250,000 Help-To-Buy ISAs opened since December
05/02/2015
The new Help-to-Buy ISA has proved to be a success so far with roughly 250,000 people choosing to open an account since its launch on the 1st December.
Chancellor George Osborne has announced that the Help-to-Buy ISAs have been opened at a rate of one every 30 seconds, or about 3,000 people a day. Data from banks also shows that 75% of the new savers are under the age of 30.
Help-to-Buy ISAs were unveiled in the budget last March, and give first time buyers who are saving for a home a top up of £50 for every £200 they save towards a deposit. Account holders can save up to £12,000 into the ISAs, with a top up of up to £3,000 from the Government.
Critics of the Help-to-Buy ISA have claimed that the scheme could increase demand for homes without doing anything towards the supply, pushing house prices up even further. It has also been highlighted that the £2 billion cost to taxpayers could have been uused to build thousands of affordable new homes.
George Osborne said:
“The best thing the government can do is to make sure that homes are being built for families in the right places and we have the right infrastructure.
“The fact that so many people are making use of the help-to-buy Isa says to me that there’s a lot of pent-up aspiration there, there are a lot of families who want to get on the housing ladder.”
Campbell Robb, the chief executive of housing charity Shelter, said:
“The fact is, with house prices soaring by almost £20,000 in the last year alone this is nothing more than a drop in the ocean. In many parts of the country even the maximum amount you could save with government help won’t be enough for a deposit and, with half of renters’ incomes swallowed up by housing costs, for millions, saving anything at all is impossible.
“This money would be far better spent on building homes that people on ordinary incomes can actually afford to rent or buy in the first place.”
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Mortgage repayments set to rise
Mortgage repayments are set to rise, despite interest rates being held for a second month, as Britain's second-biggest mortgage lender raises its rates. Abbey is the first High Street bank to put up the interest rates on its standard tracker mortgages for new customers and other lenders are expected to follow suit - with Standard Life confirming that it too is reviewing its rates.The Daily Telegra...
Read MoreHomeowners unprepared for interest rate rise
03/06/2015 Research from Ocean Finances has shown that 13% of people would quickly get into debt to cover their mortgage payments if interest rates rise by just 1% in the near future. Almost 7 million people would struggle to pay the additional £55 a month per £100,000 owed if base interest rates were to rise by 1%. 63% of borrowers have claimed that they would have to cut back on all non...
Read MoreWhat now for UK mortgages?
It will come as no surprise to see the warning flags starting to appear across the UK mortgage sector. Funding is quickly disappearing from the money market, the housing market is in a sharp decline and nobody wants to buy a home today. Mortgages are now sure to increase as the cost of debt on the money markets is sure to balloon over the next few days and weeks.
We have already s...
Mortgage activity collapses in January
Despite high hopes that the UK property sector was indeed returning to growth, these hopes were dashed in January with news of a 49% reduction in the number of home loans issued in the UK. It would appear that the stamp duty holiday introduced by the government in 2009, which ended in December 2009, led to a surge in property acquisitions towards the end of 2009. After the stamp duty holiday ended...
Read MoreMortgage lenders decide to pass on base rate cut
It has been announced that the main mortgage lenders in UK have responded positively to further government pressure regarding mortgage rates. The Nationwide, HBOS, Royal Bank of Scotland and Northern Rock will each cut their variable lending rates by 1.5% although this will not kick in until 1 December. Lloyds TSB and the Abbey have already announced their plans to reduce rates as the pressure on...
Read More