• Rachael Panteney

The help to buy isa is no more – so what now?

~Lifetime ISA~

The Lifetime ISA or LISA allows you to save up to £4,000 every year and, like the Help to Buy ISA, the Government pays an additional 25%.

This means you have the potential to receive an extra £1,000 each year.

It is not only available to first-time buyers to help them buy their first home but it can also be used as a retirement saving vehicle (although if you are using a LISA for retirement saving you cannot access the money until age 60).

You must be between the ages of 18 and 40 to open the account.

LISA’s offer either a Cash or Stocks and Shares option. If you need help deciding which is best for you, give us a call.

The value of Investments can fall as well as rise. You may get back less than you invested.

~Shared ownership~

Shared ownership is a way for people on lower incomes to get onto the property ladder. Buyers purchase a share of the property and rent the rest, therefore the deposit and mortgage repayments are lower.

Buyers can increase their ownership over time in a process known as staircasing.

Shared ownership has now been around for 40 years.

You will need a household income of less than £80,000 (£90,000 in London) to qualify. But otherwise, there are no restrictions.

~Help to Buy Equity Loan~

The other wing of the ‘Help to Buy’ scheme is still around, but that is also due to be scrapped in 2023.

Help to Buy Equity Loan is available for anyone with a deposit of at least 5% and allows people to purchase a new build with only a 75% mortgage, with the rest of the deposit coming from a Government equity loan of 20% of the purchase price (40% deposit in London, meaning a 55% mortgage).

This is interest free for the first five years. After that interest is payable, although the equity loan can either be repaid, fully or partially, (typically in 10% increments of the updated property value), by either the sale of the property (whereby the government will receive their equity share percentage of the sale price) or it can be done via a remortgage.

1 view0 comments