Looks like we’d better get used to the idea of being 25 and still living with our mums… The futures of aspiring homeowners in parts of England are looking pretty bleak, as the BBC has found houses to be too expensive even with the new Help-to-Buy ISA scheme – especially in London.
The scheme was introduced at the end of 2015 with the aim of helping first time buyers save for a home. However, if a rise in tuition fees wasn’t enough for young people to deal with, unfortunately a BBC investigation has examined the costs involved and found that house prices in parts of England are still too expensive for first time buyers, despite the help-to-buy scheme.
The scheme allows first time buyers to put a deposit into a tax-free savings account and get a 25% bonus, to a maximum of £3,000, when they eventually buy the home. But, the bonus is only available if the purchase price does not exceed the cap for that area – in many areas, the average price of starter homes exceeds the maximum purchase cap of £250,000, or £450,000 in London.
Housing charity Shelter said that the ISA has only helped “the lucky few” and that the government should focus on building more homes.
The BBC’s analysis found that overall, outside London, two-bedroom homes exceeded the cap in 28% of areas.
Within London, they found that average asking prices exceeded the ISA’s cap in 67% of areas in South East London, 61% in the South and 53% in the East. This comes in comparison to less than 5% of areas in the North East of England, the Midlands, Yorkshire and Lincolnshire hitting the cap. Goodbye studio apartment on Brick Lane, hello semi-detached in Wolverhampton.
The BBC also found bad news elsewhere;
Martin Lewis of MoneySavingExpert.com said that savers should not be put off opening a help-to-buy ISA. He told the BBC;
“It is a cash giveaway from the taxpayer. Even if you don’t end up using it to buy a house, you still have savings with a very favourable rate of interest.”
But Martin, we don’t want savings, we want to move out. Thanks again, David Cameron.