There is some good news, at last, for first time buyers. The government has introduced a brand new savings scheme to help buyers put together a deposit to buy their first home.
The savings plan is known as a Help to Buy ISA and under it the government will boost savings by 25% to help first time buyers get on the property ladder. That means for every £4 saved, the government will contribute a further £1.
The scheme, available since 1st December, allows the government to add up to £50 a month on savings of £200, up to a maximum of £3,000 on total savings of £12,000. So if a couple can save £24,000 between them towards a deposit, the government will contribute a further £6,000, giving them a total deposit of £30,000.
Under the existing Help to Buy scheme homebuyers may buy a new property with a deposit of just 5%. If a couple are hoping to buy a brand new home worth £250,000, for example, they will require a 5% deposit of £12,500. By using the new ISA scheme, the couple need only contribute £9,500 with the government providing the additional £3,000.
Amongst the High Street lenders supporting the scheme are Barclays, Lloyds Banking Group, Nationwide, NatWest, Santander and Virgin Money. For full details of the scheme visit www.helptobuy.gov.uk