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

colsten

Rich2808 wrote: »

You do rather miss the point.

As I said, tell Gordon or George or whatever his name is.

OVO

Thrugelmir wrote: »

Does anyone bother to read the rules? Will take 54 months of saving to obtain the maximum bonus of £3k. So much hot air spouted over nothing. The scheme is very clearly targeted at those with long term ambitions.

You can put 2 ISAs together though,


eg, me and my GF are saving for a house and we both have a HTB ISA open so we can put our money saved and bonus's together at the end.


Also the maximum you can put in the isa is £200 a month but we save more than that so the difference we put in a savings account and will add that to our deposit at the end when we decide to buy.


I think its a good scheme, No matter how long you plan on saving for - its a little additional money to have.

eskbanker

drlabman wrote: »

Source? If it's the scheme rules, please quote the para number.

If the bonus doesn't form part of the deposit i.e. purchase price minus mortgage value, then what does it get applied to?

Pretty sure that poster is alluding to the guidelines for conveyancers, in which para 8.4(C) does indeed state

Bonus funds remain the property of HM Treasury until applied to the purchase of an eligible property. Until the Bonus is used for a property purchase, it must be held in the Conveyancer Client Account. The Bonus cannot be used for a deposit. It must contribute towards the funds consolidated at the completion of the property transaction.

I suspect that this is intended to mean a deposit in the sense of an advance reservation fee for a new build, for example, rather than the equity difference between mortgage and purchase value, otherwise the wording as it stands doesn't actually make any logical sense....

redux

MARTYM8` wrote: »

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

Talking of help to borrow, you could have also mentioned that the first time buyer can also have an interest free loan for 5 years. In London this is 40% of the purchase price, so up to £180k, whereas those outside London can have 20% of a smaller limit, so up to £50k.

Arguably this may have more potential effect on subsidising prices to rise than the few hundred or up to £3k bonus of the HTB ISA.

Thrugelmir

eskbanker wrote: »

I suspect that this is intended to mean a deposit in the sense of an advance reservation fee for a new build, for example, rather than the equity difference between mortgage and purchase value, otherwise the wording as it stands doesn't actually make any logical sense....

Buyer still has to be down a cash deposit on exchange of contracts. "Bonus" therefore is in addition to this. Not instead of.

Rich2808

colsten wrote: »

As I said, tell Gordon or George or whatever his name is.

I expect London will be sending the same message this May as last May. High house prices have turned young middle class professionals in London into long term private renters when their predecessors 20 years ago could have bought a house in a nice part of town. They should be natural Tory voters.

We need schemes to deliver more housing. Not schemes that simply push up the price.

Osborne won't change course and we should all have the right to criticise the policy not those taking advantage of it.

mooluk26

eskbanker wrote: »

Pretty sure that poster is alluding to the guidelines for conveyancers, in which para 8.4(C) does indeed stateI suspect that this is intended to mean a deposit in the sense of an advance reservation fee for a new build, for example, rather than the equity difference between mortgage and purchase value, otherwise the wording as it stands doesn't actually make any logical sense....

True, but if I may direct you to the FAQs also found on that page (sorry, can't link as I'm a newbie):

Is the bonus money intended for exchange or completion?
You should put the bonus money which you receive towards the completion of the property.

And there are numerous other mentions of adding the bonus to the "funds used at completion". This makes no sense, apart from making it clear that it shouldn't be used on the deposit at exchange.

At completion, my funds will be 75% mortgage, 20% HTB Equity Loan to top up my 5% deposit. Where does the HTB ISA bonus go? Because the scheme makes it clear they must go towards the house purchase.