Gov't confirms Help to Buy ISA plans

Starting on 1 December first-time buyers saving for a deposit will be able to save up to £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000.

First-time buyers can also open their account with a one-off lump sum of up to £1,000 in addition to the monthly maximum.

Couples buying together will be able to combine their bonuses, meaning a potential boost of up to £6,000 towards a deposit for a first home.

The government’s steps are:

1. first-time buyer puts money away in a Help to Buy ISA account

2. first-time buyer closes their account when they are ready to purchase their first home and receives a closing letter from their ISA manager

3. first-time buyer gives the closing letter to their solicitor

4. using the letter, the solicitor applies online for the government bonus

5. bonus is transferred to the solicitor, who completes the purchase of the home using the full bonus amount

Chancellor George Osborne said: “We’re just one month away from the launch of the Help to Buy ISA which will provide extra help for working people who want to buy their own home.

“Today we are laying out the easy steps people will need to take to get hold of their Help to Buy: ISA bonus from the government.”

The Help to Buy ISA was launched by the Chancellor at the 2015 March Budget.