LISA0162

Written evidence submitted by Anonymous

I am a parent of 3 children who are now young adults and have recently or are about to enter the workplace place and none of them have any inheritance nor significant savings to be able to place a deposit on a house.

Our family home is in Surrey which is generally considered a commuter location with a significant chance at all my children will want to work and live in London and will therefore want to buy a flat within the Greater London area.

I have encouraged them all to set up lifetime ISA, and two of them regularly make contributions in the hope of building up a sufficient deposit to purchase a home. I am sensing an increasing resistance to do this because my children see the house price cap as being overly restrictive and if they can't buy the property they want and instead withdraw cash from the ISA they will be financially penalised so will be stuck.  They are now thinking of not paying in at all which would be a real shame and miss out on the government contribution.

To put this dilemma in perspective the average cost of a 2-bed flat in Hackney is £551,787,  in Streatham it is £464,000 and Putney is £472,000. In all these locations the cost of the flat exceeds the Lisa allowance. I have picked these locations as they are the sort of places where my children might reasonably expect to live but the Lisa cap will prevent them from doing so. If you compare this to say Manchester the average price of a 2-bed flat is  £225,000.  In summary it is clear that the Lisa cap is unfair on young people living in London as it fails to consider the regional difference in house prices.

In my view the cap is unnecessary and should be removed. We are talking about young people who have saved small amounts over several years so why do we need a cap at all?  As an alternative  the cap could be raised in line with inflation since it was introduced,  or a London weighting introduced.

The Lisa is a good idea but failure to lift the  cap has made it not fit for the intended purchase for those young people who are facing London prices.

In my view this country needs to put the interests of our young people first. This should also include increasing the 0% stamp duty for first time buyers to say the Lisa cap.

February 2025