First-time buyers are being urged to hurry if they want to take advantage of a free £1,000 towards their dream home. Getting on the property ladder can be a struggle for many people, especially as the cost of living crisis continues to hit household finances hard.
But prospective purchasers can take advantage of a government scheme that could add a welcome £1,000 to their budget - as long as they act before April 5.
George Mansfield, co-founder of accountancy firm Kyzen Sports, said: “Taking your first step on the property ladder isn’t easy for a lot of people, so every little bit of help is most welcome. The Government’s Lifetime ISA is a great way for first time buyers to add to their pot, with an extra 25% added to whatever you deposit.
“The maximum yearly allowance is £4,000, so adding that amount to your account would see the Government boost it with another £1,000. However, if you want to take advantage then you need to act fast, as it goes by the tax year calendar, so this year’s bonus is only available until April 5. Anyone between the ages of 18-40 can open a Lifetime ISA, but it’s important to be aware there are rules on what you can withdraw the money for.”
Lifetime ISAs were introduced in April 2017 with two aims - to help first time buyers get on the property ladder and to help people save for a pension. Savers can benefit from the 25% government bonus for payments made until they reach the age of 50, while the first payment must be made before the age of 40.
However, the extra cash is only added if the money is used for certain purposes. These include buying your first home, if you are aged 60 or over, or if you have a terminal illness which has left you with less than 12 months to live.
It’s also important to be aware the bonus is only available if the home being purchased is worth less than £450,000 and the property is bought at least 12 months after making the first payment into the ISA. The rules also require buyers to use a conveyancer or solicitor to act on their behalf and that the property is being bought with a mortgage and not as a cash buy.
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Mr Mansfield added: “Buying a first home can be fraught with difficulties and it’s important to know all of the potential help schemes available - as well as their potential pitfalls. Lifetime ISAs can be a really useful tool to help save for your deposit and come with the added benefit of the Government bonus. However, terms and conditions apply so it may be advisable to speak to a financial planner to assess all of the options available to help you buy your dream home.”
