Halifax has revealed that its Help to Buy ISA will offer a rate of 4% and is available to first-time buyers over the age of 16 from 1 December 2015.
Under the government scheme, deposits are limited to £200 per month, except for the month of opening when customers can fund the account with an extra £1,000. The government will add 25% to the closing balance of the account up to a maximum of £3,000 (£400 minimum). The government bonus is paid when the account is closed, as part of the conveyancing process. The account is limited to one per person but multiple bonuses can be used as a deposit for the same property in the case of joint buyers.
According to a survey of over 2,000 prospective first-time buyers, almost half (48%) are likely to open a Help to Buy ISA, according to the latest research from Halifax. The launch of Help to Buy ISA comes at a time when 52% of would-be first-time buyers cite the size of deposit required as preventing them from purchasing a property, although 29% are confident they will be able to buy their own home at some point in the future. Further research shows that 43% of prospective first-time buyers are saving towards their deposit, at an average of £33.35 per week.
Many savers remain concerned about their chances of getting on the property ladder. 30% of prospective buyers are prevented from buying a home because they don’t think they will be able to get a mortgage. Further to this, 42% worry about how long it will take them to save for their first home and almost the same number (40%) worry that they will never be able to afford to buy their own home.
Giles Martin, head of Halifax Savings, said: “It is clear from our research that while some people are still worried about the challenge of saving for a deposit, many see the new Help to Buy ISA as a genuine solution, with half of prospective first-time buyers intending to open an account.
“For those looking for an incentive to save regularly, opening this account, with a 4% interest rate from Halifax and a 25% government bonus, will make what they do save work much harder for them.”