As asking prices for houses in England and Wales rise to a record high, prospective first time buyers who have carefully saved their deposits in Help to Buy ISAs are finding themselves priced out of the market. With the maximum threshold on houses that can be bought under the scheme set at £250,000 for homes outside London, and £450,000 in London, prices of two and three bedroom homes are rising above this cap in more and more areas. Research has shown that just one in ten three bedroom homes in London have an asking price that actually qualifies for the scheme.
The rise in price for starter homes will leave millions trapped in rented accommodation unable to afford to save enough for the substantial deposit needed. As the ISA bonus scheme was set up to aid first time buyers save for their deposit, this outcome is exactly the situation that the government was trying to eliminate. The Help to Buy ISA has previously been criticised as a quick fix solution that will only benefit those who are already better off, but more houses in general are needed throughout the country, especially ones that are affordable to those on an ordinary wage.
The average asking price for homes in England and Wales is currently 5.5% higher than this time last year, coming in at £310,471. As the referendum also makes for an uncertain future in the housing market, Help to Buy ISA holders can only hope house prices will soon settle in a region that fits the conditions that will allow them to claim their bonuses.
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