November 30th marked the last day for homebuyers to take advantage of the Help to Buy ISA scheme.
So, what exactly does this mean if you’ve already signed up but not yet bought? Or perhaps you’re looking for a similar initiative to help you on to the property ladder? Let’s find out!
What’s it all about?
The Help to Buy scheme is a government initiative designed to ease the financial burden for first-time homebuyers. The premise is simple: eligible candidates over the age of 16 open a Help to Buy ISA, start saving, then the government will boost your savings by 25%, up to a maximum of £3000 for savings of £12,000.
A minimum of £1600 of savings is needed to qualify for the bonus and for every £200 saved thereafter on a monthly basis, a bonus of £50 is given.
Who signed up?
The scheme was available on an individual basis and not per household, meaning if you planned to buy a property with a partner, friend or family member, you could have received a financial boost of up to £6000 towards your dream home.
The ISA scheme was also available from a number of banks, building societies and credit unions – a move designed to maximise uptake.
When you finally decide to take the plunge and purchase a property using the scheme, your solicitor will apply to receive the bonus money on your behalf and work out all the financials so you don’t have to.
So, is it all over?
Not for those who have already signed up. Despite scrapping this particular scheme for newcomers, those who currently have a Help to Buy ISA can still reap the financial benefits for a further 10 years by saving until November 30, 2029.
Following this date, all accounts will close and bonuses should be claimed by December 1, 2030.
Are there other schemes available?
The good news is: yes! The government hasn’t pulled the plug on financial assistance for first-time buyers entirely. There is also a system called the Lifetime ISA (LISA).
The LISA also offers a 25% savings boost of up to £1000 annually, as well as additional benefits such as a greater savings threshold, and the ability to use the funds for retirement purposes or the initial deposit for a property – an element the Help to Buy ISA didn’t offer.
To be eligible for a LISA first-time you must be aged 18 to 39, not have owned a property and be purchasing a residential property in UK that costs £450,000 or less.
As every person can have their own LISA, couples buying together can have one each
If you decide to make a withdrawal from your LISA and it’s not to purchase your first home or after age 60, a 25% government charge will normally apply.
One final thing: you need to have the LISA open for a year or more to be able to use it for a home.
If you want to have more information about the Help to Buy scheme please visit the Official Government Site .