29 Aug 2019 Time is running out for potential first-time buyers to take advantage of free money when they take the first step on the property ladder, as the deadline for opening a Help to Buy ISA looms.
The ISAs were introduced in December 2015 to help first-time buyers saving for their first home by giving account holders a 25% government bonus. Savers can deposit a lump sum of up to £1,200 in the first month of opening the account and up to £200 each following month, up to a maximum balance of £12,000.
However it closes to new applicants on 30 November 2019, meaning would-be homeowners have just three months left to open an account.
Louise Halliwell, senior savings manager at Yorkshire Building Society, said: “Help to Buy ISAs have long had their supporters and critics but for anyone considering opening one to take advantage of the available bonus, time is running out.
“Buying a first home can be expensive so the bonus is likely a welcome relief towards new furniture or other new-home expenses for those who take steps now to open one.”
Anyone who opens an account before the November deadline can continue to make deposits until 1 December 2030, but any bonus must be claimed before this date.
Data shows more than 310,000 first-time buyers have used the savings account since it launched, and despite not receiving the government bonus until the property transaction has completed, buyers have received a £920 boost to their pot on average.
Louise added: “For anyone looking to save for a house and who doesn’t currently save money regularly, it could be daunting to know where to start.
“Building a healthy savings pot for your first home doesn’t have to be difficult though. Small changes such as paying money into a savings account regularly, for example by setting up a standing order, can be a good habit to build.
“Likewise, splitting your income into three manageable chunks could also help, with 50% allocated to essentials such as rent and bills, 30% spent on enjoying life and 20% of your salary being put into savings.
“Ultimately, no matter how little you manage to put away each month, it could make a big difference to your savings pot for your first home in the long-term. Above all, little and often saving is better than no savings at all.”
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