Osborne's Help to Buy ISA

With just six weeks to go until the General Election, we were not expecting anything drastic from Mr Osborne’s sixth budget . Interestingly, the Chancellor announced a new Help-to-Buy ISA to assist first time buyers saving mortgage deposits whereby the Government will top-up every £200 saved by the individual with an additional £50. Mr Osborne commented that it will “tackle two of the biggest challenges facing first-time buyers — the low interest rates when you build up your savings, and the high deposits required by the banks.”

Our research analyst, Lee Layton, believes that; “The proposed scheme will (like the Help-to-Buy equity loan & mortgage guarantee schemes) undoubtedly boost demand for starter homes, but unlike Help-to-Buy, this demand should be better distributed as participants save and enter the market at different times, preventing a possible super-charging at the lower end of the market.”

This initiative will not however alleviate the severe shortage of stock affordable to first time buyers; it will essentially create more demand. We were anticipating that this year’s Budget would address the escalating lack of supply and focus more on incentivising institutional investment in the Private Rented Sector, which would offer a bridge or transition for many people between the current levels of unaffordability of buying property and a longer-term rebalancing of the house price/ affordability ratio. However we await the revelation of the 20 ‘new housing zones’ with great expectations.”

Lisa Simon, 

Partner Head of Residential Lettings

T: 020 7518 3234 

E: lisa.simon@carterjonas.co.uk