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MSE News: Couple from Colchester bag £800 between them via Help to Buy ISA

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Former_MSE_Nick
Former_MSE_Nick Posts: 463 Forumite
I've been Money Tipped!
edited 9 February 2016 at 6:24PM in ISAs & tax-free savings
A MoneySaving couple from Colchester have told how they became two of the first people in the country to benefit from the Help to Buy ISA scheme after exchanging contracts on a house in Colchester.
Read the full story:
'First Help to Buy ISA bonuses paid out as couple from Colchester bag £800 between them'
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  • [Deleted User]
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    Only available for 2 months and already the obvious flaws in the scheme have come to light. People who have already saved the deposit are using it as a free money grab.

    Hardly helping people to buy as they are already able to.

    Legal but immoral.
  • jaydeeuk1
    jaydeeuk1 Posts: 7,714 Forumite
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    I think its also going to make houses that are a bit over £250k a bit harder to sell. I've noticed around here since Xmas almost every house listed £250k or under has been stc within 7 days, those around £275k - £300k have been there for there for a while. I know the longer the scheme goes, the less likely I'm going to offer over £250k for a house as I'll be missing out on free cash. We were looking up to £300k, but have now revised this (wife owns, I don't) to max of around £270k.
  • colsten
    colsten Posts: 17,597 Forumite
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    It's great to see that the bonus application and payment process works a lot faster than anyone could possibly expect. :D
    On the morning of 1 February Jason and Caroline made their last £200 payments. "We went into the Halifax branch in the afternoon and closed the account and got the closing documents within half an hour.

    "We scanned this and sent over to our solicitor. The following day, we were advised that our developer had our deposit in full including the bonus and we had exchanged.
  • MARTYM8`
    MARTYM8` Posts: 1,212 Forumite
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    edited 9 February 2016 at 9:13PM
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    gsmlnx wrote: »
    Only available for 2 months and already the obvious flaws in the scheme have come to light. People who have already saved the deposit are using it as a free money grab.

    Hardly helping people to buy as they are already able to.

    Legal but immoral.

    Who do you think are the real beneficiaries of the scheme?!

    Someone on minimum wage who has just inherited £30k from their gran to buy a one bed flat in Barnsley in cash is not deemed worthy of help - even though that bonus might come in handy for furniture etc. By contrast a banker in London earning £100k with a £100k deposit buying a £450k flat with a £350k mortgage is eligible for the HTB bonus.

    It really should be called the help to borrow isa!:D

    First time buyers should definitely take the cash but possibly also ask why they are paying so much more for their new home than their predecessors five years ago and whether all this government 'help' is really helping their generation.
  • MARTYM8`
    MARTYM8` Posts: 1,212 Forumite
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    colsten wrote: »
    It's great to see that the bonus application and payment process works a lot faster than anyone could possibly expect. :D

    Perhaps there is a faster turnaround when developers are getting the cash.

    It does seem ridiculously fast - within 24 hours? Were there no checks done on eligibility etc?
  • YorkshireBoy
    YorkshireBoy Posts: 31,541 Forumite
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    jaydeeuk1 wrote: »
    I think its also going to make houses that are a bit over £250k a bit harder to sell.
    Stamp duty does that too...and has done for years.

    But I'd wager that in the country as a whole, not many first time buyers will be paying >£250K.
  • spikyone
    spikyone Posts: 456 Forumite
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    gsmlnx wrote: »
    Only available for 2 months and already the obvious flaws in the scheme have come to light. People who have already saved the deposit are using it as a free money grab.

    Hardly helping people to buy as they are already able to.

    Legal but immoral.

    Perhaps you could elaborate as to why it's immoral? Those people aren't being dishonest or doing anything wrong, and anyone who wouldn't take advantage of the free money - if they are eligible - is a fool. I think HTB ISAs are a bad idea because they contribute to house-price inflation, and don't think it's how our taxes should be spent either - but I've been paying into the tax system tax so I'm certainly going to take a benefit to which I am completely entitled.

    One question on HTB ISAs though. The government documents and all the advice is ambiguous on how much bonus is actually paid. Is it only payable in multiples of £50, or is it 25% on the total amount? Both "£50 for every £200" and 25% are mentioned, and they are not the same thing.
  • colsten
    colsten Posts: 17,597 Forumite
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    spikyone wrote: »

    One question on HTB ISAs though. The government documents and all the advice is ambiguous on how much bonus is actually paid. Is it only payable in multiples of £50, or is it 25% on the total amount? Both "£50 for every £200" and 25% are mentioned, and they are not the same thing.
    The rules are crystal clear. See clause 7.4 of the Scheme Rules.
  • Rich2808
    Rich2808 Posts: 1,333 Forumite
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    spikyone wrote: »
    Perhaps you could elaborate as to why it's immoral? Those people aren't being dishonest or doing anything wrong, and anyone who wouldn't take advantage of the free money - if they are eligible - is a fool. I think HTB ISAs are a bad idea because they contribute to house-price inflation, and don't think it's how our taxes should be spent either - but I've been paying into the tax system tax so I'm certainly going to take a benefit to which I am completely entitled.

    One question on HTB ISAs though. The government documents and all the advice is ambiguous on how much bonus is actually paid. Is it only payable in multiples of £50, or is it 25% on the total amount? Both "£50 for every £200" and 25% are mentioned, and they are not the same thing.


    No one is criticising the £100k earner taking £3k of taxpayer cash to buy a £450k property in London.

    But when due to government austerity for example nearly 200,000 frail elderly people in England have lost access to local authority social care and home helps since 2010 - many of whom will be terminally ill or disabled - people have the right to question whether this is the best use of taxpayer funds.

    It's a legitimate criticism of government priorities not of those taking advantage of the HTB isa scheme.
  • spikyone
    spikyone Posts: 456 Forumite
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    colsten wrote: »
    The rules are crystal clear. See clause 7.4 of the Scheme Rules.

    Thanks - it was the constant references to £50 for every £200 that were confusing me; I'm sure most people could do the simple maths to work out that if you have £200 you'll get £50, and couldn't see why they weren't saying £25/£100 if they wanted to give an obvious example.
    Rich2808 wrote: »
    No one is criticising the £100k earner taking £3k of taxpayer cash to buy a £450k property in London.

    But when due to government austerity for example nearly 200,000 frail elderly people in England have lost access to local authority social care and home helps since 2010 - many of whom will be terminally ill or disabled - people have the right to question whether this is the best use of taxpayer funds.

    It's a legitimate criticism of government priorities not of those taking advantage of the HTB isa scheme.

    The post I quoted does appear to be criticising the people taking advantage of the scheme, rather than the scheme itself. I absolutely agree with you that there are better uses for the money; in fact my post said I "don't think it's how our taxes should be spent"
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