How helpful is the Help to Buy ISA? FTBs today could buy in 71.5% of the UK

October 25, 2019

With the November deadline looming, time is running out to take advantage of the Government’s Help to Buy ISA and leading estate agent comparison site, GetAgent.co.uk, has looked at just how helpful it can be when it comes to buying in the UK property market.

GetAgent.co.uk looked at the current deposit saved for those that took advantage of the ISA when it first launched and where across the UK you can buy using this as both a 5% and 10% mortgage deposit based on the current first-time buyer house price.

Launched in December 2015, the ISA allows an initial maximum start-up cost of £1,200 and boosts any further deposits by 25% capped at £200 a month, with the Government paying in £50 for every £200 deposited. This bonus is capped at £3,000 meaning you would have to tuck away £12,000 to make the most of it.

To qualify, you need to be a first-time buyer and purchase a house with a value no more than £250,000 or £450,000 in London.

If you opened a H2B ISA when it was launched back in December 2015, you would currently have a savings pot of £10,600, with the Government pitching in a further £2,650, a total of £13,250 over the last 47 months.

Should you hold out for a further seven months to reach the maximum amount allowed, you would have a saving pot of £12,000 and a further £3,000 from the Government – a total of £15,000 for a deposit.

But back to today. With a cash pot of £13,250 and based on using this sum as a 5% deposit on a mortgage (one of the most common for first-time buyers), your Help to Buy ISA could bag you a house in 71.5% of UK area – pretty helpful indeed.

If you were to use your H2B ISA for a 10% mortgage deposit, you could buy a property in 14.6% of UK areas based on the current first-time buyer house price, not as helpful but better than a life stuck in the rental sector.

Based on the current average first-time buyer property price, all regions of the UK would allow you to buy with a H2B ISA of £13,250 as a 5% mortgage deposit, other than London.

However, when it comes to a 10% deposit, just the North East would see you qualify with £13,250 accounting for 12% of the current average property cost.

Where can you make it stretch the most?

The most expensive area of the market a 5% deposit would allow you to buy in is Reading, with a deposit of £13,205 based on the current average house price. East Dorset (£13,202), Basildon (£13,030), Aylesbury Vale (£12,997) and South Northamptonshire (£12,938) are also amongst the best markets you can buy in with a H2B ISA.

When it comes to a 10% mortgage deposit, the Orkney Islands (£13,242), Nottingham (£13,207), West Lothian (£13,174), Wakefield (£13,147) and Bassetlaw (£13,065) are amongst the most valuable markets in which you could buy with your H2B ISA.

Of course, if you would rather make your ISA stretch the other way and pay a higher mortgage deposit for a more favourable payment plan, Burnley, East Ayrshire, Inverclyde, Hyndburn, Pendle and Blaenau Gwent are home to the UK’s most affordable average house prices and a H2B ISA would form between 15%-18% of a mortgage deposit.

Founder and CEO of GetAgent.co.uk, Colby Short, commented:

“Help to Buy in its various forms certainly has its critics and while the original Help to Buy scheme has no doubt pushed up prices by fuelling demand without the additional supply, the ISA has at the least, spurred more people to save with one eye on climbing the ladder in the future.

Unfortunately, this only goes a small way in bridging the huge affordability gap that keeps many priced out of the market and as a result, many are turning to much higher rates of loan to value in order to take their first step.

Although the November deadline is looming to take out a Help to Buy ISA, you have until 30th November 2029 to pay in and 1st December 2030 to claim any bonus accrued, so it’s well worth looking into if you’re thinking of buying in the near future.”

