LISA0060

Written evidence submitted by Anonymous

The LISA as introduced was an excellent product particular to assist young people to save and get on the property ladder.  Given the current housing crisis measures to assist young people who are prepared to help themselves must be laudable and provide value for money for the Government.  The current government has set ambitious housing targets but these will only be achieved if there are sufficient buyers wo can afford to purchase these properties. If not developers will just not build. Whilst it can be argued that a more plentiful supply of housing will improve affordability it is unlikely to be sufficient on its own to transform the market for first time buyers.

The requirement to use the savings for either property purchase or a pension seems a reasonable condition in return for a tax saving.  As such I have encouraged all my grandchildren to invest in LISA’s once they have commenced employment.  However a major problem has now arisen.  The max purchase price of £450K was sensible at the time of introduction in 2015, but is now woefully inadequate.  It is virtually impossible to purchase a property in London ( even a one bedroom flat ) for this amount.  If the savings cannot be used for a house purchase then the account has little value . My eldest granddaughter is currently looking to purchase in London but is in grave danger of having to take the penalty on her LISA as she can’t find a suitable property for £450K.

I accept that this is only one example, but an excellent product has been rendered not fit for purpose simply because the max property price has not kept pace with house price inflation.  The max price should be increased by inflation since 2015 and thereafter increase automatically with inflation.  Do this and you have an excellent product which the Government can relaunch and promote as a real benefit to young people.

January 2025