LISA0075

Written evidence submitted by Anonymous

I am writing to you as a concerned member of the public regarding the Lifetime ISA (LISA) and its growing challenges for individuals like myself, who are trying to buy their first home. While the LISA was introduced with good intentions, I believe it has now become a barrier for many, particularly in high-cost areas like London, where property prices have soared in recent years.

I have had a Lifetime ISA with Skipton Building Society since 2017 and have saved nearly £25,000 in the hope of using it as a deposit for my first home. However, the current eligibility rules state that the property must not exceed £450,000, a limit that is far below the average house price in London, which is £686,635 according to Rightmove. As a result, I am effectively unable to use my LISA savings for their intended purpose, putting my dream of homeownership out of reach.

If I were to withdraw my savings from the LISA now, not only would I lose the 25% government bonus, but I would also face significant penalties. In effect, the money I have diligently saved over the past eight years would be eroded, making the entire effort seem futile. Had I saved this money elsewhere, I would have been in a better financial position today. This feels particularly unfair after years of saving with the expectation that the scheme would help me achieve homeownership.

Last year, Chancellor Jeremy Hunt suggested that changes might be made to the Lifetime ISA to address issues like this, but to date, no meaningful adjustments have been made. I am encouraged by Martin Lewis's ongoing campaign and the inquiry into the scheme's impact, but I wanted to personally bring this matter to your attention. I know I am far from alone in this struggle—many of my friends are facing the same dilemma.

I am urging the government to increase the eligibility threshold for first-time home purchases under the LISA to better reflect the current housing market, particularly in London. This would allow people like me to avoid seeing eight years of hard-earned savings go to waste.

I would greatly appreciate your support in advocating for these changes, and I hope you will consider the impact this issue is having on young people trying to get on the property ladder.

January 2025