In the UK’s last pre-Brexit Budget, Chancellor of the Exchequer, Philip Hammond announced that from 29 October stamp duty relief will be extended to those who purchase properties up to a value of £500,000 through the shared ownership scheme. On top of this, the policy will be backdated to the last budget so that anyone who has purchased a property through the scheme since 22 November 2017 will be entitled to a refund.
Whilst this is welcome news for first-time buyers, it adds to the often overwhelming amount of information and options available for them. Our team of Independent Financial Advisers is here to help first time buyers and guide them through their journey, making sure they understand and utilise potential benefits.
Over the past few years, the government has introduced considerable measures to help the next generation of first time buyers. These include the Help to Buy ISA in December 2015 and more recently, the Lifetime Individual Savings Account (LISA) in April 2017.
These products were designed to help young people (aged 18 to 40) save, as well as receiving a free bonus, courtesy of the UK Government. However many individuals are still not using the most appropriate product that best matches their circumstances and, as a result, missing out on the benefits available to them.
There are key differences between the Lifetime ISA and Help to buy ISA as seen below. For more information, please see our downloadable guide here:
|Lifetime ISA||Help to buy ISA|
|How long are they available for?||Indefinitely||Until 30 November 2019|
|What is the Maximum property value?||£450,000 anywhere in the UK||£450,000 for London, £250,000 elsewhere in the UK|
|What is the bonus?||25% Government bonus tax-free||25% Government bonus tax-free|
|When it is applied?||At the end of each tax year||Paid on the completion of first time house purchase|
|How long must I hold it?||Must be held for 12 months||
Must have a minimum of £1,600.00
(can be achieved in 3 months)
|What is the maximum annual contribution?||£4,000.00||£3,400.00 in year 1 and £2,400.00 in each year after|
|What is the maximum bonus?||
£33,000.00 if held of 32 years
(depending on the date of your birthday)
|Capped at £3,000.00|
|Who can open it?||Anyone aged 18-39||Any first time buyer aged 16 or older|
|What can they be used for?||First time property purchase or retirement||First time purchase only|
While both have unique benefits, it is important to understand the differences in order to make a decision that best suits your circumstances and provides the greatest benefits.
We advise our clients to consider these factors when purchasing their first time property:
Your savings and investment strategy plays a vital role in securing your financial future. Whether you are looking to invest for income, growth or both, we can help you find out which ISA option is best for you. To discuss your situation, please contact our Independent Financial Advisers on 029 22 67 57 30.