Sign up for a first home ISA

Daily Mail - - Front Page -

PEO­PLE hop­ing to buy their first home can start sav­ing for a de­posit by sign­ing up for a new ac­count from to­day.

Banks are of­fer­ing the Help to Buy ISAs an­nounced by Chan­cel­lor Ge­orge Os­borne in his Au­tumn State­ment last week.

If savers put away the max­i­mum of £200 a month for five years – £12,000 in to­tal – the Govern­ment will give them a tax-free £3,000 bonus but only if it goes to­wards the de­posit for a home.

How­ever, the price of the prop­erty is capped at £250,000 or, in Lon­don, £ 50,000.

Martin Lewis, founder of MoneySav­ingEx­pert.com, called them a ‘no-brainer for any­one sav­ing for a home for the first time’.

But soar­ing house prices could mean the scheme will not go far enough to help young buy­ers. If prices rise over the next five years at the same rate as they have in the past five, homes in most of the south­east and south­ern Eng­land will be be­yond the Govern­ment price caps.

Alas­tair Dou­glas, of com­par­i­son web­site To­tal­lyMoney.com, said: ‘With ever in­creas­ing house prices, the Help to Buy ISA will not suf­fice.’ The ac­counts are for in­di­vid­u­als, mean­ing a cou­ple can open one each.

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