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Leading Tory joins clamour for government to end Help To Buy ISA

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Tue 23 Aug 2016

Leading Tory joins clamour for government to end Help To Buy ISA

An influential backbench Conservative MP is the latest to speak out, urging the government to resolve the growing argument over the Help To Buy ISA.

At the weekend a newspaper revealed that - despite the measure being launched by former Chancellor George Osborne as a help to first time buyers - the 25 per cent ‘bonus’ which is a central part of the scheme will not be given to savers until after they complete their purchase.

This means it cannot be used, as originally suggested, as part of a deposit.

Then the National Association of Estate Agents argued that this problem should be solved so first timers can receive the bonus 25 per cent to help in the deposit - known to be one of the major obstacles for young purchasers of homes. NAEA managing director Mark Hayward suggested the government was effectively deceiving first time buyers over this.

Now Sarah Wollaston, Conservative MP for Totnes and known for her independent views critical of her own party at times, has taken to Twitter to voice her concern.

“Come on HM Treasury, sort this out. Absolutely everyone believed Help To Buy ISAs were for deposits, otherwise they don’t [help to buy]” she tweeted.

She also linked her tweet to an online newspaper story indicating that some banks participating in the scheme felt they were misled by the government over the timings and intentions of the Help To Buy ISA scheme.

Earlier this summer the government had an extensive PR campaign to promote the apparent success of the Help To Buy ISA scheme, claiming that no fewer than 555,000 would-be first time purchasers had opened savings of this kind in the first six months of their existence.

The accounts are aimed at first time buyers, allowing them to save money without having to pay tax on interest earned, and to qualify for a government bonus of 25 per cent if the saved money is used to buy a home.

Between the scheme launching shortly before last Christmas, and the end of May this year, some 2,090 bonuses were issued - the average value of each being £421.