Help with a 'Help to Buy' ISA

jr2015

Hi there,

Like many, my wife and I have been waiting - since the first announcement earlier this year - to take out a 'Help to Buy' ISA.

However, now looking through the T's and C's, I've read that you can only get a mortgage up to the value of £250k outside London, and £450k inside London.

As we live in Surrey, and want our first property to be a small house, we're looking at properties of £300k - £350k. Frustratingly, we wouldn't be able to find anything to the value of £250k.

The obvious incentive is for each of us to take out a 'Help to Buy' ISA, but if we can't access the interest earned, because the value of our first buy would be more, then there's no point doing it.

Is this a common problem? I wondered if it's set at that limit - inside and outside of London - because most peoples first buys - particularly in the south of the country where it's expensive - would be 1/2 bed flats? (This is more of an assumption though.)

Any help would be greatly appreciated.

Cheers

smile88egc

If you can afford to buy a home that costs more than the national average as your first home, do you really need "Help to Buy"?

Should taxpayers be asked to subsidize your property purchase?

selement

Surrey won't be cheap. I'm expecting to get a 3 or 4 bed house in Birmingham using help to buy isa... Depends on developer but it's possible for less than 250k up here

Bluebirdman_of_Alcathays

smile88egc wrote: »

Should taxpayers be asked to subsidize your property purchase?

But that's the whole point of HtB?

Sure, the OP is struggling as they're too far from the M25 to benefit from the schemes rules, close enough that prices are inflated. But no need to play the "moral" card - there will be plenty of people getting subsidised housing via HtB mk I,II,III,IV....

Enigmadibs

This has also been a problem of mine when looking into the Help to Buy ISA.

I also live in the South East, but outside London, where 2 bed "starter" homes are currently selling for £230k+, and house price increases of 10% a year.

If I was looking to open a HTB ISA account with the aim of saving for a few years, there would be very few if any eligible properties in my area that would enable me to receive the ISA bonus.

Would it be likely that the scheme increase the max house price value limit over time?

jr2015

Rather than passing judgement on our financial situation and the morality of obtaining a HTB mortgage, and whether you think it's okay if my wife and I can even get a 'help to buy' ISA, subsidised from as you said, 'the taxpayer' (which I'd like to point out are also my wife and I), maybe you should take some time to read the post and offer well-meaning knowledge and advice.

Moving is an incredibly expensive task - although at 35 years old, we've both never undertaken it, because we've never had the means to do so. What with stamp duty, solicitors fees, moving costs etc, we need to find a property than we can grow into, rather than a property that in a very short period, is too small for us to start a family - it has to have longevity.

Now I'm sorry our jobs and family are based in Surrey, but that's the hand that was dealt to us. We also, rather annoyingly for us, don't have the opportunity to borrow money from our parents, as they don't have the ability to give it to us. So for the last 5 years have been saving to try and get a deposit to get on the property ladder. But neither are we financiers - my wife's a teacher and I work for a charity - so have been saving in a cash ISA which we've regularly moved, but interest rates have fallen below the rate of inflation.

My wife and I have discussed moving northwards, but as we want to have a child in the next few years - only when we can afford to do so - my wife wants to be nearer to her parents, who are elderly, retired, but able-bodied enough to help out with childcare - also an additional cost.

I don't want this to be a 'woe is me' post as every young couple in the UK is going through the same thing, but after 5 years of saving, we wanted to use the help to buy ISA to allow us to keep saving, obtain a larger deposit, and buy a moderately sized home that allows us to grow as a family.

jr2015

My last post was in reply to 'smile88egc's' post. Apologies, I'm new to forums and replying / responding.

Thanks to everyone else for offering advice though, we appreciate it.

psychological

Well said JR, buying a property is hard and if finally the odds are ever so slightly pushed in the favour of first time buyers, I feel everyone who can, should take advantage. I earn enough to pay extortionate rent in London for the past 10 years but simply because of a lack of deposit (and no bank of mum and dad), I am not trusted enough to pay what would be half that amount monthly against a mortgage.

psychological

That said, I'm looking to buy outside of London and £250k doesn't get you an awful lot unless you go way out. Hertfordshire seems to be the best bet so far for affordability with good connections to London.

_CC_

I'm pretty sure those limits were set at the time of the announcement.

Maybe the limit will be linked to property inflation, but clearly that wouldn't push it to your price range.

At that sort of price range, and given the time it would take to save up the maximum bonus, I can't see why it would make any notable impact on your finances. The maximum bones of £6k (£3k each) would take many years to achieve and would equate to 2% of the current purchase price of a £300k property.

The various HTB schemes are more a subsidy to existing homeowners than those using the schemes IMO, as they just provide more access to credit and funds, increasing demand and therefore prices.

dannim12345

As this kind of links to this question. IS it worth getting one of these ISA's even if you might not be able to take advantage of the bonus? I.e if you take it out too soon or buy over the limit, is the interest comparable to other saving accounts & do you still get the interest?