Date published: 9th March 2017

Finding your way through the range of discounts, deals and cash injections available to those struggling to save for their first home can be confusing.

This guide explains the rules surrounding the Government’s much-publicised Help to Buy ISA.

Who Qualifies?

You must be a first-time buyer aged 16 or over and the house you are buying must not cost more than £250,000, or £450,000 in London. You can use a Help to Buy ISA with any mortgage, it does not have to be a Help to Buy mortgage.

You will not qualify if you are going to rent out the property you are buying and you cannot purchase a home overseas.

How Much Can We Save?
  • A maximum £200 can be saved monthly plus a £1,000 initial deposit.
  • You must have saved at least £1,600 to qualify for the bonus the Government will pay
  • When the ISA balance is used to buy your first home the Government adds a bonus of 25%.
  • If you save the minimum amount of £1,600 you will receive a bonus of £400
  • The maximum you can save is £12,000 which would earn you a bonus of £3,000. If you want to qualify for the maximum bonus you would have to save for four and a half years.
What Is The Maximum Bonus If I Am Buying Jointly With My Partner?

Help to Buy ISAs are available to each first-time buyer, not each house. If you buy jointly with your partner and save £12,000 each you would receive a £3,000 bonus each, giving you a total of £6,000 towards the cost of your first purchase.

What Can The Bonus Be Used For?

Buyers are usually required to provide a deposit of 10% of the cost of the home when they exchange contracts and for most first-time buyers this all the savings they have to put into the purchase. The bonus cannot be used for this initial deposit, but can be used towards the total purchase price of your new home.

How Do I Obtain The Bonus?

When you request to close your Help to Buy ISA the Bank or Building Society will send you a Closing Document. Do not withdraw your savings before the account is closed because the bonus is calculated on closing balance. When you receive your Closing Document you must give it to your Conveyancer who will claim the 25% bonus from the UK Government.

How Can We Help?

Buying your first home can be both daunting and exciting, which is why we have an experienced team who can guide you through a maze of affordable housing schemes including shared ownership, Right to Buy, Forces Help to Buy and Help to Buy: ISA. Take your first step towards the property ladder by contacting a member of our team or read our online guide Help to Buy: ISAs.

It is important to budget for all of the costs involved in buying a home.

For further information, please contact the Conveyancing department and we will endeavour to answer all of your questions. Please click here for a call back or message us your enquiry.