Danielle McFadden and James Taylor, both 28, used a Halifax Help to Buy Isa to purchase a £270,000 three-bedroom terrace in Gravesend, for themselves and their seven-year-old son.
The couple, who used their savings to pay the £27,000 deposit on the house, had anticipated receiving a government bonus of £2,000, which they planned to put towards the sales fees
But as the property was above the £250,000 threshold for the government bonus, they were left empty-handed after the deal went through on 24 March – and they now face the prospect of taking on debt to meet the charges.
Ms McFadden told FTAdviser: “It was a bit of a shock. I just think when you are first told about the Isa you should be told about the bonus there and then. Now we have exchanged contracts we are stuck in this position.
“We put all of our money into the deposit. It is a bit unfair that nothing was said to us at the beginning or even the whole way through. If I was aware of it, I might have looked elsewhere.
“We can’t put extra wages towards it because we won’t get paid on time. Someone has said they can help, but if not I will just have to use the credit card - but then there is the interest.
“Growing up, I watched my mum in debt and always said ‘I do not want to go in debt’. I don’t want to get in this house and get in debt.
“We came up with every single penny ourselves. We have done all this and are going to start a new life in debt, which we have always tried to avoid.”
But a spokesperson for Halifax said the couple would have gone through the mandatory digital account opening pages, which explain the £250,000 threshold for property purchases outside London, during the application process.
The spokesman added: “Help To Buy Isa guidelines require conveyancers to check their clients’ eligibility as part of the purchase process, and ensure that the value of the clients’ property is less than £250,000 (outside London) or £450,000 (within London).
“Under the HM Treasury Help To Buy Isa scheme rules, all customers are made aware of the upper limit on property prices when opening their Help To Buy Isa. All customers agree to this criteria when opening their account.”
The couple’s broker, Melinda Bush, at Dartford-based Quartz Financial Services, said: “This isn’t the first time that buyers have been left in confusion.
"I believe there is a lack of clarity, and the danger with some, and particularly this case, is that the solicitor picked this up after exchange.
"Fortunately the buyers were still able to complete with help from family, but this could have been disastrous with the buyers losing a lot of money.
“The issue with the bonus not being allowed to be applied for until after exchange but before completion has been badly thought through by the Help to Buy agency, in my opinion.
"There is also a disparity between being able to use the Help to Buy Equity loan for properties up to £600,000 but only receiving a bonus via the Help to Buy Isa outside of London if you are buying up to £250,000 (£450,000).
"This couple were buying in the south east, about 10 miles outside of Greater London, where their terraced three bedroom house was still more than £250,000.”
simon.allin@ft.com
