When you look at the proposition in more detail, it appears to stand up. Accounts will be available through banks and building societies from Autumn 2015. The 25% bonus is generous; the Government will give a maximum of £3,000 when savers accrue £12,000.
Savers can open the ISA with an initial deposit of up to £1,000 and then can pay a maximum of £200 in per month, which will generate a £50 bonus, though there’s no minimum monthly deposit, so if they’re having a tight month they can take a break from the saving.
Accounts are limited to one per person, rather than one per home, which means those buying together can maximise their government bonus. It’s flexible too so the money won’t be locked away if ISA holders need to access it for other purposes.
And finally, the bonus will be available on houses priced up to £450,000 in London and up to £250,000 outside London, which will ensure that it is helping those who need it most.
At the other end of the spectrum, it’s good to see the Government also tackling the housing shortage by introducing 20 new housing zones, which will build 45,000 homes on brownfield sites across the country.
It’s not yet clear whether the use of the name ‘Help to Buy’ is inherently linked to its namesake scheme but either way, it is certainly doing what it says on the tin and will help many first-time buyers save for that all important deposit.
Charles Haresnape is managing director, mortgages and commercial Lending at mortgage lender Aldermore
For full details of the scheme, click HERE.
