New scheme for First Time Buyers

George Osborne used the Budget to announce a new savings scheme aimed at helping First Time Buyers get the deposit they need to buy a home.

The Help to Buy ISA will launch in the Autumn of this year. It will allow people to deposit £1,000 at the start and then save up to £200 per month. When they use the saving to buy a home the government will add 25% to the amount – the maximum top-up of £3,000 will be added to an account with £12,000 saved. Since the accounts are personal, a couple could get a £6,000 top-up from the government towards their deposit.

The government claimed the scheme would give buyers the 10% deposit they need for the average home – but it would be more like 5% in the South East. And some commentators have wondered if the scheme itself may help to push house prices up even further.