Mortgages  

Isa will cut deposit-saving time by nine months – MAB

Isa will cut deposit-saving time by nine months – MAB

The time it takes for buyers to save for a deposit could be slashed by nine months with the introduction of the help-to-buy Isa, Brian Murphy, head of lending at Mortgage Advice Bureau, has claimed.

He said that the HTB Isa, announced in the Budget last month, would enable more first-time buyers to get onto the housing ladder.

“By paying a modest 10 per cent of their savings after tax into a HTB Isa, a couple would be able to reduce the time they needed to save for a deposit by as much as nine months,” he said.

Article continues after advert

“The average deposit of those using the HTB scheme remains far below those found in the wider marketplace, giving first-time buyers access to the housing market in a far shorter timescale than would otherwise be possible without parental help.”

This follows on from the latest MAB data, which showed that average deposits for the HTB mortgage guarantee scheme hit a 10-month high in February, at £9,936. This was up 9.2 per cent on January, and their highest point since April 2014’s £11,438.

Adviser view

David McKendrick, financial planner for Cheshire-based Equilibrium Asset Management, said: “The help-to-buy ISA is a great idea. It is a common request among our clients asking how they can support their children and grandchildren wanting to climb on the property ladder. We will be recommending that they use this great new saving incentive.”