As part of the today’s 2015 budget announcements, Tory Chancellor of the Exchequer, George Osborne, has unveiled plans that are designed to further assist first time buyers.
It has been extremely well documented in recent years that first time buyers now face a strenuous struggle in their quest to buy property, including hurdles such as consistently high house prices, lack of wage inflation and a lingering reluctance of banks to relax strict mortgage requirements.
One of the main issues facing first time buyers these days is the need for considerable deposits that place even the best value for money property out of reach. In generation that has little option other than to rent, the strains of rent payments and bills often leave little left at the end of the month to save – and so the renting cycle continues. As part of his budget announcements, Osborne has announced a scheme that tops up 25% of what first time buyers manage to save.
So, how does this work? With the introduction of the Help to Buy ISA, the government are now aiming to top up first time buyer savings by 25%, up to a maximum of £12,000. If you were to save £200 per month, you would then be eligible for an additional £50 per month top up. What’s more, the scheme is on a per-person basis, so if you’re saving as a couple, you can both sign up for a Help to Buy ISA account.
These Help to Buy ISA accounts are available to open from Autumn 2015 and will remain available for a period of four years, although you can save for an infinite amount of time once your account is open. With deposits being such a huge preventative for first time buyers, this scheme, along with other Help to Buy initiatives, is set to have a big impact in helping with that increasingly elusive first step onto the property ladder.