Help to Buy Cap too low!

BobT36

Are the govt or whomever ever going to review this? 
£250k doesn't get you very far nowadays.

Myself and my gf spent all those years filling our Help to Buy ISA accounts, yet now that we're finally at £12k each (and scraped some additional deposit together) and ready to buy somewhere (at 34), everywhere suitable to start a family is much more expensive and most are way over the cap!

We'd rather not buy somewhere worse and then have to move again in a couple of years (and with a baby), if possible. We were hoping to use the extra 6k from our combined accounts to cover all the fees and everything. 

julicorn

You can transfer from a H2B into a Lifetime ISA which iirc has a larger limit, although I'm pretty sure you can only transfer in £4k per tax year. Might still help you a little. 

Edit: Also see below.

julicorn

There is much more information here: https://blog.moneysavingexpert.com/2021/03/martin-lewis--should-i-move-my-help-to-buy-isa-into-a-lifetime-i/

It seems to suggest that what I wrote wouldn't work if you plan to buy within a year.

I also don't think anyone will review this - H2B ISAs have been closed for new applicants for a few years now, so I suppose the product is just slowly disappearing / being replaced by the Lifetime ISA.

grumiofoundation

As above the HTB ISA account has been replaced by the Lifetime ISA (450k limit).

When are you looking to buy?

LISA has to be open for 12 months before can use but by Feb 2023 you could have contributed 8000 to LISA each (so 10,000 including bonus). Limit is 4000* per tax year 

*edited - see post below

TripleH

grumiofoundation said:

LISA has to be open for 12 months before can use but by Feb 2023 you could have contributed 8000 to LISA each (so 10,000 including bonus). Limit is 400 per tax year

£4,000 per tax year?

Apologies for querying.

grumiofoundation

TripleH said:

grumiofoundation said:

LISA has to be open for 12 months before can use but by Feb 2023 you could have contributed 8000 to LISA each (so 10,000 including bonus). Limit is 400 per tax year

£4,000 per tax year?

Apologies for querying.

Yep you are right it's 4,000 - lazy early morning typo 

Chris_English

BobT36 said:

Are the govt or whomever ever going to review this? 
£250k doesn't get you very far nowadays.

Myself and my gf spent all those years filling our Help to Buy ISA accounts, yet now that we're finally at £12k each (and scraped some additional deposit together) and ready to buy somewhere (at 34), everywhere suitable to start a family is much more expensive and most are way over the cap!

We'd rather not buy somewhere worse and then have to move again in a couple of years (and with a baby), if possible. We were hoping to use the extra 6k from our combined accounts to cover all the fees and everything. 

There are some very nice houses in nice towns available within the cap. Look at this one, for example;

https://www.rightmove.co.uk/properties/111595688?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

A four bedroom detached house in Morpeth, which is a lovely town.

Is it honestly the case that a four-bedroom house is no good for you?

Gavin83

Chris_English said:

BobT36 said:

Are the govt or whomever ever going to review this? 
£250k doesn't get you very far nowadays.

Myself and my gf spent all those years filling our Help to Buy ISA accounts, yet now that we're finally at £12k each (and scraped some additional deposit together) and ready to buy somewhere (at 34), everywhere suitable to start a family is much more expensive and most are way over the cap!

We'd rather not buy somewhere worse and then have to move again in a couple of years (and with a baby), if possible. We were hoping to use the extra 6k from our combined accounts to cover all the fees and everything. 

There are some very nice houses in nice towns available within the cap. Look at this one, for example;

https://www.rightmove.co.uk/properties/111595688?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

A four bedroom detached house in Morpeth, which is a lovely town.

Is it honestly the case that a four-bedroom house is no good for you?

Fine if you live in the North East, not so great if you live at the opposite end of the country.

Saying that I've no idea why people are still using Help to Buy and haven't switched to the Lifetime ISA. It's a better product in just about every conceivable way.

OP, there is another potential major issue for you that based on what you've said I figure will be a problem. You can't use the Help to Buy ISA for the exchange deposit so if you're buying a £250k house you'll need £25k on top of what you've got in your ISA, plus enough to cover fees + taxes. Do you have this kind of money? You can negotiate this down but it's at the discretion of the vendor and it's likely they won't reduce it considerably.

If the above is an issue I'd suggest switching to a Lifetime ISA and delaying your purchase for a year.

Hedgepigs

Gavin83 said:

Chris_English said:

BobT36 said:

Are the govt or whomever ever going to review this? 
£250k doesn't get you very far nowadays.

Myself and my gf spent all those years filling our Help to Buy ISA accounts, yet now that we're finally at £12k each (and scraped some additional deposit together) and ready to buy somewhere (at 34), everywhere suitable to start a family is much more expensive and most are way over the cap!

