Many of you reading Finance Pondering will hopefully be considering buying a property at some point in the future. W, of course all know how difficult this is with hugely inflated house prices and typically minimal pay rise increases which only just beat inflation. Not to mention the sheer cost of living and the difficulty of being able to save for a deposit. Unless you’re lucky enough to have the Bank of Mum and Dad, then you’ll be in the same boat as J and I. I know that the rent I pay, just for a room in a house, would easily cover the cost of a mortgage payment each month. It’s just getting the deposit together that’s the hardest part.
The Government launched the “Help To Buy Isa” in 2015, however, just 4 years on and there’s just a month left to open one.
What Is A “Help To Buy Isa”?
A “Help To Buy Isa” is a Government scheme, in the form of a specific financial product, designed for first time buyers to get a foot on the property latter. What this means is that the government will contribute an additional 25% on top of anything you save into a “Help To Buy Isa” up to a maximum of £3000. So for every £4 you save, the Government will give you £1. It’s capped at £3000 so the maximum you should save it into it (excluding the fact that “Help To Buy Isa’s” will earn you interest) is £12,000.
Why Should I Open A “Help To Buy Isa”?
Because if you were going to buy anyway then you’ll get 25% on top of anything you save into the account! Let’s say you do save the maximum £12,000, the additional £3000 provided by the Government which goes towards the cost of your deposit, would cover a good chunk of solicitors’ fees. This is something you’ll more than likely have to pay when purchasing a property.
Even if you’re not planning on buying a property any time soon it’s always best to keep your options open and you can start one with just £1. Let’s say you change your mind in the future and decide not to buy a property, well then you can just withdraw the £1.
The point here is that the scheme closes to new applications on the 30th November so you’re best off at the very least opening a “Help To Buy Isa” with £1.
Who Offers A “Help To Buy Isa”?
Currently a number of banks offer “Help To Buy ISAs” with the best of these being:
- Barclays Help To Buy Isa – Pays 2.58% Interest
- Nationwide Help To Buy Isa – Pays 2.5% Interest
- Natwest Help To Buy Isa – Pays 2.5% Interest
Just Open One With £1!
It’s seriously unlikely that the Government is going to offer another scheme like this any time in the immediate future (as the take up of the Lifetime ISA hasn’t been as good as expected) and with there being very little help out there for individuals to save for a deposit I honestly cannot stress enough that you should absolutely do this. You can open an account for £1 and just leave it there if you like, the thing is that if you do open an account your options will be open. If you miss the deadline closing date of the November 30th you’ll be locked out of the scheme.
So just go and open an account already! You only need £1!