LISA0151

Written evidence submitted by Anonymous

We are a couple, both 29 years old. We both opened a Help To Buy ISA about 10 years ago, and then converted this to the LISA when it launched in 2017. We have been renting together in London and the surrounding areas since 2019, waiting until we could afford to buy a property, and for the most optimal time.

Since we have had the LISA, the cap on the property of £450,000 has not been adjusted. We both have demanding jobs in London, which require us to both be in the office 4-5 times a week. When we buy our first property, we have no choice but to buy in London. As house/flat prices continue to rise year after year, it is becoming extremely difficult to find a suitable home to purchase for the price of £450,000 or under. It is essentially impossible for us to purchase a house for £450,000 or under in London, and will have to settle for a flat (a 1 or 2 bed at the most).

It is disappointing that the unusually high property prices in London have not been taken into consideration in respect of the cap. In many other areas of the country, the cap of £450,000 will cause no issues, and a 2-3 (or even 4) bed house can be purchased whilst staying within the cap. However, in London, this is not at all possible.

The cap should, at the very least, be raised in line with inflation for those living in London or the surrounding areas. If there has to be a cap on the property price in place, it should not be lower than £600,000-£650,000 for those in London, to allow couples like us to purchase a house (rather than a small flat).

For other couples in similar situations to us, they may be forced to withdraw the funds and incur the penalty fee if they need to buy a house (for example, if they are expecting a child/more children, and a 1 or 2 bed flat would be too small for the family). In these situations, there should be no penalty fee for withdrawing the money, and you should be able to keep the account interest that you have accrued.

February 2025