Nye: Government schemes need simplification

Paul Nye

Government-supported saving schemes such as the Lifetime Isa are welcome, but the range is in dire need of simplification

For first-time buyers and their advisers, the world of mortgages and home-ownership has got a bit more complicated this month with the launch of the Lifetime Isa.

Mortgage Strategy recently ran a piece on how the initiative could struggle to get off the ground given the lack of cash Lifetime Isas currently available. Considering first-timers are meant to be the major beneficiaries of the product, and most in this 18- to 39-year-old demographic will want to have their savings in cash, the opportunity is not as strong as one might have hoped.

On the face of it, the Lifetime Isa seems like a no-brainer for savers. But with no cash option, plus a market already rather complicated by other options such as the Help to Buy Isa, first-time buyers could be forgiven for feeling uncertain about where to save for their deposit.

Government support with saving incentive schemes like this is clearly a positive step, but some much-needed simplicity could be injected into what is currently available.

For example, different schemes have different maximum property values, along with different bonus options. There could also be conversations around how they can or cannot be used, as well as regarding other options such as Help to Buy 1, shared ownership, the Bank of Mum and Dad, guarantor loans, social housing and so on.

It may seem positive to have so many options but do we want to frazzle the minds of those at the start of their homeowning journey?

We are some way from November’s Budget statement – and the Lifetime Isa needs time to bed in – but surely there is considerable scope to look at everything on offer and create a much simpler structure.

Paul Nye is director, business partnerships, at Stonebridge Group