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Help To Buy ISAs exposed as not helping first time deposits after all

The Daily Telegraph appears to have exposed the government’s much-vaunted Buy To Let ISA scheme - billed as helping first time buyers raise a deposit - as a fake.

Far from enjoying a 25 per cent bonus on savings put into the ISA, as originally suggested by former Chancellor George Osborne when he launched the scheme with much fanfare, it appears the 25 per cent will now not be paid by the Treasury until the sale has completed. 

It may then be used for mortgage payments or other post-completion costs but critically it will be too late for the sum to help with the size of the deposit, which is often cited as the key reason first time buyers find it tough to purchase.


The accounts let customers save £200 a month to which the government adds £50, up to a final total of £15,000.

“The small print means the bonus cannot be used for this initial deposit, and can only be spent as part of the purchase cost, for example on mortgage payments, once the deal is completed. The Treasury has been forced to admit that the clause was included to stop people benefiting from the bonus without actually buying a house” reports the Telegraph.

The newspaper demonstrates that a number of companies have been advertising their Help To Buy ISAs as assisting first time buyers with their deposits - and so these ads may now have to be changed.

“So far fewer than 1,500 people have used them to help buy a home as the limit on how much can be paid in means they have only just accrued a realistic amount to put toward a deposit” says the Telegraph.

  • Jon  Tarrey

    Never. I don't believe it. A flagship government policy, from a government whose record on housebuilding has been routinely awful, turning out to be a dud. Must be some kind of mistake, m'lud.

  • Terence Dicks

  • Commercial Trust

    This is no doubt a disappointment to aspiring buyers, but do remember that one can transfer the balance of a Help to Buy ISA to a Lifetime ISA when the latter becomes available next April. Money saved in this tax year won't count towards the Lifetime ISA allowance (which is higher, at £4,000 per year) and the money transferred should still get the H2B ISA bonus.

    Importantly, the bonus for a LISA is paid annually at the end of the tax year, rather than at completion.


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