Savings account designed to help first-time buyers

A major new savings account - designed to help first-time buyers gain a foothold on the East Midlands property ladder – has been launched by The Nottingham.

The First Home Saver account specifically caters for the needs of people who are eager to own a home for the first time - but don't yet have a deposit.

It is one of the few savings accounts of its type to be launched in the UK by a building society or high street bank.

"We have been exploring ways we can help first-time buyers for some time now," commented The Nottingham's Clare Roberts. "The First Home Saver account is our way of helping those people in the East Midlands who want to own a home for the very first time.

"Not only are we offering a competitive interest rate, but we're also giving would-be buyers an account that is tuned into their needs as they begin the process of saving enough money to secure a home of their own."

First Home Saver rewards first-time buyers with an attractive rate of interest, paying up to 3.5% to anyone with £5,000 or more invested in their account. It can be opened in single or joint names with a minimum deposit of £10.

First Home Saver also offers a £250 cash-back incentive to any buyer who takes out a mortgage through The Nottingham. This includes its first-time buyer mortgage, which offers advances of up to 95% of the value of a property.

This means anyone willing to save £200 per month, or £50 per week, for three years will have built up a fund £7,591 that can be used as a deposit to buy their new home.

The new savings account is being launched against a backdrop of a deteriorating economic climate for many people - with credit and finance becoming difficult to source. An example of this is the size of deposit now required by most lenders from first-time buyers, for according to the Office for National Statistics (ONS) it is now the norm for first-time buyers in the East Midlands to be asked put down a 15% deposit when they buy a home which, on average, costs £90,000.

This means the average first time buyer is now required to find more than £13,000 as a deposit. This is a tall order for many would-be homeowners in the region.

"Something radical has got to happen for the first-time buyer market to come back to life," added Clare Roberts. "And we are committed to playing a strong role in ensuring the needs of first-time buyers are catered for. That's why we are launching First Home Saver, and why we are one of a handful of lenders who have introduced a dedicated 95% mortgage for first-time buyers.

"By any standards, £13,000 is a lot of money to find - and, in the current climate, it will be very hard to get their hands on a deposit unless they are prepared to save.

"In recent years, Britons have lost the savings habit. We have relied on easy credit too much and a property market that, for many younger people, meant they couldn't afford to own their own home.

"Those times have now gone - and don't look as though they will return for a long time. And that's not a bad things as we now have an opportunity to return to good, old fashioned principles, like saving for those important things that we want most."

For more information, visit thenottingham.com