Top-paying rates on the government backed help-to-buy ISA have been cut by 1.73% since its launch in 2015, the latest research from Moneyfacts reveals.
This increase is hindering first-time buyers’ chance to save and take their first steps on the property ladder.
Charlotte Nelson, finance expert at moneyfacts.co.uk, said: “It is still terrible news that something that was designed to help people save towards a house deposit has seen interest rates cut so severely.
“With the average age of a first-time buyer increasing and the LISA’s maximum age of 39, many savers who a looking to buy their first property feel like they have been cast aside, left to contend with the even lower rates in the standard savings market.
“It will always seem daunting trying to save for a deposit, but with more 5% mortgage products on the market it is definitely achievable. That said, those able to stretch to a 10% deposit could find the deals on the market significantly cheaper.”