Contingencies Fund Advance: Help to Buy ISA

Monday 25th January 2016 Written Statements

[The Economic Secretary to the Treasury (Harriett Baldwin)]

The Help to Buy: ISA was announced in the March 2015 Budget. Under the scheme first time buyers purchasing a property in the UK will be able to save up to £200 per month in a Help to Buy: ISA and receive a bonus of up to £3,000 The bonus amount is calculated as 25% of the balance in the buyer’s Help to Buy: ISA, (with a minimum of £400 and capped at £3000). The bonus will be paid upon the completion of the purchase of an eligible property.

The Help to Buy: ISA has been available since 1 December 2015 and 200,000 accounts have so far been opened. The first homes to be acquired using the scheme are expected to be purchased in early February 2016.

The resources for the bonus payments will form part of HM Treasury’s supplementary estimate 2015-16, which is expected to achieve Royal Assent in the associated Supply and Appropriation Bill in mid to late March. HM Treasury will therefore be utilising the Contingencies Fund to make the initial bonus payments that become payable prior to Royal Assent.

Parliamentary approval for additional resources of £20,000,000 for this new expenditure will be sought in a supplementary estimate for HM Treasury. Pending that approval, urgent expenditure estimated at £20,000,000 will be met by repayable cash advances from the Contingencies Fund.

[HCWS487]