Help to Buy ISAs – how have they helped the London property market?

Find out more

  • Government offer first time buyers a 25% top up on savings
  • Buyers purchasing London property with a price of up to £450,000 are eligible.

The UK government introduced Help to Buy ISAs in December 2015. Since then, it has been hailed as a success, helping over a thousand first-time-buyers to purchase homes. Over a million would-be buyers are still saving and will be able to buy their first homes by 2020.

Chloe Robinson, estate agent at Henry Wiltshire Bow, feels positive about the scheme. “Help to Buy ISAs can make a substantial difference to how quickly you can afford a deposit on a house in London,” she explains. “In addition, the current low interest rates make mortgages cheaper – home ownership is now becoming a realistic option for more people.”

How does a Help to Buy ISA work?

The government will give first time buyers 25% of the value of their savings towards the cost of their new home.

London property is more expensive but will also give you the best return on investment

Potential buyers saving for a home can open a Help to Buy ISA with most high street banks and building societies, depositing a minimum of £1,600 to get started. They can then top it up by up to £200 per month, until the ISA is worth a maximum of £12,000. If you are buying a home with someone else, he or she can also have an ISA, enabling you to double your savings towards a deposit.

On purchasing a house, the buyers’ solicitors will apply for the extra 25% from the government, which could bring the total up to as much as £15,000. This money does not have to be paid back at any time.

How does a buyer qualify for the ISA?

Anyone can open a Help to Buy Isa, but the savings must be used to buy your first home. You cannot buy your second home with it, and you cannot spend it on a holiday instead!

The government will only help if you are buying a home priced below £250,000 and £450,000 in London.

How does this help people buy property in London?

Buying property in London will always be more expensive than the rest of the country, but you can console yourself that you will get the best return on your investment in the long run. Even with the increased price band for London property, first time buyers will have to work towards a 10% deposit rather than a 5% deposit, as ISA limits are not different for London, even though the price of property is.

Many high street banks and building societies offer the Help to Buy ISA, and offer different interest rates. It’s a good idea to shop around, and make sure you’re getting the best rate of interest, so that your money will work just as hard as you do.

Buy property in Bow

Chloe Robinson and her team at Henry Wiltshire’s Bow office are experts in London property. To buy, sell or rent property in Bow, simply get in touch on 020 3696 9610.

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