George Osborne unveiled details of a new help-to buy ISA in today’s budget in a bid to help first time buyers.
Under the terms of the scheme first-time-buyers can receive a financial bonus of up to £3,000 each to put towards the deposit for their first home.
Savers taking part in this initiative will have their savings boosted with a payment from the government, paid to them at the time they purchase their first home.. The bonus on offer equates to 25% of funds saved, for example if £2000 is paid into the account, the government will top it up by £500.
The maximum amount that can be put into the Isa and is £12,000 – and the government’s maximum contribution of £3,000 will boost the deposit to £15,000 – but crucially this allowance is per person, so couples have the option to double up on these figures with a combined bonus of up to £6,000 on offer.
The payment will be made towards a first home but the government will not permit the scheme to be used for the purchase of a buy-to-let property, as the aim is to help first time buyers rather than existing landlords..
Stephen Noakes, from Lloyds Banking Group said: “We welcome the support the Help to Buy ISA will offer first time buyers and believe it provides a genuine solution to the challenge of raising a deposit. We know that this is the key barrier when trying to buy a first home and the Help to Buy ISA will reward positive savings behaviour and make a real difference in helping young people get onto the property ladder faster.
“The fresh support announced today combined with other Government schemes, such as Help to Buy, gives a much needed boost to first time buyers. We expect it could reduce the amount of time you have to save by just under a year.”
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