The Help to Buy ISAs in the Budget are of little help to London’s first-time buyers, as the maximum someone can save is less than a fifth of the average £76,500 deposit needed for a first property in the capital.
The new scheme allows would-be-buyers to open the new savings product with up to £1000, and then add a maximum of £200 a month thereafter.
This means it would take a young Londoner four and a half years to hit the £12,000 top threshold, to which the Government would add a further £3000 if the cash was used to buy a first property.
Elsewhere in the UK that sum may substantially cover the required deposit.
However, in London, where the average first-time-buyer’s down payment stands in excess of £76,000, according to property firm JLL, that £15,000 makes far less of a dent.
Experts warned the “Bank of Mum and Dad” would inevitably still be required.
Cormac Marum, tax expert at Harwood Hutton, said: “First-time buyers in London will not be able to rely on help-to-buy ISAs to get on the property ladder.
“The deposit can also only be used to buy a house of up to £475,000 in London, and £250,000 outside.”
