Helping Children Buy Property – If you have been considering assisting your children to get a step on the property ladder, then this is as good a time as any.
There are a number of reasons for this, firstly given the current economic uncertainty, it is believed that there is potential for property prices to fall over the next two to three years. Secondly you can get assistance from the government in the form of an uplift on any contributions you make for your child.
This contribution uplift applies to monies placed in Help To Buy ISA’s, as these can be used to assist first time buyers buy a home with a value of up to £250,000 outside of London and £450,000 inside of London.
We understand from speaking to clients that they have been a little reluctant to make outright gifts to children in the past as their children might use the cash for another purpose, but with Help To Buy ISA’s they can only be used as a deposit for a house.
Help to Buy ISA’s have been available since 1st December 2015 and more 500,000 accounts have been opened since then. The popularity has been driven by the generous 25% cash bonus provided by the government.
The minimum bonus is set at £400 meaning you must have saved at least £1600 in the Help to Buy ISA.
The maximum amount of bonus is £3,000, meaning a total of £12,000 must have been saved.
In order to receive the bonus, you need to instruct the conveyancing solicitor to apply for it, once a house has been purchased.
The third reason to use Help to Buy ISA’s is that the interest rates available on these products tend to be higher than on other similar products.
If you plan to make a more substantial contribution do read another of my blogs.