Help to Buy house purchases slump to record low

Last year saw the lowest number of properties ever bought using a Help to Buy ISA, new Treasury figures have revealed.

Just 45,016 properties were purchased using the scheme, less than half the 93,922 bought in 2021.

The final three months of last year also saw a significant slowdown in people using Help to Buy ISAs, with just 10,985 properties bought with them in Q4, a total down 9% compared to the previous quarter.

Help to Buy ISAs opened in December 2015 and closed to new entrants in November 2019. They have now helped with the purchase of 592,105 properties altogether.

However, according to the latest Treasury figures, the average value of a property bought through the Help to Buy ISA is just £177,877, significantly less than the average first-time buyer property price of £237,655, and an average property price of £284,691.

Head of personal finance at Hargreaves Lansdown, Sarah Coles, said that the Help to Buy ISA had a “horrible” 2023.

“As the property market slowed to a trudge, the Help to Buy ISA lagged behind, dragging its feet and complaining,” Coles commented. “There were half as many purchases using the scheme as there were two years ago.

“It reflects the fact that it has been four and a half years since the Help to Buy ISA closed to new entrants, and although bonuses can be claimed until 2030, the numbers are dwindling fast. As ever with a closed market, the savings rates aren’t much to write home about anymore.”

Coles suggested that the cap on the value of the property an individual can buy through the scheme is also a “major issue”.

Under the scheme, there is a cap on the value of the purchased home of £250,000, or £450,00 in London. Users of the scheme can pay up to £200 a month into their ISA, with the Government topping up any savings by 25%, a bonus that can be claimed until November 2030.

“Outside London you can only buy a property worth up to £250,000 with a Help to Buy ISA, and the average first-time property is creeping ever closer to this figure,” she continued.

“The savings limits haven’t changed either, and after the first month are limited to £200 a month. The government bonus is also capped at £3,000, so if you take full advantage of the scheme – paying in £12,000 and getting a £3,000 bonus – in total you can build a deposit of £15,000. It's only very slightly over 5% of the price of the average property.”

Share Story:

Recent Stories

Helping landlords make their cash work harder
MoneyAge Editor, Adam Cadle, talks to Family Building Society BDMs, Arif Kara and Nathan Waller, about the resilient BTL market, the wide variety of landlords that Family Building Society caters for, and how niche products like an Offset mortgage can help improve cashflow.

An outlook on the BTL market
MoneyAge Editor, Adam Cadle, talks to Landbay senior regional account manager, Alex Witham, about current market sentiment within the BTL space and Landbay’s success in this area

Empowering advisers: A decade of education in Later Life Lending with Air Academy
Michael Griffiths is joined by chairman of Air Club and former founder and CEO of Air, Stuart Wilson, and head of the Air Academy, Daniel Holden, to look back on a decade of business focused learning at the Air Academy.


Subscribe to our newsletter to receive breaking news and other industry announcements by email.

  Please tick here to confirm you are happy to receive third party promotions from carefully selected partners.