In the three months to March 2024, Help to Buy ISAs were used to buy 9,409 properties, down 14% from the previous quarter.
The Help to Buy ISA opened in December 2015 and closed to new entrants in November 2019.
It has helped with the purchase of 601,476 properties altogether, according to data released by HM Treasury.
The average value of a property bought through the Help to Buy ISA was found to be £178,012, compared to an average first-time buyer property price of £236,461 and an average property price of £283,000.
Sarah Coles, head of personal finance at Hargreaves Lansdown, said: “At this rate, we’ll be on track for the worst ever year for the Help to Buy ISA, down almost two thirds from the peak in 2021.
“It’s not helped by a relatively sluggish market at a time when mortgage rates were stubbornly high, but the real problem is that the scheme is slowly dying.
“It has been almost five years since the Help to Buy ISA closed to new entrants, and although bonuses can be claimed until 2030, far fewer people are now in the scheme.
“As ever with a closed market, the savings rates aren’t great, with the best available for transfers (not restricted to existing customers) offering just 2.75%.
“It’s not just the lack of availability and the rate that is scuppering the scheme. The limits aren’t fit for purpose either, after being set in stone in 2015. Outside London you can only buy a property worth up to £250,000 with a Help to Buy ISA, and the average first-time property is now alarmingly close to this level.
“There will come a time when even those who have hung onto their Help to Buy ISA are forced to ditch it at the last gasp, because they can’t use it for the property they need.”
Coles noted that the scheme’s savings limits remained unchanged in the nine years the ISA has been running, and after the first month are limited to £200 a month.
Meanwhile, the Government bonus is capped at £3,000, so if buyers who take full advantage – paying in £12,000 and getting a £3,000 bonus – can only build a deposit of £15,000, or just over 5% of the price of the average property.
