Hundreds of people in Weymouth and Portland have used the Government’s Help to Buy ISA scheme to get on the housing ladder, figures show.
The tax-free savings account – which closed in November just under five years after it launched – has drawn criticism from housing charities such as Shelter for helping those who are already better off, while leaving some renters no closer to being homeowners.
Treasury data shows that 320 people in Weymouth and Portland received a government bonus through the Help to Buy ISA between December 2015 – when the scheme launched – and September last year.
In that time, an estimated 243 properties were bought through the tax-free savings account, with more than a quarter purchased between October 2018 and September 2019.
First-time buyers in Weymouth and Portland each received a bonus sum of £911 on average last year. The national average bonus was £966.
The average sale price of homes for first-time buyers in Weymouth and Portland was £172,200 in 2019, £3,100 more than in 2018 and £11,100 less than in 2016 – the first full year of the scheme.
Treasury data shows that 357 people in West Dorset received a government bonus through the Help to Buy ISA between December 2015 – when the scheme launched – and September last year.
In that time, an estimated 252 properties were bought through the tax-free savings account, with more than a quarter purchased between October 2018 and September 2019.
First-time buyers in West Dorset each received a bonus sum of £961 on average last year. The national average bonus was £966.
The average sale price of homes for first-time buyers in West Dorset was £182,200 in 2019, £2,000 less than in 2018 but £14,500 more than in 2016 – the first full year of the schem
The Help to Buy ISA scheme closed to new applicants in November last year, and savers with an account open will need to claim their bonus by December 1 2030 or risk losing out.
The Government boosts any funds saved in the account by 25% at the point the property is purchased. The minimum it will add is £400, while the maximum is £3,000.
Only individuals were able to open an account, but two people buying a property together can each use their bonus, giving them up to £6,000.
Buyers can only use their Help to Buy ISA to purchase a home worth a maximum of £250,000, or £450,000 in London.
The rule on using the bonus money on completion, and not at the exchange stage, has previously caused "confusion" among savers, according to the Mortgage Advice Bureau.
James Chidgey, new homes relationship manager at the MAB, said: “It can still mean buyers having to resort to temporary loans or assistance from family to put down the minimum 5% deposit required to reach exchange of contracts with a vendor.
"Although the Help to Buy ISA is now closed to new applications, there is a very good alternative ISA available, the Lifetime ISA. This can be used by first-time buyers to save for a home, with a facility to save up to £4,000 per annum and receive a 25% bonus from the Government.”
The separate Help to Buy equity loan initiative, which sees the Government offer low-interest loans towards a deposit on a new-build home, is still open.
Homeowners struggling to pay interest fees on their Help to Buy equity loans as a result of the ongoing Covid-19 outbreak were told they will be offered payment holidays, if the loan was taken out before March 31 2015.
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