Help to Buy ISA - 1 December

mayonnaise

Just a friendly reminder.
The Help to Buy ISA is launching in 3 weeks time, 1 December 2015.
http://www.helptobuy.gov.uk/other-housing-options/help-to-buy-isa

Pretty good scheme, a couple saving 24k (12k each) in such ISA will receive a bonus of 6k.
Free money, not bad.

Participating Banks and Building Societies: https://www.gov.uk/government/news/banks-and-building-societies-sign-up-to-offer-help-to-buy-isa

chucknorris

Maybe I missed this, but I couldn't see it stated anywhere, is this part of the current £15,240 annual ISA limit, or is it in addition to it? I'd guess that it is part of the overall allowance.

Graham_Devon

chucknorris wrote: »

Maybe I missed this, but I couldn't see it stated anywhere, is this part of the current £15,240 annual ISA limit, or is it in addition to it? I'd guess that it is part of the overall allowance.

You can't run a Cash ISA alongside this. It's one or the other.

As for the uptake - there has been very little interest so far. Some lenders appear to be pulling out already (namely HSBC were on the radio a couple of months ago around budget time saying theres no interest and it's not worth it....whether they will go ahead now remains to be seen).

The ISA's themselves were supposed to be available by now, but were put back until December. Not sure why.

CLAPTON

seems a bit of a useless product

you can only save 200 per month (plus a staring amount of 1000
so after 1 year a max of 3,400
and then 2,400 per year max

to get to a 20k deposit will take a long time

of course you 'lose' your normal 15k ISA allowance unless B Socs allow you to 'share' the allowance between different ISAs (like Nationwide)

another useless government nonsense

dinkylink

For anyone looking to buy their first house it would make sense to use this scheme.


But in reality all this will do will increase house prices slightly without solving any of the issues causing HPI. So people that use the scheme will be no better of in real terms, and those who don't be slightly worse off.


And if you want to be saving a deposit for a house I would suggest you would need to save a lot more than £250 per month with bonus (eg 2, 3 or 4 x as much) to be making it worth your while.


Still I suppose you can just add this £250 to any other money you put in another savings account.


The fact that it means you can't also put money into another ISA doesn't really make any difference since the government removed the first £1,000 of savings income from income tax.

mayonnaise

CLAPTON wrote: »

seems a bit of a useless product

you can only save 200 per month (plus a staring amount of 1000
so after 1 year a max of 3,400
and then 2,400 per year max

to get to a 20k deposit will take a long time

So, a couple saving the maximum for just 2 years would have 11.6k, topped up to 14.5k by the scheme, which would already be way more than a 5% deposit on the average UK home. Useless?

CLAPTON wrote: »

of course you 'lose' your normal 15k ISA allowance unless B Socs allow you to 'share' the allowance between different ISAs (like Nationwide)

another useless government nonsense

The target audience is first time buyers, unlikely to have vast amounts of cash sloshing around in ISAs.

mayonnaise

Graham_Devon wrote: »

The ISA's themselves were supposed to be available by now, but were put back until December. Not sure why.

Nonsense.
HTB ISA's were announced in the Chancellor's March budget statement, he stated he'd like to see it in place this autumn.
In July, the official start date of 1 December was announced.

Anyway, let's see what MSE Martin thinks about HTB ISA's...

...even though cash ISAs let you save more, getting a Help to Buy ISA is a no-brainer, as no interest rate comes close to the 25% the Government will add to it.

Thanks Martin. :money:

http://www.moneysavingexpert.com/savings/help-to-buy-ISA

MARTYM8`

I do think the whole thing is being made ridiculously bureaucratic when you come to claim your bonus.

Apparently you cannot just claim the bonus yourself and direct the funds from your help to buy ISA to your mortgage lender yourself to reduce your mortgage – as say an ISA transfer would work. No you have to get a certificate from your help to buy ISA provider, give this to your solicitor, the solicitor then applies to the government for the bonus on line and then the solicitor (not you) receives the bonus at a date of their choice?

If your purchase falls through before completion your solicitor will be required to give you a document called a purchase failure notification confirming the purchase didn’t complete. You then have to reopen another help to buy ISA account and redeposit your funds – with the solicitor having to refund the government the bonus?

What a performance!


https://www.gov.uk/government/news/help-to-buy-isa-6-things-you-might-not-know

Madglover

Daft question but I intend to buy a house in a year or so. Depending on how saving and job progression keeps going.

Do you need to have proof of your deposit before you can buy a house? As surely I won't be able to, all I will be able to do is show how much I have in Account A "regular account" Account B "help to buy ISA" which they will multiply by 1.25?

I know you have to go through loads of credit checks to actually borrow a certain % of a house at a particular rate etc but nobody actually says much about what you do with the deposit.

setmefree2

mayonnaise wrote: »

The target audience is first time buyers, unlikely to have vast amounts of cash sloshing around in ISAs.

But their parents and grandparents might.

irrationalactor

I can't decide if this is worth it.

I currently save a lot more than £200 a month. But no other savings account is going to give me 25% over four years.

Giving up your ISA allowance is a huge deal. The tax treatment of non-ISA savings might be favourable at the moment, but there's no guarantee that that won't change again, and money in an ISA has got to be safer from the taxman than money outside of one.

I think all of these schemes just increase house prices - I'd refuse on principle except I think I might have to join this one in order to keep up.

Delaying demand for another five years is going to be problematic - many of us are already running out of time.

It's interesting that saving the full £15k takes you up to 2020, when the next election is. I suspect Osborne is trying to do some electoral engineering. Will it work? Or will there be a large number of frustrated potential first-time buyers, clutching their £15k deposits, finding that £15k is worth nothing as house prices will have risen another £150k in the meantime?