The Government-backed Help to Buy ISA, which helps first-time homeowners get onto the property ladder, closes on 30 November.
Help to Buy ISAs are available to anyone with as little as £1 to save who is aged 16 or over with a National Insurance number and does not own a property. Every amount saved by the individual is boosted by 25 per cent by the Government, which means that for every £200 the individual saves, they get a bonus of £50.
The minimum Government bonus is £400, meaning that individuals need to have saved at least £1,600 into their Help to Buy ISA before they can claim their bonus. The Government’s maximum bonus is £3,000 once £12,000 has been saved.
For most first-time buyers, saving enough money to put down a deposit is the hardest part of buying, as while they are saving, they have to live, often paying rent. Therefore, the bonus of what is effectively free money is very useful.
This is borne out by the fact that Barclays alone has seen a four-fold increase in the number of applicants in the Help to Buy ISA scheme between September and October this year.
In order to benefit from the ISA, the home that is eventually bought must be in the UK, have a purchase price of up to £240,000, or £450,000 in London, be the individual’s only home and the bonus money must be purchased with a mortgage.
However, although the scheme is set to close on 30 November, savers can still open the Help to Buy ISA up until midnight on the closing day and save for their first-time buyer bonus until 30 November 2029.