The Help to Buy ISA which gives savers a bonus of 25% on savings towards house purchase has seen it’s first first time buyers cash in.
One estimate says first time buyers have been able to bring house purchases forward two months earlier than they might have done without it.
There had also been worries the £50 plus VAT conveyancers were allowed to charge for claiming the bonus on behalf of the client would be insufficient to cover the time it takes, but Lisa Gibbs, partner and conveyancing manager believes it’s been simple enough.
Lisa Gibbs, Partner and Conveyancing Manager at Simpson Millar Solicitors, said: “The application process to date has been relatively straightforward – with funds arriving within a couple of working days of our initial request, which is further good news for our clients.
“Savvy first time buyers leapt on the new Help to Buy ISAs from the beginning of 2016, and many have been able to use the savings boost they provide to cover the transaction costs of buying their first home and beat the now-inevitable month-on-month increases in house prices. These numbers have exceeded our expectations – and this is just the new scheme clearing its throat.
“In the months to come, many more first-time buyers will be able to reach the savings target they’ve set to cover their deposit and purchase costs early, enabling them to grasp the first rung on the housing ladder and jump free of ‘generation rent’ ahead of time”.
Couples will so far have been able to obtain a government bonus of around £800. Simpson Millar say for a couple saving £200 each (the maximum allowed in the scheme), this means they will be able to buy two months before they would have done.
However given that the average deposit for a first time buyer in February 2016 was £29,451, the average first time buyer would have been saving £200 per month for more than twelve years. With a five percent deposit on an average first time buyer purchase of £168,539, the saver would have been saving for three and a half years at £200 per month.