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One Help to Buy ISA Opened Every 30 Seconds, Says Osborne
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
The Government’s Help to Buy ISAs have been opened at a rate of one every 30 seconds since the scheme launched on 1st December 2015, according to Chancellor George Osborne.
The scheme, announced in the Budget last March, gives prospective first time buyers £50 for every £200 they put in the tax-free account. Hopeful homebuyers can save up to £12,000 in the ISA, entitling them to £3,000 of Government money towards their deposit.
The Treasury reports that 250,000 people have opened a Help to Buy ISA since the launch, equivalent to 3,000 a day or one every 30 seconds.
Data from a series of banks that offer the accounts suggests that 75% of the new savers are aged 30 and under.
Opponents to the scheme say it could fuel demand for homes, without increasing supply, and the £2 billion cost to the taxpayer over the next five years could have been better used to pay for thousands of affordable homes.
One Help to Buy ISA Opened Every 30 Seconds, Says Osborne
On a visit to a Help to Buy housing development in Sandbach, Cheshire yesterday, Osborne denied that the scheme is treating a symptom rather than a cause of declining homeownership.
“The best thing the Government can do is to make sure that homes are being built for families in the right places and we have the right infrastructure,” he added. “The fact that so many people are making use of the Help to Buy ISA says to me that there’s a lot of pent-up aspiration there – there are a lot of families who want to get on the housing ladder.”1
The Policy Manager at lobby group Generation Rent, Dan Wilson Craw, gives his opinion on the scheme: “It’s not a big surprise that free money from the Government is proving so popular. The danger for first time buyers is that their extra purchasing power will simply result in estate agents putting their asking prices up.”1
And Campbell Robb, the Chief Executive of housing charity Shelter, adds: “The fact is, with house prices soaring by almost £20,000 in the last year alone, this is nothing more than a drop in the ocean. In many parts of the country, even the maximum amount you could save with Government help won’t be enough for a deposit, and, with half of renters’ incomes swallowed up by housing costs, for millions, saving anything at all is impossible.”
He believes: “This money would be far better spent on building homes that people on ordinary incomes can actually afford to rent or buy in the first place.”1
The new Treasury statistics arrive as Labour announces a new independent review into the fall of homeownership – a report led by Peter Redfern, the Chief Executive of Taylor Wimpey.
The Shadow Minister for Housing and Planning, John Healey, insists that increasing homeownership is Labour’s housing priority.
He explains why: “A million more households became homeowners under Labour, but homeownership is now in free-fall.
“Young people aspiring to own a home have been the hardest hit. What used to be a natural part of growing up is becoming a luxury for those on the highest salaries, or whose parents have the deepest pockets.”1
Research by the House of Commons Library, commissioned by Labour, found that 280,000 fewer households headed by under-25s owned their own home in 2015 compared to 2010.
The greatest decline has been among young people in professional jobs – 150,000 fewer of these households own a property, down 16% on five years ago.
The amount of young people in working class jobs that own their home is down 20%, or by 68,000 households. Only one in five young working class households own a home.
1 http://www.theguardian.com/money/2016/feb/04/savers-open-250000-help-to-buy-isas-two-months
