A total of 514,868 property completions have now been supported by the Help to Buy: ISA scheme, new Treasury figures have shown.

The latest data has revealed that 673,948 bonuses have been paid through the scheme, totalling £786m, with an average bonus value of £1,167.

According to the figures, the highest number of property completions with the support of the scheme has been in the North West, Scotland, and Yorkshire and the Humber, while the lowest numbers are in the North East, Northern Ireland and Wales.

The Help to Buy: ISA scheme was launched in December 2015 with accounts available through banks, building societies and credit unions. The scheme enables people saving for their first home to receive a 25% boost to their savings from the government when they buy a property of £250,000 or less, with a higher price limit of £450,000 in London. This means that for every £200 saved, first-time buyers could receive a government bonus of £50, with a maximum government bonus of £3,000.

Having closed to new accounts in November 2019, Help to Buy: ISA holders can, however, continue saving into their account until November 2029 when accounts will close to additional contributions. The government bonus must be claimed by 1 December 2030.

The Treasury’s latest data showed that the mean value of a property purchased through the scheme is £176,456, which compared to an average first-time buyer house price of £246,776 and a national average house price of £295,903.

Furthermore, the median age of a first-time buyer in the scheme has been 28, compared to a national first-time buyer median age of 30.

Commenting on these latest figures, Hargreaves Lansdown senior personal finance analyst, Sarah Coles, said: “Help to buy ISA rules are making it harder for first-time buyers to snap up their first home, because only those buying bargain properties can take advantage of the government bonus.

“The allowance outside London hasn’t changed in the seven years since the scheme started, while prices are up by more than 50% - and it’s not the only allowance that’s not fit for purpose.

“The average price of a property bought through the scheme is far lower than the average for first-time buyers overall: people have either had to settle for a cheaper home or forgo their bonus. Meanwhile, there are now only three regions of the UK where you could buy the average property for less than the regional cap of £250,000, and in London, the average price is now £103,000 higher than the London cap of £450,000.

“The government needs to reconsider the limits on the Help to Buy LISA, and the Lifetime ISA. They should be linked to house price inflation, so buyers have the security of knowing that however long they save for, and however house prices move in the interim, they will be protected.”

Share Story: