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Don't miss the Help to Buy ISA Deadline - 30 Nov

Should you open a Help to Buy ISA – Deadline 30th November?

Monday 11 November, 2019

Several of our clients have asked – should I open a Help to Buy ISA before the scheme closes on 30th November?

Thomas Wheatley, member of the Thomas Oliver mortgage broking team reviews whether first time buyers should open a Help to Buy ISA before the scheme closes at the end of November.

The Help to Buy ISA scheme is a way the government assists first time buyers saving for a house deposit. An eligible person can open an account with a maximum initial deposit of £1,200 and then a maximum monthly deposit of £200. When you come to purchase your property, the government will give you a 25% bonus for funds held in the account up to a maximum of £3,000. This means that once you have saved £12,000 you are eligible for the maximum bonus. The property that is being purchased must be valued at £250,000 or less if you are purchasing outside of London, or less than £450,000 within London.

Thomas Wheatley, Mortgage Broker in Tottenham, North London, said:

‘This scheme is coming to an end at the end of this month, so from the 1st of December you will no longer be able to open a Help to Buy ISA account. However, if you already have an account open this will remain valid until 2030. Therefore, I would suggest any prospective first-time buyer opens an account prior to the deadline at the end of the month even if they aren’t ready to start saving. As once the account is open, you can save into it until 2030 even if you delay starting to save. It is an easy way to save for a deposit as you don’t have to put in the full £200 each month, you can put in as much as you can afford. You can open a Help to Buy ISA account with as little as £1. By opening a help to buy ISA now you will still be entitled to receive the 25% bonus when you purchase your property. However, it is worth remembering that the bonus cannot be used towards solicitor or agent fees or the deposit on exchange. According to the Evening Standard the average first-time buyer has a 15 per cent deposit saved for an average priced first home in London. This is £63,000 for a property worth £420,000.’

Anyone opening a help to buy ISA has been able to afford a property earlier

According to The Evening Standard Homes & Property section the government has paid more than 225,000 bonuses since 2013 and that means that first-time buyers who have paid into a help to buy ISA are able to purchase a property on average three years earlier than people that don’t save into it.  

Thomas Wheatley, Mortgage Broker in Tottenham, North London, continued:

‘The Help to Buy ISA has been a really good way for first-time buyers to save for a deposit on their first home, although in London it still equates to a small percentage of the average deposit required to purchase a home. The help to buy ISA is good as it offers an incentive for first-time buyers to save for their first home. We recommend that anyone who is considering purchasing a home in the near future gets mortgage advice as soon as possible. Our qualified mortgage brokers can review your own financial circumstances to see whether it is worth you saving into a help to buy ISA before the scheme closes. However, you will have to act quickly to take advantage of this scheme. Please contact our mortgage brokers now on 01707 872000 for more information. We offer a free initial mortgage consultation for first time buyers. We can review the mortgage market for you to determine the best mortgage product for your financial situation. We also review your financial circumstances and discuss your income, expenses and savings. Once we have this information, we can give you an indication as to how much you will be able to borrow so you know the price range you can afford.’

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