th of November 2019, which means that you can no longer open a new account. However, if you already have one, you can still continue using it.
Although new Help to Buy ISAs are no longer available, we’ve put together a guide to explain what Help to Buy schemes are and how they work for those who still have one and want to know more. We’ll also explore alternative options that are available for first-time buyers. How Much Can You Put in a Help to Buy ISA?
How Much Can You Put in a Help to Buy ISA?
If you’ve not yet paid into your Help to Buy ISA, you can pay an initial deposit of up to £1,200 for the fi rst month, which will also qualify for the 25% boost. After your initial payment, you can then follow it up with monthly deposits of up to £200.
If you'd be able to save more than this per month or would rather make one large deposit over lots of smaller ones, then something like a Lifetime ISA may be better suited to you.
The minimum you have to save before you can utilise your Help to Buy ISA is £1,600, giving you a £400 top-up, with an upper savings limit of £12,000 for a £3,000 bonus. Although this is less than the standard ISA limit of £20,000, the 25% government bonus is considerably more than what you would earn in interest with other savings accounts and is very useful in securing your first property.
What Property Can I Buy With a Help to Buy ISA?
The government bonus will only apply to houses under £250,000 unless the property is London-based, where the cap is set at £450,000.
This will potentially dictate the location of your property as well as its size, but for your fi rst property, it's a good idea to fi nd something that's manageable before diving into larger properties.
Can a Couple Use Both of Their Help to Buy ISAs to Buy a Property?
Couples are able to use both of their individual Help to Buy ISAs and capitalise on the separate bonuses, then pool them together—meaning you can effectively double the amount of funding the government will provide towards your home. However, it’s important to remember that the overall property value cap won't increase, so it's worth considering your options together.
Alternatives to Help to Buy ISA
Now that new Help to Buy ISAs aren’t available, it’s worthwhile exploring other options that offer similar benefits. Lifetime ISAs are a great alternative that give first-time buyers another route for saving for their ideal property and also offer a 25% government-funded bonus.
If the saving structure of the Help to Buy ISA sounded too restrictive, then the Lifetime ISA gives you more flexibility in when you can make deposits and isn't tied to a monthly limit.
Some specific regional banks and building societies are also offering their own savings accounts specialised for first-time buyers. These mainly feature a higher initial interest rate but forgo the government bonus and have certain catches, such as postcode catchments to limit who can apply. Doing independent research into these will give you a wider picture of the savings landscape so you can choose the ideal account for you.
Step Onto the Property Ladder With Berkeley Group
Take your first step onto the property ladder with Berkeley Group. With stunning homes available in sought-after locations such as Hertfordshire, London, Surrey, and Berkshire, we offer thoughtfully designed properties perfect for first-time buyers.
Plus, with tailored support and expert guidance, we’ll help make your home-buying journey smooth and stress-free. Find out more about Berkeley Group or get in touch for more information.