Help to Buy ISAs Already Accelerating, "Escape from Generation Rent"


First wave of first-time buyers cashed in their Government savings boost in April to beat ever-rising property prices

Just months after opening for business, the government’s new help to buy ISAs are already accelerating first time buyers' first step onto the property ladder, according to Lisa Gibbs, Partner and Conveyancing Manager at Simpson Millar Solicitors.Help To Buy ISA

Simpson Millar have seen a dozen first-time buyers using a Help to Buy ISA to part fund their first house purchase in April, and are forecasting a significant increase over the course of the year, as the market for first time buyers benefits from the increased stamp duty costs for buy to let landlords.

Couples making full use of the new first-time buyer support scheme in the three months since they opened for business have already been able to bank a government savings boost of £800. Assuming the maximum monthly allowance of £200 per person (or £400 per couple) is their maximum affordable monthly savings target, the couple will have been able to buy two months ahead of schedule, saving on rent and beating the inexorable rise of property prices.

Lisa Gibbs, Partner and Conveyancing Manager at Simpson Millar Solicitors:

"Savvy first time buyers leapt on the new Help to Buy ISAs from the beginning of 2016, and many have been able to use the savings boost they provide to cover the transaction costs of buying their first home and beat the now-inevitable month-on-month increases in house prices. These numbers have exceeded our expectations – and this is just the new scheme clearing its throat. In the months to come, many more first-time buyers will be able to reach the savings target they’ve set to cover their deposit and purchase costs early, enabling them to grasp the first rung on the housing ladder and jump free of 'generation rent' ahead of time".

How it works:

Couples opening a Help to Buy ISA in January, benefitted as follows:

  • Each allowed to deposit a £1,000 lump sum = £2,000
  • Each able to save £200 per month from Jan to March = £1,200
  • Government savings boost of 25% = £800

Assuming £400 per month was their affordable savings rate towards their new home, the couple will have been able to buy two months earlier than without the Help to Buy ISA.

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