As the 5-year anniversary for the final Help to Buy ISA accounts opening approaches, researchers at Bird & Co. examine the percentage of residential property sales involving the Help to Buy ISA every quarter since its inception, to assess how the home ownership incentive has been utilised in reality.
We analysed ONS data which showed the number of properties sold using the Help to Buy ISA in every Local Authority in the UK in each quarter, from Q3 2016 to the last dataset in Q1 2024. Comparing these figures against residential property sales data, a percentage of all sales in these regions involving the Help to Buy ISA was calculated.
By working out an average percentage across every quarter in each location, we found a top 10 and bottom 10 list of areas where the first-time buyer scheme was used the most and the least.
The deadline to open a Help to Buy ISA account was the 30th November 2019. As the ISA grant can still be claimed until November 2030, we also found an average for both before, and after this deadline to see if any clear patterns emerged.
In this article, we will break down the lists showing where the Help to Buy ISA was used the most and least. We will also explore how the use of the ISA increased dramatically in Q4 2021, and will propose which factors may have contributed to this.
Finally, we will highlight in which Local Authorities the use of the ISA increased after November 2019, and in which locations the use of it decreased following this date. As such, we can gain a broader understanding of the scheme's effectiveness over the past 9 years.
What is the Help to Buy ISA?
The Help to Buy ISA was a government savings account assisting first-time buyers in saving for a house deposit. Account holders could pay an initial sum of up to £1,200 on opening it, and then a continued monthly addition of up to £200 a month.
When a first-time home is purchased, the government will top up these savings by 25% (up to a maximum of £3,000). To claim this extra 25%, account holders must have saved a minimum of £1,600 (which would gain a bonus of £400), and the house price must not exceed £250,000, or £450,000 in London.
The scheme ended on 30th November 2019, but people who opened an account before this date can still pay into their ISAs until November 2029, and can claim their bonuses from the government until November 2030.
Top and Bottom 10 Locations for Help to Buy ISA Usage
By comparing the total number of residential property sales and the number of houses bought using the Help to Buy ISA, researchers determined which areas saw the greatest and smallest use of the scheme, on average, between Q3 2016 and Q1 2024.
10 Locations Where the Help to Buy ISA is Used Most
The 10 locations that saw the largest use of the Help to Buy ISA, and the percentage of total residential property sales completed using the Help to Buy ISA, were:
Position | Local Authority | Average % of Total House Sales Using the Help to Buy ISA |
|---|---|---|
1 | Kingston upon Hull | 3.54% |
2 | Sheffield | 3.16% |
3 | Gateshead | 3.01% |
4 | Lincoln | 2.99% |
5 | Chesterfield | 2.96% |
6 | Wigan | 2.94% |
7 | Nottingham | 2.92% |
8 | Wakefield | 2.90% |
9 | Newcastle upon Tyne | 2.89% |
10 | Plymouth | 2.83% |
Interestingly, all of the Local Authorities on this list are in England. The figures indicate that house prices in these areas are more likely to fall beneath the Help to Buy ISA limit of £250,000 than in other areas in the UK, which may suggest that these areas are more affordable.
With this in mind, it is interesting to note that 6 of the Local Authorities listed above are in Northern England, 3 are in the Midlands, and only 1 is in the South. This suggests that regions further towards the north are more affordable regarding housing.
10 Locations Where the Help to Buy ISA is Used Least
The 10 locations that saw the least use of the Help to Buy ISA, and the percentage of total residential property sales completed using the Help to Buy ISA, were:
Position | Local Authority | Average % of Total House Sales Using the Help to Buy ISA |
|---|---|---|
1 | Kensington and Chelsea | 0.09% |
2 | Hertsmere | 0.14% |
3 | Elmbridge | 0.14% |
4 | Epsom and Ewell | 0.15% |
5 | St Albans | 0.16% |
6 | Three Rivers | 0.18% |
7 | Epping Forest | 0.20% |
8 | Westminster | 0.20% |
9 | Windsor and Maidenhead | 0.20% |
10 | Waverley | 0.29% |
The expensive borough of Kensington and Chelsea saw the lowest percentage of houses bought using the Help to Buy ISA which, unsurprisingly, suggests that house prices here are likely to exceed the £450,000 limit for London.
