Ahead of the Budget, Nationwide Building Society has called on the Government to extend and enhance Help to Buy ISA.
Help to Buy ISA is designed to help first-time buyers who open an account before 30 November 2019 to get a foot on the housing ladder. Since launch at the end of 2015, more than a million savers have been supported in building a deposit for a home by taking out a Help to Buy ISA, claiming an average of £700 in Government contributions.
Nationwide has said that the support offered to first-time buyers through Help to Buy ISA is 'vital', particularly during a period of high inflation and rising house prices, where any assistance for those saving for a deposit is a major boon.
The Society would also like to see the Chancellor increase the maximum monthly deposit on Help to Buy ISA, currently set at £200 per month, and to give savers outside of London the opportunity to use the scheme to buy property with a higher value than the current limit of £250,000.
Nationwide believes there remains an important role for Help to Buy ISA, even alongside the recent launch of Lifetime ISA. While Lifetime ISA offers the opportunity to earn a larger bonus over a number of years, it also features penalties for early withdrawals and therefore doesn’t take into account the varying needs of all savers. Research previously conducted by Nationwide shows that more than half (57%) of savers are put off saving when an account features a withdrawal penalty.
Chris Rhodes, Nationwide’s Executive Director for Products and Propositions, said: “As one of the most important issues of today, home ownership continues to be a major focus for the Government and one which we wholeheartedly support. But as a major savings provider, we need to be assured that any products we offer are simple to understand and will benefit a sizable proportion of our membership base.
We believe the existing Help to Buy scheme is the most effective option for first-time buyers due to its benefits, simplicity and proven success. It should be extended and enhanced, building on a product which is not only fit for purpose but also helping move the dial on getting people onto the housing ladder during a difficult time for savers”.