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Almost half of English homes will be ineligible for Help to Buy by March 2017

Posted 26 September 2016 by Ben Salisbury

New research shows that 46% of homes in England will be valued higher than the limit to qualify for the government's Help to Buy ISA by March 2017...

Almost half of the homes in England could be unobtainable for people looking to buy their first home through the government’s Help to Buy Isa by spring 2017, according to new research from online estate agent eMoov, the highest rated online agent offering expertise of the high-street.

Help to Buy Isa’s were introduced in December 2015 and can be used to buy properties valued up to £450,000 in London and £250,000 elsewhere. They give first-time buyers the opportunity to save £200 a month in a dedicated Isa that the government will top up by 25%, up to a maximum of £3,000.

eMoov analysed average house prices in all 326 districts in England, working out which areas have prices above the maximum property values eligible for the scheme and found that 46% of homes in England would exceed the Help to Buy Isa limit by spring 2017.

In December 2015, there were already 101 postal districts where property values exceeded the value eligible for the scheme, 17 in London and 84 across the rest of the country. In the eight months to July, a further 28 have seen price rises making them ineligible too. At this rate a further 21 will also breach the Help to Buy limit values, taking the total to 150 by March 2017

The same analysis for Scotland and Wales found that the average house prices for the entirety of both countries was within the £250,000 threshold and should remain so until at least next spring.

Founder and CEO of eMoov.co.uk, Russell Quirk, said: “Historically Help to Buy has been of little help to the nation’s aspiring homeowners and it is plain to see why when you look at the numbers.

“Although you must at least appreciate the government’s attempt at introducing a leg up through the ISA, the current pace of price growth across the market in England means that it will soon become irrelevant to the average buyer across nearly half of the country.

“The figures suggest that by March of next year, for those looking for government help to buy in London in particular, just nine of the capital’s 32 boroughs will be a viable option.”

The Help to Buy Isa scheme was recently criticised when it was discovered that potential buyers would be unable to use the government bonus as part of their deposit because it would not be given until the property has been purchased. The government has introduced a Lifetime Isa which will be able to be used as part of an initial deposit on a property when contracts are exchanged.

The Help to Buy Isa is due to end in 2019 and savers will be able to transfer funds into a Lifetime Isa from April 2017 or continue saving into both, but they can only use the bonus from one scheme to buy a house.

Russell Quirk added: “Across England there are still plenty of areas available below £250,000 however, if you do need help to get on the ladder but would prefer to choose where you live rather than have it dictated by the government, the only option is to look further north or across borders to Wales and Scotland.”

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