Help to Buy: ISA launches
The Government’s Help to Buy ISAs launch today and aim to help first time buyers by giving a 25% bonus on savings towards buying a house up to a maximum of £3,000 in the hope it will help more first time buyers onto the property ladder.
Prospective buyers will be able to save £1,200 in the first month with a maximum of £200 in each subsequent month, with the task of processing the bonus assigned to the conveyancer.
When the buyer closes their account their account provider sends them a “Bonus Approval Notification” insructing them as to what details need to be provided to the account’s administrator via the Help to Buy: ISA website and where to send copies of the Land Registry title “when practical”.
However property lawyers are only permitted to charge a maximum of £60 including VAT for the service and it remains to be seen whether the work can be completed in a timely manner.
The scheme is only available for homes worth up to £250,000 or up to £450,000 in London for first time buyers and does exclude buy to let mortgages. Several providers have already announced their intention to provide the ISAs, including Barclays, Lloyds Banking Group, Nationwide, NatWest, Santander, Aldermore and Virgin Money.
According to YouGov research performed on behalf of Aldermore, Almost half (48%) of the UK believe the introduction of the Help to Buy: ISA will have significant benefits, compared to 27 per cent who don’t think it will.
Charles Haresnape, Group Managing Director, Mortgages Aldermore, said: “Aldermore’s launch of the Help to Buy ISA further underlines our commitment to helping first time buyers get on the housing ladder, and the government’s increased support for those struggling to save a deposit will be a positive influence on the market.
“As part of both the Help to Buy mortgage guarantee and equity loan schemes, Aldermore is proud to support customers who are looking for their first home and support initiatives such as this across the board, lowering borrowing age limits and expanding the eligible family members for our Family Guarantee mortgage product in order to provide tailored finance options.
“Aldermore’s statistics show that the Help to Buy scheme has functioned as planned, with our average applicant for Help to Buy a first-time buyer from the North West, and the Help to Buy ISA will be another valuable resource for those looking to buy their first home.”