Most first-time buyers don’t know when the Help to Buy ISA ends

First-time buyers are living in a time when it appears to be much harder to get that first step onto the property ladder than ever before. House prices have increased by a massive 554% in the last 30 years and the time it now takes so save for a deposit has also substantially increased.

According to Nationwide, a decade ago it would take the average first-time buyer in the UK less than five years to save a 10% deposit of £14,080. Contrast that with today when it takes on average six and a half years to save a 10% deposit of £18,480.

This is why many first-time buyers have turned to the government Help to Buy ISA – launched over three years ago, the Help to Buy: ISA offers first-time buyers the opportunity to save up to £200 a month with the government topping up their contributions by 25%, up to a maximum of £3,000.

But… many first-time buyers aren’t aware of the scheme’s details. Almost two thirds of prospective first-time buyers are unaware of the cut-off date for the Help to Buy ISA, research by specialist bank Aldermore has found.

The deadline to open a government Help to Buy ISA is 30 November this year but contributions can still be made until November 2029, and the cut-off date to claim the bonus is 1st December 2030 – so there’s still time for your loved ones to open an account and start claiming their 25% bonus for their first home.

Over four fifths of potential first-time buyers don’t know what the minimum government bonus is either, while 80% don’t know what the maximum is. There is also a lack of understanding about the scheme from parents too.

Almost nine in 10 parents of first-time buyers are unsure what the minimum government bonus is, while a similar proportion are unsure what the maximum bonus is. But, when the parents were given an explanation of what the Help to Buy ISA is, 86% said they would encourage their child to save into a Help to Buy ISA.

So, with only six months to go, if you or your loved ones would like to discuss the Help to Buy ISA so that they can start boosting their savings for when they’re looking to buy a home in the next three, five or even ten years, you should seek professional advice today.

MPs rally support for mortgage prisoners

Mortgage prisoners are predominantly those borrowers who took out a mortgage before the financial crisis but are now blocked from switching to better rates due to changes in lending practices.

There are now an estimated 200,000 homeowners that are trapped on high interest-rate loans with unregulated or inactive firms, and are unable to switch to a cheaper deal.

Mortgage prisoners are often told by lenders that they will be unable to afford a new deal under current lending rules despite a new product offering cheaper monthly payments than their existing one.

This can be even more frustrating for those who are trapped if they have continually paid off their high monthly bills and not let their account fall into arrears. However, there may be some good news for mortgage prisoners.

So, what’s being done to help those who are trapped on high interest-rate mortgages?
An all parliamentary group was launched in May to rally support for mortgage prisoners trapped by changes to lending rules and government loan selling. The group consists of MPs from all political parties and will give support in an effort to create tangible change for people who are trapped by their mortgage.

This issue prompted MP Charlie Elphicke to present a motion in the House of Commons to force lenders to treat such borrowers as “grandfathered” as a first step towards freeing the UKs mortgage prisoners.

This exemption would allow mortgage prisoners to switch lenders without meeting the affordability assessment brought in by new regulations. The mortgage would also be permitted without any regulatory penalty for the lender.

It’s not only MPs that have acknowledged that change is needed though. The FCA stated earlier this year that it is considering a change to affordability checks, which could allow people to switch to deals that are easier to pay.

So, if any of your friends and family are some of the 200,000 mortgage prisoners in the UK there could be some positive changes on the horizon with the backing of MPs and the FCA and we will continue to keep you updated.

If you or your loved ones would like to talk through your options, contact one of our advisers today.