- ITV News video report by Ronke Phillips
The government's Help to Buy ISA scheme has been branded a "scandal" after it emerged that up to 500,000 first-time buyers cannot actually use it towards a deposit on a house.
At the launch of the scheme last year, former chancellor George Osborne said it would provide "direct" government support to people saving for a deposit on their first home.
Deposits, typically 10% of the total cost of a house, are worth tens of thousands of pounds and are usually considered the biggest obstacle to home ownership.
However, a flaw in the scheme means a 25% government "bonus" on savings will not be paid until the sale of a house is completed.
The bonus cannot be used for initial deposits and can only be spent as part of the purchase cost (such as mortgage payments) once the deal is finalised.
Experts said this means the scheme is essentially useless for people struggling to put together funds for the initial stages of buying a home.
The ISA accounts allow customers to save £200 a month, to which the government adds £50, up to a final total of £15,000.
So far, fewer than 1,500 people have used the scheme to buy a home due to the limit on how much can be paid.
Andrew Boast of SAM Conveyancing, told The Daily Telegraph: "It is a scandal. The government launched this scheme declaredly to help people save the large exchange deposit required to buy a home.
"But what unsuspecting first-time buyers are now horrified to discover is that under the scheme rules they cannot use the bonus as part of this deposit."
A Treasury spokesman said: "It has always been the case that money saved in a Help to Buy: ISA is for an exchange deposit, with the bonus of up to £3000 per ISA from the government going towards the total funds available for the property transaction.
"The government has published clear guidance and the industry is fully aware that the bonus is only paid on completion."