Since the launch of the Help to Buy: ISA, there have been 304,048 property completions supported by the scheme, according to new figures published by the Treasury.
There were also 401,017 bonuses paid through the scheme between 1 December 2015 to 31 December 2019, to support the total of property completions. The total value of the bonuses paid in this period was £396m which were used to finance properties worth £52.8bn in total.
The Treasury’s latest figures showed the mean value of a property completion in the Help to Buy: ISA scheme to the end of December 2019 was £173,711, compared to the average first-time buyer price of £197,384 and the average UK house price of £234,7425.
Seventy-two per cent of completions were in the lower value bands of £200,000 or less, and the data also showed that 21% of completions were on properties valued at between £200,000 and £250,000. The Treasury stated this reflects the fact that most completions in the scheme have been on properties outside London, in regions where prices are typically lower.
Commenting on the figures, TISA retirement policy manager, Renny Biggins, said: “Behavioural research shows that, if something is perceived to be way beyond someone’s savings means, then this has a negative effect and puts people off trying to reach their goal.
“However, if it is perceived to be possible, they go the extra mile. This could explain why the Help to Buy: ISA is not being used as much in regions with higher property value as it takes savers longer to accumulate the deposit.
“The bonus combined with cheaper house prices also enables those who do use the Help to Buy: ISA to climb on the property ladder two years earlier than the national average age, which can, in turn, allow them repay mortgage costs before they reach retirement. This can provide savers with a higher living wage in their retirement and also may help with unexpected retirement costs such as long-term care.”
The Help to Buy: ISA scheme was launched on 1 December 2015 with accounts available through banks, building societies and credit unions, and the scheme has enabled people saving for their first home to receive a 25% boost to their savings from the Government when they buy a property of £250,000 or less – with a higher price limit of £450,000 in London.
The Treasury closed the scheme to new accounts on 30 November 2019, although Help to Buy: ISA account holders can, however, continue saving into their account until 30 November 2029 when accounts will close to additional contributions. The Help to Buy: ISA government bonus must be claimed by 1 December 2030.
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