Government’s Help to Buy ISA scheme in tatters
It transpires that the Help to Buy ISA scheme, introduced to help people onto the housing ladder and much-trumpeted by the Tories, does’t actually work, in that the money in the ISA cannot be used by first time buyers to fund their deposit.
It seems that the legal wording on these financial products only allows the ISA to be used on completion of the property transaction, whereas the deposit is required at the earlier stage of exchange of contracts. This drives a dagger into the heart of the supposed mechanism of the Help to Buy ISA and will leave many people who have put their money into this scheme high and dry.
To add further to the confusion, it now appears that the lenders have failed to point this out to investors when selling these products to them.
The Government and Treasury need to get a grip of this and quickly.
Instead of trying to distance themselves from this travesty they need to engage.
Sign to Right to Buy ISA Petition HERE.
Surely, all it would take is for the Treasury to agree to temporarily stump up an amount equal to the ISA between exchange of contracts and completion. The ISA could be put in trust for the Treasury, so that on completion it receives the money. Should the contract fall through then the deposit money goes back to the Treasury and the ISA remains untouched.
After all the expectation raising claims by the Tories that this ISA would help the first time buyer, it is the least they can do.
Rebecca Long-Bailey MP, Labour’s Shadow Chief Secretary to the Treasury, said on Saturday:
"Today's reports that the Tory's much vaunted 'Help to Buy ISA' cannot be used to pay for a deposit is a disgrace. People up and down the country are struggling to buy their first home and are being let down by the Government's failure to act.
"Once again the Tories are failing generation rent with empty promises. It is typical of the Tories to design a scheme that doesn't help working people get on the housing ladder but instead only provides a little perk to those that can already afford it.
"The Tory Government's failure to address the housing crisis is astonishing. In the last Parliament fewer new homes were built than under any previous peacetime government since the 1920s. It doesn’t matter which Tory Chancellor is in Number 11 – it’s clear the Conservative Party’s economic approach has failed.
"The country needs a different plan that will end austerity, and start to invest in the housing and infrastructure Britain needs. That’s why Labour would invest £500 billion, and establish a National Investment Bank and a network of regional banks, to rebuild and transform our economy so no one and no community is left behind."