Help to Buy ISA giant deception affects half million savers

How would you feel if you entered a Help to Buy ISA scheme because the then Chancellor George Osborne told you it would provide ‘direct Government support for deposit on your home’, only to find that it was all a giant deception and you did not have enough for the deposit?

Half-a-million savers have found or will soon discover that their Help to Buy ISA investments are not what the Chancellor led them to believe. Experts are warning that savers are likely to be left with a surprising shortfall in their finances.

You have to buy the house first before the Government help comes through – which defeats the whole reason for having the scheme.

Help to Buy ISA ScandalIf you saw this NatWest Bank advert and read these words from the Nationwide Building Society: “When you are ready to buy your property, your conveyancer claims your Bonus (25% of your closing balance) from the Scheme, to put towards your purchase,” you would think the bonus was there before completion of purchase. IT IS NOT!! (Image: Adapted from:

Help to Buy ISA bonus

According to the Daily Telegraph, experts are warning that Help to Buy ISA savers cannot use a 25% Government ‘bonus’ towards the deposit when they want to purchase their home.

According to the Treasury, the bonus is only payable when the house purchase is completed. It adds that the scheme was designed to reduce the size of a purchaser’s mortgage by boosting the amount of equity they put in.

It’s a bit like a father telling his son, who is saving to buy a car, that he will give him half the value of a car if he manages to save the other half. However, when the son has half the value saved up, the father says “I’ll only give it to you after you have bought it.”

So really, the scheme is only any good for people who do not need the bonus, which defeats the whole object of getting more people onto the property ladder – it only helps those who would have managed to buy a house without Government help anyway.

George OsborneWhen George Osborne was Chancellor of the Exchequer, the second-most influential person in the UK, he had a team of top civil servants in The Treasury. Together, they thought up the Help to Buy ISA scheme. It is unbelievable that this group of ‘experts’ – our country’s finest – could devise such a useless and self-defeating scheme. (Image:

A scandal

In an interview with The Telegraph, Andrew Boast, who works for London-based Sam Conveyancing said the condition – not releasing the bonus until the purchase is completed – undermines the whole point of having the scheme.

Mr. Boast said:

“It is a scandal. The Government launched this scheme declaredly to help people save the large exchange deposit required to buy a home.”

“But what unsuspecting first-time buyers are now horrified to discover is that under the scheme rules they cannot use the bonus as part of this deposit.”

On the Sam Conveyancing website, Mr. Boast writes regarding Help to Buy ISAs:

“The guidelines and rules are full of caveats that could affect whether you actually can get a bonus especially if you are thinking of using your ISA to fund your deposit (you can’t do this).”

The Treasury insists the scheme is extremely popular and is helping over 500,000 buyers save towards the purchase of their first property. It says thousands of bonuses have already been paid out.

A Treasury spokesperson said:

“It has always been the case that money saved in a Help to Buy Isa is for an exchange deposit, with the bonus of up to £3,000 per Isa from the Government going towards the total funds available for the property transaction.”

“The Government has published clear guidance and the industry is fully aware that the bonus is only paid on completion.”

Under the Help to Buy ISA scheme, people planning to buy a house can save up to £200 per month plus an initial deposit. When they use it to buy a house the Government adds a 25% bonus, which can be worth up to £3,000.

About Help to Buy ISAs

– You place an initial £1,000 deposit, after which you can save up to £200 per month.

– When you put your ISA balance towards purchasing a property, the Government adds a 25% bonus. To get the bonus your balance must be between £1,600 and £12,000.

– In order to claim the maximum £3,000 bonus, you would need to have saved for 55 months.

– The ISAs can be used for properties worth up to £450,000 in London and £250,000 in the rest of the country.

– To qualify for the 25% bonus, your property must be in the UK and within the price limits mentioned above. It cannot be a second home or a buy-to-let property, and has to be bought with a mortgage.

Video – Help to Buy ISA scandal

In this video, the speaker explains in easy-to-understand terms why the Help to Buy ISA scheme does nothing to help first time buyers get onto the property ladder.