Two thirds of potential home buyers plan to use the Help to Buy ISA scheme to save a deposit for a home.
The research by MoneySuperMarket found that 82% of prospective buyers think the scheme will help them get on the property ladder earlier than planned. Help to Buy ISAs, which were launched on 1 December 2015, allow individuals over the age of 16 to save up to £200 into an account per month. Buyers can also deposit a lump sum of up to £1,000 when they set up their account.
The money will earn interest and will also qualify for a 25% bonus (up to £3,000) from the government provided the funds are used to buy a house. To be eligible a person must be 16 or over and be planning to buy a home under £250,000 (or £450,000 in London). However, MoneySuperMarket found that people don’t necessarily intend to spend their Help to Buy savings on a deposit.
Of those who plan to open a Help to Buy ISA:
- 32% will put the money towards their deposit
- 13% will use it to pay stamp duty
- 10% will spend it on legal fees
- 15% will buy furniture
- 9% will spend it on home renovations.
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