First-timers oblivious to home saver plan

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Many Australians haven't even heard of a Federal Government scheme that's supposed to help first time buyers into the housing market, let alone joined it, a survey has found.

An online poll by mortgage broker Loan Market found 46 per cent of respondents weren't aware of the $1.2 billion First Home Saver Accounts (FHSA) scheme that was launched two years ago to help young people save for a home deposit.

The scheme was set up to assist more than 700,000 people within the first four year years of its launch in October 2008, but fewer than 20,000 accounts have been opened, according to Loan Market chief operating officer Dean Rushton.

"Clearly this scheme has not been as successful as hoped," Mr Rushton said.

"Despite the 2010 budget announcement by the Federal Government of draft laws to boost the flexibility of the scheme, it clear from our survey results that prospective home-buyers are unaware of the FHSA or still find it too complicated."

Latest Australian Bureau of Statistics data showed that just 15.5 per cent of new home loans that were committed in August were for first home buyers, the smallest proportion since July 2004.

Under the FHSA, the Government contributes 17 per cent on the first $5500 of individual contributions made each year.

Savings are required to be kept in the scheme for four years.

The survey found that of the 400 respondents, 29 per cent thought the four-year time-frame was too long, 18 per cent said the scheme lacked flexibility and 7 per cent said it was too complicated.

"It's time to admit that the First Home Saver Account has failed and needs some significant panel beating," Mr Rushton said.

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