Poor saving returns, slow wage growth, and high house prices make getting on to the property ladder tricky. But there's finally some good news for prospective first time buyers, in the form of a "Help to Buy Isa" (Help-to-Buy-sa?), announced by the chancellor today. But how does it work?
For every £200 an individual squirrels away, the government will put in £50, up to a maximum of £3,000. So, if you save £12,000 in a Help-to-Buy Isa, the government will eventually boost your total savings to £15,000.
Here are some other helpful facts:
- The scheme will start this autumn, and run for four years
- Once the accounts are actually open, there's no limit on how long people can save
- They can make a deposit of £1,000 when they open an account - on top of normal monthly savings
- However the maximum monthly amount savers can deposit is £200
- Accounts are one per person - meaning couples or friends buying together will each get a bonus
- Prospective savers must be aged 16 or over and have their eye on a UK property
- The minimum bonus size is £400 per person, while the maximum is £3,000
- It's available on homes costing up to £450k in London, and £250,000 outside the capital
- First-time buyers will receive their bonus once they get the keys to their first home