The UK could soon offer Help to Buy ISAs to first time buyers, in an attempt to encourage more people onto the housing ladder.
The proposals, announced by Chancellor George Osborne during this week's 2015 Budget, formed part of the Conservative Party plans for the next parliament, should they win the upcoming May election.
The unexpected announcement arrives hot on the heels of the existing Help to Buy scheme, which has been linked by various factions to both boosting house building in the UK and helping to fuel price rises by driving up demand.
The scheme would allow people over the age of 16 to open an ISA with the aim of saving up money towards the deposit for their first home. The goverment, in exchange, would then top up the amount in the account with a 25 per cent bonus.
Buyers would be allowed to save up to Â£200 a month in the ISAs, with the government adding Â£50 for every Â£200 inserted. There is no minimum monthly deposit, while savers would also be allowed to deposit an initial sum of up to Â£1,000, in addition to the Â£200 monthly cap. Any state bonus would then extend up to a maximum of Â£3,000, to be paid upon the purchase of a property, preventing buyers from saving up, only to take away the government's cash.
"A 10 per cent deposit on the average first home costs Â£15,000," explained Osborne, "so if you put in up to Â£12,000 â weâll put in up to Â£3,000 more."
"A 25 per cent top-up is equivalent to saving for a deposit from your pre-tax income," he added. "Itâs effectively a tax cut for first time buyers."
The accounts would be available for people to open during the next four years, although there is no limit on how long they can be open for once created. Accounts would also be limited to one per person, rather than one per home, so that first time buyers planning to purchase a property together could both receive the bonus and combine them to afford a larger home between them.
The bonus would only be eligible for property purchases worth up to Â£450,000 in London and up to Â£250,000 outside London.
The proposals formed part of a raft of measures announced by Osborne in the run-up to the May election. Should the idea prove popular enough, it could well swing the vote in the Tories' favour, as a growing number of people struggle to afford a home. If they do when the election, the scheme will be introduced through banks and building societies from Autumn 2015.
Some were enthusiastic about the scheme.
"This is exactly what is needed to engage the first time buyer market," commented Mark Hayward, managing director of the National Association of Estate Agents, "particularly as we have seen the current criteria under the MMR constraining aspirations to buy a home."
"It is also timely, considering house price inflation out paces wage inflation, so this additional boost to first time buyers savings pots will help them at least keep apace rather than fall behind the inflationary curve."
There are concerns among some, though, that the measure will boost demand, rather than supply, only exacerbating the current imbalance in the housing market, thereby fuelling further price increases.
"[The announcement] tiptoes around the elephant in the room," says Adrian Gill, director of Your Move and Reeds Rains estate agents. "Itâs all well and good getting first-time buyer finances in shape, but it will amount to hollow words if there are no properties available for them to buy, and if competition continues to push house prices higher and higher. Helping homeowners requires both sides of the conundrum to be tackled. The Chancellor has certainly done a good job of boosting demand â but now more needs to be done to sort out supply."