Total Help to Buy ISA saving to date if taken out upon launch in December 2015 = £13,250
 
1. Table shows the average cost of buying for a FTB by region, the 5% & 10% deposits required, as well as the current H2B ISA saving of £13,250 as a mortgage deposit percentage of average house price.
Location
Ave FTB house price
Deposit (5%)
Deposit (10%)
ISA as a % mortgage deposit
North East
£110,301
£5,515
£11,030
12.0%
North West
£137,869
£6,893
£13,787
9.6%
Yorkshire and the Humber
£139,284
£6,964
£13,928
9.5%
East Midlands
£162,046
£8,102
£16,205
8.2%
West Midlands
£160,412
£8,021
£16,041
8.3%
East of England
£241,700
£12,085
£24,170
5.5%
London
£410,056
£20,503
£41,006
3.2%
South East
£257,147
£12,857
£25,715
5.2%
South West
£210,461
£10,523
£21,046
6.3%
England
£206,336
£10,317
£20,634
6.4%
Wales
£140,046
£7,002
£14,005
9.5%
Scotland
£122,503
£6,125
£12,250
10.8%
Great Britain
£193,549
£9,677
£19,355
6.8%
2. Table shows the areas where the current H2B ISA saving of £13,250 can buy you the most expensive property based on its use as a 5% mortgage deposit on the current FTB house prices.
Location
Ave FTB house price
Deposit (5%)
ISA as a % mortgage deposit
 
Reading
£264,082
£13,204
5.0%
East Dorset
£264,042
£13,202
5.0%
Basildon
£260,592
£13,030
5.1%
Aylesbury Vale
£259,535
£12,977
5.1%
South Northamptonshire
£258,766
£12,938
5.1%
Maldon
£258,294
£12,915
5.1%
Purbeck
£257,333
£12,867
5.1%
Lewes
£256,895
£12,845
5.2%
Test Valley
£254,500
£12,725
5.2%
Castle Point
£254,282
£12,714
5.2%
West Sussex
£253,870
£12,693
5.2%
Crawley
£253,768
£12,688
5.2%
Warwick
£253,463
£12,673
5.2%
City of Bristol
£253,167
£12,658
5.2%
Stratford-on-Avon
£251,044
£12,552
5.3%
3. Table shows the areas where the current H2B ISA saving of £13,250 can buy you the most expensive property based on its use as a 10% mortgage deposit on the current FTB house prices.
Location
Ave FTB house price
Deposit (10%)
ISA as a % mortgage deposit
 
Orkney Islands
£132,420
£13,242
10.0%
City of Nottingham
£132,070
£13,207
10.0%
West Lothian
£131,741
£13,174
10.1%
Wakefield
£131,467
£13,147
10.1%
Bassetlaw
£130,652
£13,065
10.1%
Cumbria
£130,203
£13,020
10.2%
Allerdale
£129,332
£12,933
10.2%
Carmarthenshire
£129,139
£12,914
10.3%
Moray
£128,121
£12,812
10.3%
Kirklees
£127,873
£12,787
10.4%
City of Aberdeen
£126,388
£12,639
10.5%
Wyre
£126,330
£12,633
10.5%
Ashfield
£126,199
£12,620
10.5%
Torfaen
£126,103
£12,610
10.5%
South Yorkshire
£125,431
£12,543
10.6%
3. Table shows the most affordable areas based on current FTB house price where the current H2B ISA saving of £13,250 would account for the largest mortgage deposit %.
Location
Ave FTB house price
Deposit (5%)
Deposit (10%)
ISA as a % mortgage deposit
Burnley
£75,929
£3,796
£7,593
17.45%
East Ayrshire
£77,564
£3,878
£7,756
17.08%
Inverclyde
£84,653
£4,233
£8,465
15.65%
Hyndburn
£86,030
£4,302
£8,603
15.40%
Pendle
£86,508
£4,325
£8,651
15.32%
Blaenau Gwent
£87,589
£4,379
£8,759
15.13%
North Ayrshire
£88,571
£4,429
£8,857
14.96%
North Lanarkshire
£89,073
£4,454
£8,907
14.88%
County Durham
£89,422
£4,471
£8,942
14.82%
West Dunbartonshire
£91,367
£4,568
£9,137
14.50%
Hartlepool
£91,446
£4,572
£9,145
14.49%
Merthyr Tydfil
£92,675
£4,634
£9,267
14.30%
Blackpool
£93,631
£4,682
£9,363
14.15%
Middlesbrough
£96,218
£4,811
£9,622
13.77%
Western Isles
£98,457
£4,923
£9,846
13.46%

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