When former chancellor George Osborne launched the scheme past year, he said it would provide “direct government support to anyone saving for the deposit on their first home”.
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Under the scheme, meant to help people get onto the housing ladder for the first time, buyers can save up to £200 a month, plus an initial deposit. “Once they receive the government bonus, it will be added to the money you are putting towards your first home”, the page read in April this year.
“This is quite an extraordinary step from the government and providers to effectively change the goal posts for first time buyers who have saved in a Help to Buy ISA” according to Mark Hayward, NAEA managing director. On the Halifax website on Friday night, the Help to Buy ISA appeared to be promoted as a way of saving for a housing deposit.
However, last week, the Treasury moved to update government websites to clarify the applications of the government top-up, making clauses stating that it can not be used towards at the time of paying a deposit more prominent, and clarifying that savers only receive the additional support on completion of their purchase.
A Treasury spokesperson said: “The Help to Buy ISA has been communicated in line with existing government and industry practices”.
Savers have expressed their shock after it was revealed the government’s Help to Buy ISA can not actually be used by first time buyers towards a deposit on a house. “The scheme rules and associated material has always been clear that the bonus will be paid just prior to completion and will go towards the equity in the property”. Users can save £200 a month, up to a total of £12,000.
The Government launched this scheme declaredly to help people save the large exchange deposit required to buy a home.
A Treasury spokesman insisted the scheme was proving “hugely popular” helping more than half a million buyers save towards their first home and with thousands of bonuses having been paid out already.
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You can open an account with a one-off lump sum of up to £1,000 in addition to the monthly maximum, while couples buying together can combine their bonuses, giving them boost of up to £6,000.
