First-time buyers have been given a generous boost by the Chancellor in the Budget with a Help to Buy Isa.
The scheme announced by George Osborne - which will see first-time buyers given £50 for every £200 they save for a deposit - has widely been welcomed as an incentive to save.
But concerns have been raised about the need for it to be “robustly policed” amid fears savers could end up spending the cash elsewhere.
One Indusryy pundit said, "More first-time buyers say finding the deposit is a bigger problem than finding the monthly payments and so the Help to Buy Isa will bring forward the dream of home ownership for many. It will act as an incentive to save, just as when an employer at least matches any personal pension contributions it incentivises employee pension contributions.It will need to be robustly policed to make sure the savings are not used for other purposes.”
The scheme announced by George Osborne - which will see first-time buyers given £50 for every £200 they save for a deposit - has widely been welcomed as an incentive to save.
But concerns have been raised about the need for it to be “robustly policed” amid fears savers could end up spending the cash elsewhere.
One Indusryy pundit said, "More first-time buyers say finding the deposit is a bigger problem than finding the monthly payments and so the Help to Buy Isa will bring forward the dream of home ownership for many. It will act as an incentive to save, just as when an employer at least matches any personal pension contributions it incentivises employee pension contributions.It will need to be robustly policed to make sure the savings are not used for other purposes.”
While the scheme addresses the issue of saving for a deposit, it fails to help those struggling to get a mortgage.
The first-time buyer bonus is limited to £3,000 on £12,000 of savings and a person can only open one account. But the scheme is limited to one per person rather than per home and so those buying together can both receive a bonus.
There is also a cap on the price of properties that the bonus can be used to buy - £450,000 in London and £250,000 outside of the capital.
Each bank or building society offering a Help to Buy Isa will offer their own interest rate. The scheme will be available from this autumn.
The first-time buyer bonus is limited to £3,000 on £12,000 of savings and a person can only open one account. But the scheme is limited to one per person rather than per home and so those buying together can both receive a bonus.
There is also a cap on the price of properties that the bonus can be used to buy - £450,000 in London and £250,000 outside of the capital.
Each bank or building society offering a Help to Buy Isa will offer their own interest rate. The scheme will be available from this autumn.
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