Responsible for opening one in seven Help to Buy ISA accounts, Nationwide says that the government should maintain and further the program for its proven success, simplicity and effectiveness.
The Help to Buy ISA (HTBISA) is the government’s flagship scheme helping first-time buyers to get a foothold on the property ladder.
Since the scheme’s launch in 2015, over a million people have received support from the government for a deposit on their first home, averaging £700 in contributions.
“The support offered to first-time buyers through the HTBISA 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,” said Nationwide.
The statement is given despite the recent launch of the Lifetime ISA, which offers the opportunity to earn a larger bonus than the Help to Buy ISA over the long term.
The lifetime ISA allows savers to put in up to £4,000 each year, until the age of 50. The government will add a 25% bonus to the savings, up to a maximum of £1,000 per year.
The Lifetime ISA limit of £4,000 counts towards an individual’s annual ISA limit, which is £20,000 for the 2017 to 2018 tax year.
However, Nationwide says that the HTBISA remains essential because the Lifetime ISA carries penalties for early withdrawals — neglecting the diverse needs of savers and offsetting the advantages of the potentially larger bonuses.
In addition to maintaining the program, Nationwide says they’d like to see the monthly deposit on Help to Buy ISAs increase from the current £200 per month — in order to give savers outside of London the chance to buy property worth over the current limit of £250,000.
Chris Rhodes, executive director for products and propositions at Nationwide, said: “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”.