All Local Authorities in this table are located in London (2) or the home counties (8), which suggests that people buying houses in London or the counties surrounding London are less likely to use the Help to Buy ISA to purchase their first homes as they may be too expensive.
House prices in the home counties are high due to the location’s proximity to London. In fact, the average house price in the home counties in 2024 was marked as £404,427.
Drastic Increase in House Sales Completed Using the Help to Buy ISA in Q4 2021
The percentage of house sales completed using the Help to Buy ISA in Q4 2021 is very significant. During this time, the average for all Local Authorities was 9.66%, compared to the full data average of 1.50%.
Some locations reached heights of between 20% and 25% in Q4 2021, including:
Local Authority | Q4 2021 Average % of Total House Sales Using the Help to Buy ISA | Full Data Average % of Total House Sales Using the Help to Buy ISA |
|---|---|---|
Bolsover | 25.10% | 2.62% |
Wigan | 24.43% | 2.94% |
Barking and Dagenham | 22.44% | 2.43% |
Halton | 21.83% | 2.66% |
Barnsley | 21.36% | 2.80% |
Kingston upon Hull | 21.22% | 3.54% |
This is between 1 in 5 and 1 in 4 home purchases during this quarter involving the grant scheme, compared to between 2.43% and 3.54% average across the full data.
This increase likely stemmed from various factors:
- The COVID-19 pandemic delayed many property completions, which were eventually finalised in late 2021. Help to Buy ISA account holders likely made up a large number of these completions, which could explain the temporary spike.
- Media coverage of the scheme generated some confusion on which year the bonus would expire. Some thought that it would expire on 1st December 2021, which may have resulted in a panic to use bonuses before this date.
- Increasing house prices and the threat of interest rate spikes in late 2021 may have provoked first-time buyers to lock in their mortgage rates sooner.
Has the November 2019 Cut Off Increased or Decreased Usage of the Help to Buy ISA?
We also thought it prudent to analyse the effect of the scheme’s ending on how much it was used. We expected all percentages of houses bought using the ISA to decrease post November 2019.
However, fascinatingly, this was not the case in some Local Authorities. Therefore, we have created a top 10 and bottom 10 list of areas where ISA use increased and decreased after November 2019.
Top 10 Locations Where Help to Buy ISA Usage Increased After the Scheme Ended in November 2019
By comparing the average percentage of total house sales completed using the Help to Buy ISA before and after the scheme ended, researchers could dictate in which locations this percentage has increased after the cut-off.
The top 10 areas where this unusual occurrence was seen were:
Position | Local Authority | Average % of Total House Sales Using the Help to Buy ISA Before the Scheme Ended | Average % of Total House Sales Using the Help to Buy ISA After the Scheme Ended | % Difference |
|---|---|---|---|---|
1 | Bolsover | 2.26% | 2.98% | 0.72% |
2 | Maidstone | 0.45% | 1.04% | 0.60% |
3 | Wigan | 2.69% | 3.24% | 0.55% |
4 | Halton | 2.43% | 2.94% | 0.51% |
5 | Barking and Dagenham | 2.23% | 2.70% | 0.46% |
6 | Barnsley | 2.63% | 3.02% | 0.38% |
7 | Doncaster | 2.27% | 2.56% | 0.30% |
8 | Liverpool | 2.44% | 2.71% | 0.27% |
9 | Hyndburn | 2.42% | 2.60% | 0.17% |
10 | Calderdale | 2.25% | 2.41% | 0.16% |
For these Local Authorities, the use of the Help to Buy ISA increased even after the scheme ended. This is an interesting and somewhat counterintuitive trend, as we would typically expect to see a decline in usage after the scheme ended.
Multiple factors could have contributed to this unlikely trend, such as:
- A rush following the scheme’s ending to complete house purchases before the bonus was lost;
- Continued demand for affordable ways to buy a house in less economically stable areas;
- Promotional efforts by local governments, urging people to complete purchases with funds from their Help to Buy ISAs;
- Or, long timeframes for completing house purchases as a result of local housing market conditions, property availability, or buyer delays.
Help to Buy ISA Usage in the North
Many of the Local Authorities in the table above are in the North of England, which points to a regional pattern of increases in the Help to Buy ISA usage after the scheme ended.
