More than 2,000 people have already cashed in their Help to Buy Isa just four months after launch – getting a bonus of just £421
Perplexing news from the Treasury, which has reported more than 2,000 people have so far cashed in their Help to Buy Isas – meaning they've made an average of just £421.
The figures, published this morning, showed 1,490 properties were bought in the four months to the end of March through the scheme, which gives savers a £50 government "bonus" for every £200 they save.
The catch? Although they are able to start the scheme with a £1,200 lump sum, savers can only put in £200 a month, and the government bonus only goes up to £3,000. So those cashing in already are missing out on a pretty decent wedge of cash. The figures showed 397 people cashed out in February, just three months after the scheme launched.
Read more: Everything you need to know about the Help to Buy Isa
This morning's figures showed 1,490 properties have been bought as a result of the scheme (multiple savers can club together to buy one property), at an average value of just under £164,000 (compared with the national average of £292,000). The average age of first-time buyer in the scheme was 29, compared to the national median of 30.
Danny Cox, a chartered financial planner at Hargreaves Lansdown, pointed out that the number of people cashing out now is low – there are roughly half a million Help to Buy Isas in total.
"The Help to Buy Isa was designed for regular savers, so some people found themselves in a position where they had a sufficient deposit to buy a house and took the opportunity," he said.
"Most people are trying to get on the housing ladder, and particularly when the market is moving so quickly, they want to do that sooner rather than later. At the end of the day, people want to get out of renting and onto the property ladder as quickly as possible."
To be fair, anything aimed at helping first-time buyers should be categorised as A Good Thing. Figures published yesterday showed first-time buyers paid a record average of £173,282 for their homes in May, 15 per cent higher than the £149,645 they paid during the same month last year.
"Brexit worries haven't dented first-time buyers' appetite to own their own home," said Your Move and Reeds Rains director Adrian Gill.
"Many still want to capitalise on the record low mortgage rates available at the moment which mean that monthly mortgage repayments are increasingly affordable."