Nationwide calls for increased Government support for first-time buyers and savers

Ahead of the upcoming Autumn Statement Nationwide has urged the Government for increased support for first-time home buyers and savers. Amid escalating costs, achieving homeownership and building savings are becoming increasingly challenging.

Nationwide has outlined several measures essential for making a positive impact, particularly for first-time buyers.

These include an independent review of the first-time buyer market, focusing on critical issues such as the gap between income and house price growth, inadequate housing supply, need for planning reforms, and the effect of regulations on mortgage lending. This review is crucial for developing a sustainable homeownership support plan.

The building society also proposes the reintroduction of the Help to Buy ISA, suggesting an increase in the monthly saving limit from £200 to £500 and a corresponding rise in the redeemable bonus to align with house prices. Nationwide has previously opened over 542,000 Help to Buy ISAs, underlining the scheme’s success.

For savers, Nationwide calls for an increase in the Personal Savings Allowance (PSA), introduced in April 2016. With interest rates now significantly higher than at the PSA’s inception, more savers find themselves liable for tax on their savings interest. Nationwide data reveals that approximately 17% of its non-ISA account holders are already surpassing the PSA threshold. While ISAs remain a tax-efficient saving method, they have contribution limits.

Rachael Sinclair, Nationwide’s director of mortgages and financial wellbeing, said: “Homeownership is a huge challenge for many first-time buyers. Reintroducing the Help to Buy ISA would significantly aid in building a deposit.

“A thorough review of the first-time buyer market is necessary to identify and implement effective solutions. For savers, an adjustment to the Personal Savings Allowance is imperative to stay in line with current interest rates and encourage saving during these trying times.”