Bolsover, Wigan and Halton (in the North West and Yorkshire regions) appear to see a large impact of the Help to Buy ISA. The increase in these areas could be linked to local government support for first-time buyers, or perhaps stable property values, making the scheme more attractive and fitting the grant limitations.
Furthermore, the North of England has historically faced more economic challenges than the South, which could mean that the Help to Buy ISA might have been a more critical tool for first-time buyers, thus contributing to a larger increase in usage post-scheme.
Help to Buy ISA Usage in the South
Comparatively, Maidstone and Barking and Dagenham are the only two Local Authorities in the South East and London regions in this list. After the scheme ended, Maidstone saw an increase in Help to Buy ISA usage of 0.60%, whilst Barking and Dagenham had a slightly smaller increase of 0.46%.
In areas such as these, first-time buyers might have been particularly dependent on any available government assistance to afford a home due to house prices. The end of the scheme did not necessarily reduce the need for help, and these areas might have seen a greater increase in the scheme's usage due to continued affordability pressures.
It may have also been down to house prices here still meeting the grant limitation of £250,000, unlike much of the South.
Urban vs Rural Help to Buy ISA Usage
The difference between urban and rural areas may also have had an effect on the use of the ISA.
Bolsover, Wigan, Halton, and Barnsley, could be described as either suburban or rural. These areas tend to show a more significant increase in Help to Buy ISA usage, which indicates that they seem to benefit more from the scheme, perhaps due to housing affordability and demand for first-time buyer assistance.
Comparatively, Barking and Dagenham and Liverpool both show moderate increases in Help to Buy ISA usage, indicating that urban areas may still see adoption, but likely at a smaller scale.
Locations Where Help to Buy ISA Usage Decreased After the Scheme Ended in November 2019
Comparatively, 232 of 265 Local Authorities had their Help to Buy usage averages decrease after the November 2019 cut-off; a more common and expected occurrence.
The decrease in the percentage of house sales completed using the Help to Buy ISA in these Local Authorities can likely be attributed to:
- A move towards alternative government schemes such as the Help to Buy Equity Loan;
- Housing market conditions, such as rising property prices which could have made the scheme less applicable;
- And a natural slowdown in the use of the Help to Buy ISA as the scheme ended.
It is important to note that many buyers who had already opened a Help to Buy ISA account before the scheme ended may have completed their purchases before November 2019.
The two Local Authorities in the South East of England where the use of the Help to Buy ISA decreased the most were Kent and Gravesham. These are affluent areas, close to London, and as such, they have high property prices, so price limits make these areas less applicable. Similar issues with high property prices would have made the Help to Buy ISA less popular in the London borough of Waltham Forest, as well as York, which holds great historical value.
The City of Bristol, South Gloucester, Exeter, and Cheltenham, all in the South West region, also saw fewer houses bought using the Help to Buy ISA post-scheme. The South West is home to competitive housing markets, in which buyers may have opted for the Help to Buy Equity Loan from 2020 instead of the Help to Buy ISA. Moreover, South Gloucester saw an increase in housing supply, which perhaps made use of the Help to Buy ISA less necessary.
The most common reason for the decrease in usage, however, is most likely house prices increasing drastically in all locations, exceeding the £250,000 limit.
Buying a Home in 2024?
If you’re looking to buy a home using your Help to Buy ISA account in 2024, we’re on standby to help you with all your conveyancing needs. Just give us a call at 01476 372042 or start a quote, as you won’t be able to claim your government bonus without the input of a licensed conveyancing solicitor.
For those who may have missed the Help to Buy ISA deadline, and are interested in any other home buyer incentives the government has to offer, head here for more information.
Methodology and Data Sources
The data for this study was sourced via Official Statistics on the Help to Buy: ISA scheme on GOV.uk and the Residential property sales for administrative geographies on the ONS.
By comparing the property sales using the Help to Buy ISA against the total number of residential property sales every quarter, a percentage was found per quarter from 2016 to 2024.
From there, we worked out averages for each location, and could ascertain the top and bottom 10 locations. We also worked out averages for each location both before and after the Help to Buy ISA deadline of November 2019.
Q1 and Q2 of 2016 were discounted due to incomplete data. We also discounted any Local Authorities with incomplete data, likely down to changes in government jurisdiction, as those figures may be skewed.
Please note, all interpretations of the data are that of the Bird & Co researchers.
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