LISA0055

Written evidence submitted by Anonymous

I am a 33-year-old middle incomer earner working and living in East London. I have been saving for years to pull together a deposit. I’m now in a position where I’m hoping to buy in 2026 which is exciting. If possible, I would like to stay in the Bethnal Green / Hackney area where I have now lived for 7 years and call home.

My salary and deposit means that buying alone would give me a property price cap of around £300k. It is very difficult to buy anywhere in London for this price. So this means I am looking at either Shared Ownership or buying with a friend. However, if I were to do this my options are hugely limited by my LISA as most 2 bed properties in the area are over £450k. In fact, a lot of properties under shared ownership in London are also over £450k – the LISA limit is applied to the whole property, not just the proportion I’d be buying. This leaves me with either a very limited pool to choose from or to incur a 25% fine on my savings which I’ve worked hard to pull together.

I think there’s two easy ways around this and they are in response to question 6 and 8 in your call for evidence. Average house prices in London have gone up from £457K in January 2016 when LISAs were created to £518k in January 2024. This is over 13% difference and the cap should reflect this inflation or be removed (response to question 8). And it feels unfair that someone would incur a 25% fine for a property that would have been available to them within the gap 9 years ago if house prices hadn’t increased so rapidly, especially given that wage growth has not kept up (response to question 6).

Hopefully this evidence helps. Please can you let me know how this might be used going forward. I would also be happy to answer questions about my situation. I really hope some reforms can take place as it really will open out lots of options that for now feel rather limited.

January 2025