Saving up for a deposit on your first home in Cardiff can be a real struggle, especially if you’re on a low income.
There will soon be help at hand, though, with a new savings scheme created by the UK government, Help To Save.

What is Help To Save?

It’s a new government-backed saving scheme. The aim is to support working people on low incomes and help them build up their savings.
Over four years, regular savers can deposit up to £50 per month and could get up to £1,200 in tax-free bonuses.
It is open to people who receive working tax credits, and people receiving universal credit with a household income equivalent to at least £120 a week – 16 hours per week or more at the national living wage.
The scheme is administered by HM Revenue and Customs.

How does it work?

People can save up to £50 per month each.
Then, at the end of two years, a 50% bonus will be paid, based on the highest balance achieved during that time.
They can carry on for another two years and get another 50% bonus at the end of that.
So, anyone saving the maximum £2,400 over four years will get a £1,200 bonus.
The money can be withdrawn at any time, but that could affect the bonus being paid.

How can this help first-time buyers?

The savings scheme can be used alongside a Help To Buy ISA.
Like any other ISA, you can save into it monthly, up to maximum of £200 a month. When you’re ready to put your money into a deposit on your new home, the government will give you 25% of the balance of your savings.
In effect, you get £50 for every £200 you save. The maximum bonus paid is £3,000 for one person, or £6,000 for a couple who combine their savings.
You have to save a minimum of £1,600 in your Help To Buy ISA to qualify for the payments.
If you have a lump sum of up to £1,000, you can open the Help To Buy ISA with it in addition to the maximum monthly payment.
So, if you’ve been saving under Help To Save, you could put that amount into the ISA as your lump sum.
To qualify for the ISA, you must be a UK resident, aged 16 or over, and buying your first property.
The residential property you buy must be in the UK and cost up to £250,000 outside London or up to £450,000 in London. It cannot be a buy-to-let property and it must be mortgaged.
Your solicitor or conveyancer will apply for the bonus when you are buying your home.
You can only have one Help To Buy ISA, but can combine it with a partner’s, and you can transfer it.
They will be available to new savers until November 30, 2019. You must claim your bonus by December 1, 2030.
If your house purchase falls through, you will be able to re-open your ISA.

Damon Ormonde, Managing Director of Fortis Properties in Cardiff, said: “This is an excellent way to maximise your savings when you’re on a low income.
“It can take years to save a deposit for your first home, and it’s frustrating to see property prices increasing as you save,
“So, anything which helps reduce that time is a massive boost to first-time buyers. I’d encourage anyone who is eligible to take advantage of the Help To Buy scheme and the Help To Buy ISA.”

Are you looking for your first home in Cardiff? Call our local property experts on 02920 561111.