Help to Buy Isa under fire over Govt deposit clause

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It has emerged first-time buyers cannot use the Help to Buy Isa to boost their deposit, after the Government introduced a clause limiting the bonus until after completion.

The Telegraph reports more than 500,000 people have taken out the Isas since they were launched by former chancellor George Osborne in the 2015 Budget.

Help to Buy Isas have been set up to help renters save for a deposit, topped up by a 25 per cent Government contribution or “bonus”.

But the wording of the scheme means the top-up on savers’ cash will not be paid out until the sale has completed.

The Telegraph says the Treasury structured the Help to Buy Isa to stop people using the money without buying a house.

A Treasury spokesman says the Government bonus was meant to cut the size of savers’ mortgages by increasing the equity they put in after completing.

The Help to Buy Isa launched on 1 December. Users can save £200 a month, up to a total of £12,000.

To date less than 1,500 have used the scheme to buy a home.

SAM Conveyancing director Andrew Boast told the newspaper: “It is a scandal. The Government launched this scheme to help people save the large exchange deposit required to buy a home.

“But what unsuspecting first-time buyers are now horrified to discover is that under the scheme rules they cannot use the bonus as part of this deposit.”