BUDDING HOMEOWNERS WON'T BE ABLE TO USE THEIR HELP TO BUY ISA FOR AN INITIAL DEPOSIT


  • George Osborne said scheme would provide state support for deposit
  • Loophole stops Government ‘bonus’ being paid out until sale is complete
  • Buyers will have to rely on loans from family to get purchase underway
  • It appears the Help to Buy Isa scheme is effectively rendered useless
Glen Keogh For The Daily Mail
More than half a million budding homeowners will not be able to use the Government’s much-publicised Help to Buy Isa for an initial deposit on a new house, it has emerged.
Despite former chancellor George Osborne insisting the scheme would provide direct state support for those saving for a deposit, a loophole stops any Government ‘bonus’ being paid out until the sale is completed.
The accounts, which were launched last year, were intended to help first-time buyers.
Former chancellor George Osborne insisted the scheme would provide direct state support for those saving for a deposit
Former chancellor George Osborne insisted the scheme would provide direct state support for those saving for a deposit
A maximum of £200 can be saved monthly, plus a £1,000 initial deposit – and when the Isa balance is put towards buying a house the Government adds a bonus of 25 per cent.
But after it emerged the bonus will not be paid out until the sale is closed, it appears the scheme is effectively rendered useless. Buyers will still have to rely on loans from family or friends to get the purchase underway.
After the claims were made in the Daily Telegraph, the Treasury has been forced to admit the clause was included to stop people benefitting from the bonus without buying a house.
Paid out on a minimum balance of £1,600 and a maximum of £12,000, the bonus can be as much as £3,000. But Mr Osborne’s plans to help pull 20-somethings from ‘generation rent’ appear to have failed.
A loophole in the scheme stops any Government 'bonus' being paid out until the sale is completed - effectively rendering it useless
A loophole in the scheme stops any Government ‘bonus’ being paid out until the sale is completed – effectively rendering it useless
The Help to Buy Isa and associated bonus can only be spent as part of future costs such as mortgage repayments. House buying expert Andrew Boast, of SAM Conveyancing, told the Daily Telegraph: ‘It is a scandal. The Government launched this scheme declaring it was to help people save the large exchange deposit required to buy a home.
‘But what first-time buyers are now being told is that they cannot use the bonus as part of this deposit.’
A Treasury spokesman said: ‘The Government has published clear guidance and the industry is fully aware that the bonus is only paid on completion. Since Mr Osborne announced the scheme, more than 500,000 savers have opened Help to Buy accounts

No comments

Powered by Blogger.