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Help to Buy catch has left thousands of first-time buyers forced to borrow cash

Help to Buy catch has left thousands of first-time buyers forced to borrow cash or delay their house purchase

Tens of thousands of first-time buyers have been forced to borrow cash from friends and family, or delay their house purchase, because of a major flaw with the Help To Buy Isa.

The Government scheme allows people to make an initial deposit of £1,200 and save £200 a month thereafter. 

They then receive a 25 per cent boost when they buy their first home.

Catch: Under the Help to Buy scheme the Government’s 25 per cent boost is not paid until after contracts are exchanged

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But few realise that this bonus is not paid until after contracts are exchanged, which means it cannot go towards the deposit. 

Around 55,000 first-time buyers have been caught out, according to a Freedom of Information request by OneFamily BS. 

Half had to borrow money to plug the average £1,400 gap.

‘The Isa is not fit for purpose, which is, in part, why it’s closing to new customers in November,’ says Nici Audhlam-Gardiner, of OneFamily.

HM Treasury says it pays out bonuses after exchange, once it is certain the transaction is going ahead.

a.murray@dailymail.co.uk

Read more at DailyMail.co.uk


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