Lifetime ISAs and house purchases

I am a big fan of lifetime ISAs. If you are thinking of the best way to save, I wholly recommend them, as they offer free money for first-time buyers in the form of a 25% bonus on the funds you have saved, This “Free Money For First Time Buyers” does come with a few restrictions, but nothing to worry most. The main criteria are the value of the property you are to purchase has to be less than £450,000, and there is a limit of £4,000 that you can save into the account each tax year. If you have savings in a basic e-savings account with the end goal of a house purchase, I recommend moving the savings into a LISA as soon as possible. For example, £4,000 savings moved across to your LISA will mean that £4,000 turns into £5,000 with the government bonus. You could do this once every tax year, too. A solicitor deals with the withdrawal of the funds, and I have never found this a problem with slowing down the house purchase process. I think Lifetime ISAs will become more popular if there is more awareness and media coverage. I often speak to clients who did not even know this existed. Client case study: My clients were just short of their required loan for the property they wished to buy. I reviewed my clients’ circumstances and I noted that both clients had Lifetime Isas, which neither had used to save their deposit money in but had opened over a year ago. I suggested that if both clients transferred the maximum permitted amount of £4,000 each from their savings account into each of their Lifetime Isa’s, they would be eligible to each receive a £1,000 bonus from the Government, which was paid in the following month. This then boosted their deposit by a further £2,000 and meant they had enough to continue with their mortgage application for their dream home. Lifetime ISAs, and a good broker, saved the day.

We had a first time buyer client pay for their mortgage deposit with their LISA savings, just last month. The LISA is good deal, particularly as each applicant can open their own, effectively doubling the government bonus. Yet, they don't seem to get much attention in the press for some reason.