Available from banks and building societies, the new Help to Buy ISAs are savings accounts offering those saving deposits for their first home competitive rates of interest and a top up bonus from the Government of up to 25% to a maximum value of £3,000.
When will they be available?
The new initiative was launched on December 1st 2015 and will remain open until 30 November 2019. The government bonus must be claimed through the purchase of a house by 1st December 2030.
Who is eligible to open a Help to Buy ISA?
Anyone who is aged 16 years or older, a UK resident and purchasing a property in the UK for the first time will be eligible to open this savings account. The house value must be £250,000 or under (in London the limit is increased to £450,000) and must not be rental or buy-to-let.
Are there restrictions about how much I can pay into the Help to Buy ISA?
When setting up and opening a Help to Buy ISA, savers can pay in a one-off lump sum of £1,000. Savers can pay up to a maximum of £200 into their account each month. The total amount a saver can invest in the product during the term is £12,000. This could be topped up by an additional £3,000 from the bonus paid by the government. The minimum amount that needs to be saved to be eligible for the government bonus is £1,600 which will provide a £400 bonus).
How much interest will be paid on the Help to Buy Cash ISA?
Interest rates paid on Help to Buy ISAs will be set by the individual bank and building societies.
Can you open more than one Help to Buy ISA?
One Help to Buy ISA is allowed per individual, not per house, therefore couples collectively will be able to qualify for up to £6,000 as a bonus from the government.
How is the Government Bonus paid?
The bonus is paid directly to the solicitor dealing with the conveyancing transaction. It isn’t added to your account and is only paid if you purchase a house.
Can you switch providers?
Savers will be able to switch between providers to get the best deal for them. Transfer rules will be the same as those for Cash ISAs.
Access Your Help to Buy ISA Bonus with Howells Solicitors
First-time buyers will need a solicitor to apply for their Help to Buy bonus when they are ready to purchase their home.
When ready to purchase, savers need simply to close their account and transfer the funds into another account (or their solicitor's account). They will then receive a closing letter from their ISA provider, which then needs to be given to their solicitor. The solicitor will then use this letter to apply online for the government bonus, which can then be put towards the deposit for a first home. This can be done as part of the general conveyancing process.
To find out more about Howells Solicitors conveyancing services, call 0808 178 2773 to speak to one of our expert solicitors.
