After its launch late in 2015, the Help-to-Buy ISA is coming to an end this month. November 30^th is the last day aspiring property owners, keen to take their first step on the ladder, can take advantage of this generous saving scheme.

The accounts are easy to open, with as a little as £1 and are available from both banks and building societies. This particular ISA has been extremely popular, which is unsurprising given the chance to receive a boost of up to £3,000 from the government, depending on the amount of money you save.

In simple terms, the government is offering savers a bonus of 25 percent; for every £200 saved, a bonus of £50 is applied, up to the maximum £3,000, as long as certain criteria are met:

• Account is only for those who have never bought a property
• The maximum amount that can be saved in a single month is £200
• Government bonus limited to £3,000 – you need to save £12,000 to achieve this
• The ISA can be used to buy a home up to the value of £250,000 (£450,000 in London)
• If you have existing ISAs, you must transfer the value
• You can save into the Help-to-Buy ISA until November 2029

If you miss the deadline you will have to opt for the newer Lifetime ISA (LISA), which is similarly aimed at first-time buyers, but also those saving for retirement. Offering lower interest rates and fewer choices than the Help-to-Buy ISA, the new LISA make it important for savers to act now.

LISA is good but could be better

According to recent research, the current average interest rate for a Help to Buy ISA is 2.41 percent (based on the top 10 best rates), compared to an average rate of just 1.20 percent for a cash LISA. The LISA is really not as appealing yet as the Help-to-Buy ISA as competition amongst providers has not yet reached the same level.

You must be 18 or over but under 40 to open a Lifetime ISA and can save up to £4,000 each year, until you’re 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year.

We’re only really concerned with home buyers in this blog, so we’ll just look at the criteria for using the LISA to buy your first property:

• The property costs £450,000 or less
• You buy the property at least 12 months after you start the Lifetime ISA
• You appoint a conveyancer or solicitor to act for you in the purchase – the ISA provider will pay the funds directly to them
• You are buying with a mortgage

And that’s it, not all bad, but not as attractive as the current more generous scheme with Help-to-Buy ISA, so the advice is act now, before the November 30^th deadline.

If you have any property related issues you’d like to discuss with a well-informed property professional, please contact Ansons’ Head of Residential Conveyancing Julie Tomasik on 0121 716 3732 or email jtomasik@ansons.law