Instant Online Valuation

First Time Buyers

Date Published 07 January 2019

A new survey conducted by the Post Office has said that the average first time buyer will spend 4 years saving for their deposit. The research suggests that first time buyers are more willing to sacrifice their lifestyle to save for a home of their own. 31% of first time buyers said that they would be willing to make major cut backs in order to save their deposit & 23% said they were prepared to save for longer to fulfil their dream of owning a property. 19% were happy to compromise on the location of their home while only 17% would compromise on a garden or the number of bedrooms.
Liverpool is the 3rd most affordable city in the UK when compared to 50 other major cities in the UK. The average price of a house in Liverpool £122,137 meaning that the average deposit needed would be £18,320 which works out at 15% of the properties value. With that in mind a help to buy ISA could be of help.

Help to Buy ISA –
• You can save up to £1200 in your first month & £200 each month after that.
• The state adds 25% tax free to whatever you save in your ISA when you're ready to buy a home. You just need to have at least £1600 saved to qualify for the bonus. The most you can get from the bonus is £12,000. If you have more saved you can use it for your house you just won't get any more money for it.
• Any first-time buyer over 16 can open one and it's definitely worth doing. You can open the help to buy ISA up until December 2019 & you can save until December 2029. Your bonus will be added as long as you use it for your house sale by 2030.
• Couples are treated separately & can have an ISA each which means double the bonus.
• Your ISA savings can be used on any property costing under £250,000 as long as it's for a residential mortgage.
• Your solicitor will apply for the bonus cash when you're ready to complete your house sale although this may come with a fee (from your solicitor).
• Help To Buy ISA only helps with mortgage deposit not the exchange deposit so be aware you can only use the bonus cash at completion.
• You can withdraw money from your ISA whenever you please even if you decide not to buy a property you just won't receive the bonus.
• A lifetime ISA is better than a Help To Buy ISA but there's less flexibility with that.

Lifetime ISA-
• This is a tax free ISA that you can put £4000 in per year. The 2 main purposes for this ISA are for first-time buyers or people looking to save into retirement. If you use the ISA for your home deposit you can then still keep it open to use for your future.
• You can either save £4000 in a chunk or in bits over the year and then you'll then get 25% bonus on top of that. The 25% bonus will be paid into your ISA monthly until you hit age 50.
• Once the bonus is in your account you will then accrue interest on top of that as well as your money that you're saving.
• The max bonus is £33,000 if you open the ISA at 18 & max it out until you're 50.
• You need to be over 18 but under 40 to open a LISA. Open it as soon as possible to make the most of it.