ISA save to Buy and Shared Ownership 22 November 2015 at 12:27PM edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings 8 replies 1.2K views

mjacomprar

Hello,

I'm trying to make sense of the current schemes in buying a house, first time.

I am a teacher, a key worker, currently working in Inner London.
I have a large student loan which I have chosen to not pay off all at once and approx. the same amount in savings. My savings need to generate interest for me!

I do not own a house. I'm looking to buy a house, as an investment, using my savings.

1. Should I move my ISA money to Save to Buy ISA?
2. If I have a Save to Buy ISA can I still apply for Shared Ownership?
3. Is the bonus only applicable to people buying a house in London?

I would appreciate any help.
Thank you

Archi_Bald

Is the HTB ISA FAQ of any help?

eskbanker

Perhaps your research has been affected by looking at the wrong thing - Save To Buy is the name of a Nationwide ISA product, but you're probably actually looking for information about Help To Buy, a government-backed scheme starting next month. In addition to the document linked by Archi above, there is also an informative MSE article to help you find out more....

jimjames

Does the Help to buy ISA allow you to buy a house for investment and not live in it? Presumably it only is permitted for residential mortgages not BTL

eskbanker

jimjames wrote: »

Does the Help to buy ISA allow you to buy a house for investment and not live in it? Presumably it only is permitted for residential mortgages not BTL

As per the FAQ that Archi linked to:

Do I have to live in the home I am buying?
Yes. This must be your only home, and cannot be rented out or used as a holiday home.

Not sure how enforceable that actually is though, perhaps they'll send inspectors round for random unannounced visits?!

Archi_Bald

eskbanker wrote: »

Not sure how enforceable that actually is though, perhaps they'll send inspectors round for random unannounced visits?!

HMRC will know about the property purchase details as they have access to the land registry data. HMRC will also know, or can find out, what type of mortgage you have. If you let your property via an agency, the agency will have told the HMRC about it as they are legally compelled to do so. HMRC can check the Electoral Register to see who lives at an address. You'd be surprised how much HMRC know, or can find out, about you and your income.

I suppose they also have your address - if not from their own records, then from your employer and/or your bank.

It would be pretty stupid to make a false declaration for the sake of max £3K.

eskbanker

Archi_Bald wrote: »

It would be pretty stupid to make a false declaration for the sake of max £3K.

Agreed! Just to be clear, I wasn't suggesting that, just musing about how it would actually be policed - for one thing there will presumably need to be some sort of time limit, as it would obviously be bucking the system to rent it out within a few weeks after buying but unreasonable to be forced not to for, say, several decades....

mjacomprar

Thank you for all the comments and links. I hadn't checked back in recently. It seems you only use this scheme to buy a house you really want are going to live in! Fair enough!

Rich2808

mjacomprar wrote: »

Thank you for all the comments and links. I hadn't checked back in recently. It seems you only use this scheme to buy a house you really want are going to live in! Fair enough!

You only have to meet the conditions when you take out your first mortgage and draw down the HTB isa bonus from the government via your solicitor.

So you could buy a house with the intention to live in it - get a residential mortgage and then in due course convert that to a buy to let mortgage.

The scheme can also be used for shared ownership schemes - as long as you buy your part share from the HA/developer using a mortgage. And it does apply outside London - but the property purchase limit is lower (£250k vs £450k).