How has the Help to Buy ISA helped buyers?

How has the Help to Buy ISA helped buyers?

The Help to Buy ISA was launched last December to much fanfare from the government – the latest of their flagship schemes to help first-time buyers onto the property ladder – but has it actually had any impact?

The government's latest figures would suggest so, with over 550,000 prospective first-time buyers opening up a Help to Buy ISA since they launched.


The accounts, aimed squarely at first-time purchasers, enable people to save money without having to pay tax on interest earned, while the government will boost your savings by 25% when you decide to buy your first home. So, to put this into context, for every £200 you save, you'll receive a government bonus of £50. The maximum government bonus that can be received is £3,000.


The Help to Buy ISA is also available to each individual first-time buyer, not per household. So, if you are part of a couple looking to buy their first home together, you can both open Help to Buy ISAs separately and receive a government bonus of up to £6,000 for your first property.


Most banks and building societies offer the Help to Buy ISA, all with different interest rates.


Some 2,090 bonuses have been used between December last year and May this year, with the average value of each bonus being £421. In total, 1,049 properties were bought by savers, with the highest levels of interest coming from buyers in Yorkshire and the North West.


Overall, more than 160,000 completions have now taken place under the various Help to Buy schemes, with 80% of these made by first-time buyers. More than half of Help to Buy completions have been for new build homes, the government figures reveal, while 94% have taken place outside London.


Since the Brexit vote the government have been keen to reassure first-time buyers that all elements of Help to Buy will remain unaffected by Britain's decision to leave the EU.


While Help to Buy isn't without its vociferous opponents, who argue that its mortgage guarantee and equity loan initiatives are still out of reach to the vast majority thanks to high house prices, there does seem to be evidence to suggest that many first-time buyers have been helped by the scheme. Claims that the government's flagship scheme hasn't been an overwhelming success could be justified, but the figures would suggest that it's not a complete and utter failure – or a useless gimmick – as some of its more fervent critics have suggested.


The Help to Buy ISA, in particular, has clearly piqued the interest of first-time buyers. The Lifetime ISA, another part of the government's plans to help drive up home ownership, will be introduced in April 2017, while Shared Ownership and Right to Buy schemes are also still in place.


However, there is evidence to suggest that homes in many parts of England are too expensive for the Help to Buy ISA scheme, and that would-be first-time buyers are being priced out of a scheme that is supposed to be helping them. This suggests that much more still needs to be done to ensure that there are truly affordable homes for the growing number of first-time buyers.