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To: Jeremy Hunt
Increase the lifetime ISA first home cap in line with rising house prices
Increase the lifetime ISA first home cap in line with rising house prices.
Why is this important?
The Lifetime ISA is turning into a financial trap for young people. Currently the savings and bonus can only be used to buy a property up to the value of £450,000. However the average house price for first time buyers in London and the South East is at least £500,000.
This property value cap even applies to buying a small proportion of a property on a shared ownership scheme. This means that to buy a home the government will charge you a penalty fee of 25% to withdraw your money as your house does not qualify for the deal.
(In real terms, this works out at way above the 25% bonus that is paid and eats into your original savings. Which is a situation I now face. I am set to lose money on the very little I have managed to pull together.)
In the midst of a cost of living and housing crisis this is completely unacceptable.
The treasury is currently profiting from people struggling to save and get a foot on the property ladder with an ill-designed financial product.
This limit should be reviewed immediately to ensure that people can use the bonus towards their first homes. Or the treasury should consider waiving the penalty for anyone in the London area who wants to buy a first home.
Going forward the threshold should be regularly reviewed in line with increases in the housing market.
This is the absolute minimum that the government should consider reviewing to support people to get on the housing ladder. It means that even schemes like shared ownership are inaccessible for people like me in the south of England.
We are in the midst of a cost of living and housing crisis.
The treasury is currently profiting from people struggling to save and get a foot on the property ladder with an ill-designed financial product.
The government is unwilling to provide adequate social and affordable housing, or consider rent caps.
If private ownership is the only way we the majority of the population is able to access housing reviewing this product is the absolute minimum that the government should consider.
Even schemes like shared ownership are inaccessible for people like me in the south of England. The Lifetime ISA is meant to help young people get somewhere.
But instead I’m now financially trapped.
