The help to buy scheme was created to help first-time homebuyers get on the property ladder. Contributing to a Help to Buy ISA will help you save money for your first home 25% faster as for every £200 you save, the government adds £50, with the limit of a government bonus of £3,000
This article does not constitute advice. Professional advice should be taken prior to acting on any part of it. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
It seems like a great way to help you save for house hunting, but it would appear the jury is still out on the scheme, with major news outlets reporting contradictory predictions of its fate.
Will it be replaced?
The Sunday Telegraph is reporting that the government is planning to retire the scheme and institute a different one, aimed towards the lower paid population, post 2021. This approach is being considered because recent figures have indicated that a large portion of homebuyers that used help to buy loans actually earned over £100,000.
This was not the majority, however, with the largest proportion of applicants earning between £80,000 and £100,000. In total, though, only just 32,445 households leveraged the scheme to purchase their home. Of course, these statistics are causing some to think that the scheme doesn’t really benefit those who really need it and because of this, in some areas, property prices are inflating.
Will it be extended until 2023?
The Times is contradictorily reporting the scheme will run until 2023, an additional two years more than originally planned.
The report indicates that the government is considering imposing a household income cap and other restrictions on the plan. But more details will be revealed when the autumn budget is announced.
It might come as a surprise that besides first-time homebuyers, the other group that benefits greatly from the scheme is actually developers. They’re experiencing the biggest growth surge in five years and builders are investing and building on even more land at an incredible pace. This is obviously beneficial to the government as each new property built puts them ever closer to their goal of delivering 300,000 new homes a year.
It’s clear now that the government is getting the message that they need to create more opportunities for potential homeowners and developers even after the initial run of help to buy ends in 2021.
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