Financial expert Martin Lewis has issued an important alert to anyone considering purchasing homes valued at £450,000 amidst the ongoing Cost of Living crisis. A Lifetime ISA allows first-time buyers to save for a home, accruing extra money in the form of a Government bonus to put towards their new place. For every £4,000 savers put in, the state adds an extra £1,000 on top. However, the money can only be used for a first home – or retirement – and must be used on a house which costs less than £450,000.
Lewis has urged Brits to take action and participate in a policy research survey regarding the £450,000 property cap on the Lifetime ISA. The survey aims to gather insights from individuals who have or had a Lifetime ISA to support campaigning efforts on the issue. Responses are anonymous and won’t be shared individually, according to Birmingham Live. One individual expressed concern about potential financial implications if they were to buy property with a partner who already owned a flat. Lewis clarified that as long as the property purchased is under the threshold, the Lifetime ISA can still be utilised, either separately or together.
Another participant from London highlighted the challenge of finding affordable properties under the £450,000 cap, especially in the context of fluctuating interest rates and increasing prices. In some areas, like the one described by a third respondent where the house price cap was set at £250,000, the cap seems inadequate and fails to fulfil its intended purpose. Such disparities between regions like London and elsewhere have drawn attention to the limitations of the Lifetime ISA scheme.
As the property market continues to pose challenges for prospective homebuyers, Lewis’s call to action emphasises the need for individuals to engage with the existing policies and contribute their feedback to drive meaningful change. By sharing their experiences and perspectives through surveys like the one proposed, savers with a Lifetime ISA can play a role in shaping future initiatives aimed at making home ownership more accessible and affordable for all.