Only 5% deposit at Nationwide

Any addition to the options for first time buyers has to be welcomed at the moment.

Nationwide has added its Save to Buy scheme, allowing first timers to obtain a 95% mortgage or, putting it the other way round, put down a deposit of just 5%.

It adds to offers from Lloyds, Barratts and Taylor Wimpey and a deal from councils.

The rules are that prospective buyers have to open a special savings account with Nationwide and deposit £50 a month for at least 6 months.

Then they qualify for a 3 year fixed rate mortgage at 6.29%, for a discounted fee of £400. Or a five year fix at 6.89%.

If I were to niggle I would say it is a shame that the savings account can't be a tax-free ISA. Nationwide says it wanted a simple account for all.

Plus, it points out that savers qualify for a bonus of up to £1,000 to help with the mortgage, if they do eventually apply for one.

How much difference will it make?

Well, Nationwide lent to 17,000 first time buyers in the 11 months to February this year, slightly more than its overall market share warranted.

But the total number of new buyers last year was 197,400, so an increase the Nationwide figure is unlikely to transform the situation.


According to the Council of Mortgage Lenders, the highest number of purchases by first-time buyers recently came in 2001, when the total was 568,200.


Hence, some would argue that you need to bring hundreds of thousands of first time buyers into the market to get things moving healthily again.


None of the schemes on the table will do that, together or separately.