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Buying your first home in the next 10 years?
- AuthorRichard Carter
Thinking of buying a property for the first time in the next 10 years? Take action this month!
If you are someone who might buy a property for the first time in the next 10 years then you may need to take some action over the next month!
The Help to Buy ISA scheme is available to anyone aged 16 or over who has never owned a property. However no new accounts can be opened after the 30th November 2019 but you can continue to save in a Help to Buy ISA scheme until November 2029 giving you a 10 year period in which to boost your savings. The brilliant thing about the account is that the Government will give a 25% bonus on all cash saved in the account up to a maximum of £3,000 if you can save £12,000 in the account by the time you buy.
Martin Lewis, from the consumer website Money Saving Expert called Help to Buy ISAs the ‘easiest, simplest form of help for first time buyers to build a deposit’.
You can save up to £1,200 into the account in the first month, and £200 a month after that. To qualify for the 25% bonus you must save at least £1,600 in total which would give you a bonus of £400.
There are no prescriptive rules confirming how much you must save a month and you can put money in as and when you can afford it over that 10 year period.
There are no penalties if you use the money for something other than purchasing a property although you would then not qualify for the Government bonus. To qualify for the bonus you must put the sum from the Help to Buy ISA towards the purchase price and the bonus is paid over at the point of completion rather than at exchange.
If you plan to buy a home with someone else who is also a first time buyer they can open their own Help to Buy ISA. This means that two people can save a maximum of £24,000 between them and get the maximum bonus of £6,000 from the Government.
Most high street banks and building societies, as well as a few online ones, offer Help to Buy ISAs and there are ‘best buy’ tables published by financial magazines, websites and most newspapers.
The Help to Buy ISA scheme closes to new accounts on the 30th November 2019. After that there is a lifetime ISA (sometimes known as a LISA!) which also offers a 25% bonus boost. The key however is that you can save into both schemes if you meet the eligibility criteria although please note that you can only use the bonus from one ISA to buy a house. Savers aged between 18 and 39 can open a LISA and the bonus sum is again 25%.
For more information the Money Saving Expert website, and other financial websites have good information as well as best buys and frequently answered questions should you need more information.
It is not often that you only have a month to make a decision about something that could help you in 10 years time!