23.09.25

Stepping onto the property ladder: how a Lifetime ISA can help

For many first-time buyers, saving for a deposit feels like the biggest hurdle to getting onto the property ladder. One increasingly popular way to give your savings a boost is through a Lifetime ISA (LISA).

What is a LISA?

A LISA, also known as an Individual Savings Account (“ISA”) is a tax-free savings account designed to help people either purchase their first home or save towards retirement, accessible once you turn 60 years old.

How does a LISA work?

With a LISA, you can save up to £4,000 each tax year, and the government will add a 25% bonus on top of the amount you have saved. This means that if you save the full £4,000 across the tax year, you will receive an additional £1,000, bringing your total savings for that year to £5,000.

Key rules when using a LISA to buy your first home

However, there are some important considerations to be aware of when using a LISA to buy a property:

• You must be a first-time buyer* and have never owned a property before;
• The property you are buying should not cost more than £450,000;
• You must plan to live in the property that you are buying;
• You must have had a LISA open for at least 12 months;
• You must be 18-39 to open a LISA;
• The purchase must be made with a mortgage; and
• The property must be in the UK.

What about the Help to Buy ISA?

Some first-time buyers may still have a Help to Buy ISA, which closed to new applicants in 2019 but continues for existing savers. The government bonus works slightly differently here and is paid on completion rather than at exchange.

The most important takeaway is that a buyer can only claim one bonus, so if you hold both a Help to Buy ISA and a Lifetime ISA, you will need to decide which one to use.

Using a LISA can give first-time buyers a significant boost towards their deposit, but timing and eligibility need to be checked carefully to avoid unexpected withdrawal penalties. If you are considering buying your first home with one of these schemes, we recommend discussing the details with your solicitor at an early stage, so the process runs smoothly.

If you are looking for a conveyancer to handle your property sale or purchase, please contact our Residential Property team at property@wansbroughs.com or 01380 733367.

*If you are buying with another person, they do not have to be a first-time buyer