A raft of banks and building societies have signed up to offer the new Help to Buy Isa from 1st December, the Chancellor has announced.
Barclays, Lloyds Banking Group, Nationwide, NatWest, Santander and Virgin Money have confirmed their participation in the scheme, which aims to make it easier for first-time buyers to save for a deposit on a home.
Starting on 1st December, first-time buyers will be able to save up to £200 a month in a dedicated Isa that the Government will top up by 25%, up to a maximum of #3,000.
People can also open their account with a one-off lump sum of up to £1,000 in addition to the monthly maximum. Couples will be eligible if they are buying together, meaning a potential boost of up to £6,000 towards a deposit for a first home.
Chancellor George Osborne said:
Recent figures from the Office for National Statistics (ONS) show that a typical first-time buyer faces paying 5.1% more for a property than they did a year ago. The average price paid for a starter home in May was £211,000.
And data from the Council of Mortgage Lenders (CML) shows that the typical first-time buyer needed a deposit of 18.6% in May.
The Government said the scheme has the potential to help every first-time buyer across the country, of which there are half a million a year.
However, only first-time buyers who are buying an owner-occupied home worth up to £250,000, or £450,000 in London will be eligible.
The scheme can be used in conjunction with any of the other ways the Government is helping people achieve their home-owning aspirations, including the other elements of Help to Buy and shared ownership schemes.
The Isas can be opened any time up to four years after the scheme launch, and people can save for as long as they want.
Steven Cooper, CEO, personal banking, at Barclays, said:
"We look forward to launching our Help to Buy Isa later this year, helping future home-owners to achieve their ambitions."
Stephen Noakes, managing director, retail customer products, at Lloyds Banking Group said the new Help to Buy Isa provides "a genuine solution to the challenge of raising a deposit".