We'd rather not buy somewhere worse and then have to move again in a couple of years (and with a baby), if possible. We were hoping to use the extra 6k from our combined accounts to cover all the fees and everything. 

There are some very nice houses in nice towns available within the cap. Look at this one, for example;

https://www.rightmove.co.uk/properties/111595688?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

A four bedroom detached house in Morpeth, which is a lovely town.

Is it honestly the case that a four-bedroom house is no good for you?

Fine if you live in the North East, not so great if you live at the opposite end of the country.

Saying that I've no idea why people are still using Help to Buy and haven't switched to the Lifetime ISA. It's a better product in just about every conceivable way.

OP, there is another potential major issue for you that based on what you've said I figure will be a problem. You can't use the Help to Buy ISA for the exchange deposit so if you're buying a £250k house you'll need £25k on top of what you've got in your ISA, plus enough to cover fees + taxes. Do you have this kind of money? You can negotiate this down but it's at the discretion of the vendor and it's likely they won't reduce it considerably.

If the above is an issue I'd suggest switching to a Lifetime ISA and delaying your purchase for a year.

I don't think that is quite right - I believe you can use the actual money in the HTB ISA as exchange deposit, just not the bonus. The bonus gets transferred to your solicitor for completion.

GoogleMeNow

Hedgepigs said:

Gavin83 said:

Chris_English said:

BobT36 said:

Are the govt or whomever ever going to review this? 
£250k doesn't get you very far nowadays.

Myself and my gf spent all those years filling our Help to Buy ISA accounts, yet now that we're finally at £12k each (and scraped some additional deposit together) and ready to buy somewhere (at 34), everywhere suitable to start a family is much more expensive and most are way over the cap!

We'd rather not buy somewhere worse and then have to move again in a couple of years (and with a baby), if possible. We were hoping to use the extra 6k from our combined accounts to cover all the fees and everything. 

There are some very nice houses in nice towns available within the cap. Look at this one, for example;

https://www.rightmove.co.uk/properties/111595688?utm_campaign=property-details&utm_content=buying&utm_medium=sharing&utm_source=copytoclipboard#/&channel=RES_BUY

A four bedroom detached house in Morpeth, which is a lovely town.

Is it honestly the case that a four-bedroom house is no good for you?

Fine if you live in the North East, not so great if you live at the opposite end of the country.

Saying that I've no idea why people are still using Help to Buy and haven't switched to the Lifetime ISA. It's a better product in just about every conceivable way.

OP, there is another potential major issue for you that based on what you've said I figure will be a problem. You can't use the Help to Buy ISA for the exchange deposit so if you're buying a £250k house you'll need £25k on top of what you've got in your ISA, plus enough to cover fees + taxes. Do you have this kind of money? You can negotiate this down but it's at the discretion of the vendor and it's likely they won't reduce it considerably.

If the above is an issue I'd suggest switching to a Lifetime ISA and delaying your purchase for a year.

I don't think that is quite right - I believe you can use the actual money in the HTB ISA as exchange deposit, just not the bonus. The bonus gets transferred to your solicitor for completion.

Yes, agree with this.  The bonus is used towards the completion monies but you can use the HTB ISA savings for the deposit.

BobT36

Some good info in this thread, thanks all. 
Arrgh that's a bit irritating with how the LISA works. I'd have thought they'd make transferring into it easier. Why the stupid rules about having it open a year and only putting 4k in per tax year, if you already have a H2Buy? Why not just let you transfer the full £12k amount in (as long as transferring it from a H2Buy). Grr. 

That's a lovely house linked, but we don't live in Morpeth, and I'm sure some even cheaper houses are available up Scotland or whatever, but it's not like we can just move anywhere! We're only 34 so have jobs to think about. 

We were going to keep our eyes open for any perfect places that pop up, but are most likely going to have to rent for another year, while we look. The only issue here is that we're not going to be able to buy for another full year, even if a great one pops up, due to this restriction. It sounds like it might be a good idea to drop 4k in while it's this side of the tax year, 4k next year, then buy just after April 2023 (where we'll drop another 4k in).

Delays things a lot more, we'll both be 35 by then. We were hoping we'd have a stable roof over our heads to start having a family.  I say this because our worst fears came true where we're being evicted from our current home, as the landlord wants the place for his daughter in law. This literal situation of potentially losing the rented roof over our heads was what put us off having a child for so long, and since we're now having to move anyway we were finally looking at buying, but nearly everywhere is so expensive!


If the LISA cap is £450k (much more reasonable) and H2Buy is still usable till 2030, why the heck couldn't they just increase the cap to match, or drop the transfer restrictions? How the heck does this all help young people but their first house and start a family? It's already late because we've been renting and saving for so long. Fortunately we do have enough for a decent deposit, it's just the house prices are so high!