Help to Buy ISA: the best savings account first-timers are ever going to get

"Seller’s solicitors were accepting smaller deposits at exchange, lenders were taking this into account when making their affordability assessments, and everything was being squared up when it came to the completion."

I hate to be something of an old curmudgeon about this but, back in my day, the thought of the Government providing me with a nice cash bonus to put towards my deposit, on top of the interest generated, seemed like a fanciful dream. Now, of course, I recognise that the whole housing/mortgage/lending landscape has moved on a lot since then, and potential first-timers have a large number of hurdles to joint over, but let’s not think that this State-delivered present is anything normal.

The initial furore came from the ‘revelation’ that the Government bonus wasn’t paid at the time when the borrower hands over the ‘exchange deposit’ for their property, but instead at completion. From this we had words bandied around that this was some kind of mass ‘deception’ and that first-timers were therefore losing out. The fact this had been within the ‘small print’ of the scheme since it was launched and the conveyancing profession was effectively having no problem with this, seemed to be lost on some talking heads.

As is normally the case, conveyancers made (and are making) this work – we heard from many firms within the Conveyancing Association effectively saying that, when it comes to HTB ISAs, seller’s solicitors were accepting smaller deposits at exchange, lenders were taking this into account when making their affordability assessments, and everything was being squared up when it came to the completion. Thus, HTB ISA savers were (and are) getting their bonus and they are seeing the full value of that when they come to complete.

Just this weekend, it was revealed that those purchasing under shared ownership schemes were the latest HTB ISA savers to be ‘ripped off’. This is because the bonus is only paid out for properties under £250k outside London, and £450k within the capital; the argument being that if someone was buying for example a £150k share of a property valued at £300k in total, they wouldn’t get the bonus.

Again, I’m not so sure there’s anything to see here – there is a maximum value of the property allowed within the Scheme and whether the borrower is buying a share or not, that maximum value has to be adhered to. Forgetting the point that most first-time buyers are unlikely to be buying properties that breach that value anyway, then the rules still seem fair to me given they are designed to appeal to typical first-timers not those who are buying properties worth close to half a million pounds and over. One would argue that these may not be described as ‘typical’ regardless of whether they are buying a share or not.

However, in the wider scheme of things, my belief is that this type of scheme should be manna from heaven for most first-timers given the bonus that can be earned and the fact most savings rates today don’t get anywhere near this type of return. Advisers clearly have a duty here – firstly to portray the benefits to those clients who may be struggling to attain the deposits required, and secondly, to let them know that the professionals in charge of the process, namely conveyancers, are able to make this work for them despite the headlines and the mis-information that is being pedalled.

I’ll not say this has been the best communicated scheme in the history of Government schemes, but it’s pretty damn close to the best savings account potential first-timers are ever going to get, and the generous returns on offer cannot be matched elsewhere. It is a no-brainer and no amount of scare-mongering should change that.