500,000 open Help to Buy Isas for first-time home purchases

Updated

More than half a million people have opened Help to Buy Isas, which give aspiring first-time home buyers a helping hand towards saving for a deposit, according figures from the Treasury.

Launched on December 1, the Isas offer savers a Government bonus of up to £3,000 to help people save for their first home.

Since the launch, 1,490 property completions have been supported by the scheme. Some 2,090 bonuses have been paid with an average value of £421.

The highest proportions of properties being snapped up with the support of the scheme have been in the North West of England and Yorkshire and the Humber, which accounted for 14% and 12% of completions respectively.

Scotland has accounted for 10% of property completions, Wales has 7% and Northern Ireland 2%.

The average value of a property purchased through the scheme is £163,821.

The typical age of a first-time buyer in the scheme is 29, compared to with a national average of 30.

People aiming to get on the property ladder can put up to £200 a month in a dedicated Help to Buy Isa that the Government will top up by 25% - meaning a £50 bonus for every £200 saved.

To get the maximum Government bonus of £3,000, someone will need to have saved £12,000.

To kick-start their account, first-time buyers can open their account with a one-off lump sum of up to £1,000 in addition to the monthly £200 maximum deposit.

The rates offered by savings providers have compared well with the Isa market generally - although there was disappointment recently when Halifax and Santander, which had been offering market-leading rates of 4%, both chopped their rates.

Homes bought under the scheme can have a purchase price of up to £250,000, or £450,000 in London. The scheme will be open to new savers until November 30 2019. Account holders must claim their Government bonus by December 1 2030.

Chancellor George Osborne said: "It's hugely encouraging that over 500,000 people have already opened Help to Buy Isas."

There have been suggestions that the country's vote to leave the EU could give some first-time buyers more opportunities in the housing market in the coming months, as other potential buyers sit it out while they wait to see what happens to the wider economy.

Some experts have also suggested that mortgage rates, which have already been at record lows, may edge down further as swap rates, which lenders use to price their loans, have been falling recently.

Danny Cox, a chartered financial planner at Hargreaves Lansdown, said: "For the time being, H2B (Help to Buy) Isa is a no-brainer for those saving toward their first home."

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