Properties worth £56.2 billion have been financed thanks to the Help to Buy ISA, and it has been popular among young people and in more affordable areas.

The Help to Buy ISA may have been scrapped late last year, but according to new data the scheme has helped nearly 324,000 first-time buyers get onto the property ladder.

The scheme, which closed to new savers in November 2019, meant the government contributed £50 for every £200 a homebuyer saved towards a property deposit up to a maximum of £3,000.

New figures released by the government show it has paid out £426.74 million through the scheme since it first launched in 2015. The ISA has been used to finance properties worth a total of £56.2 billion

A total of £426.74 million was paid out in bonuses between Dec 2015 and March this year as part of the initiative.

The Help to Buy ISA was replaced by the Lifetime ISA late last year after criticism that the former scheme didn’t support first-time buyers enough.

Who has benefitted from the scheme?

The latest figures suggest the Help to Buy ISA assisted homebuyers who most needed help, because it has been popular among people in their twenties and in more affordable areas.

The average home bought using the scheme cost just £173,878, compared with a typical first-time buyer property price of £194,718.

At the same time, only 6% of recipients purchased a property costing more than £300,000.

Figures also show that two-thirds of homebuyers using the ISA were aged between 25 and 34, with nearly a quarter of those who received a bonus aged under 24.

Where was the scheme most popular?

Only 7% of people using the Help to Buy ISA purchased a property in London.

Instead, the scheme was popular in areas of the country where property is less expensive.

Around 12% of all purchases made using the scheme were in the North West, where the average home costs £149,842, while 9% were in Yorkshire and the Humber, where homes average £147,415.

Scotland and the West Midlands were the joint third-highest regions in which people who saved through the Help to Buy ISA purchased a property.

What other schemes are available?

The Lifetime ISA, which replaced the Help to Buy ISA, sees the government contribute up to £1,000 a year to savers aged under 40 who set aside £4,000 annually towards the purchase of a new home or retirement. 

Another initiative is the Help to Buy equity loan scheme, under which people can purchase a property with just a 5% deposit, with the government topping this up with a 20% equity loan - rising to 40% in London – which is interest-free for five years.

Stamp duty on the first £300,000 of a property purchased by first-time buyers has also been waived, while the First Homes scheme enables first-time buyers and key workers in England to buy a new-build home at a 30% discount.

Top three takeaways

  • Nearly 324,000 first-time buyers have purchased a home using the Help to Buy ISA since the scheme was first launched in 2015.
  • A total of £426.74 million was paid out in bonuses between December 2015 and March this year as part of the initiative.
  • The scheme aims to help people get on to the property ladder through the government contributing £50 for every £200 they save towards a property deposit, up to a maximum of £3,000.

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