Lifetime ISAs guide

Alexland

The 90 days to completion starts from the point the LISA money is withdrawn and there is official guidance online.

https://www.gov.uk/guidance/conveyancers-first-time-residential-purchase-with-a-lifetime-isa#if-the-purchase-failed-or-isnt-completed-within-90-days

If the property purchase is continuing but isn’t expected to complete within 90 days of withdrawing funds from the Lifetime ISA you should ask the ISA manager for a 60 day extension, followed by a further 30 day extension if needed.

One way around this would be to fund the exchange deposit out of savings (if possible - maybe negotiating a smaller exchange deposit explaining your reason to the developer) and then only instructing your solicitor to withdraw from the LISA closer to the point of completion.

Alex

FTB_1992

Hi,

I am a FTB due to complete on my house purchase on Friday 14th December (wahoo!). I have a LISA with Skipton and my solicitor has sent the forms off to them to release the funds, Skipton have confirmed they received them on Thursday. When I rang up to speak to Skipton, they said they are working towards the completion date of 14th dec as we said on the form which means they will send the form for me to sign earlier that week with the aim to release the funds on the 14th. Is this something people have had happen before.. I presumed they would release the funds before the 14th so I'm getting nervous if they are delayed slightly.. we won't be able to complete on the 14th ? Why cant they just release the funds now so it's safe?

Thanks! Any advice would be great

eskbanker

FTB_1992 wrote: »

Hi,

I am a FTB due to complete on my house purchase on Friday 14th December (wahoo!). I have a LISA with Skipton and my solicitor has sent the forms off to them to release the funds, Skipton have confirmed they received them on Thursday. When I rang up to speak to Skipton, they said they are working towards the completion date of 14th dec as we said on the form which means they will send the form for me to sign earlier that week with the aim to release the funds on the 14th. Is this something people have had happen before.. I presumed they would release the funds before the 14th so I'm getting nervous if they are delayed slightly.. we won't be able to complete on the 14th ? Why cant they just release the funds now so it's safe?

Thanks! Any advice would be great

To be fair you have left it late, in that it's specified at https://www.skipton.co.uk/savings/isas/cash-lifetime-isa that:

Once we receive the appropriate paperwork from your conveyancer and you've confirmed the request to us, we’ll pay the amount requested to the conveyancer within 30 days

However, anecdotally from posts earlier in this thread, they've turned it round faster than 30 days previously, so, especially if they're aware of your completion date, chances are it should be OK, but check with your conveyancer if that timescale would cause any issues - the conveyancer should have known of the (up to) 30-day lead time though....

Alexland

It is also quite normal for solicitors to draw down the mortgage money on the day they need it.

Banks and Building Societies are generally resourced to ensure this all work nicely.

Appreciate its all a bit nerve wracking; it's worse when you are both buying and selling in the middle of a chain!

Alex

rosmic

I need advice on ISA's. I have £4,500 to invest.

Alexland

rosmic wrote: »

I need advice on ISA's. I have £4,500 to invest.

Lifetime ISAs are available from Skipton Building Society and others. They are a complicated product so I suggest you read the full terms to determine if they are suitable for your needs. As this is so similar to your other post I suggest we keep all further replies in your dedicated thread.

https://forums.moneysavingexpert.com/discussion/5934061

Alex

three1ne

Me and my partner both have LISAs and will both be FTB within 6 months. We both pay in roughly £2400 a year each into our individual accounts.

Couple of questions.
Skipton told me on a phone call that the solicitor requests the money for you when you've agreed to buy a house and from that the solicitor can take their fees out of the deposit (providing you have enough for 10% deposit).

Will the solicitor return any extra money to you or does this automatically get added onto the deposit.

My real question is. We already have the 10% required for a deposit so if I was in a position to could I max out the £4000 limit on both our LISAs and get that extra money returned to me via our solicitor once all fees have been paid?

eskbanker

three1ne wrote: »

Me and my partner both have LISAs and will both be FTB within 6 months. We both pay in roughly £2400 a year each into our individual accounts.

Couple of questions.
Skipton told me on a phone call that the solicitor requests the money for you when you've agreed to buy a house and from that the solicitor can take their fees out of the deposit (providing you have enough for 10% deposit).

Will the solicitor return any extra money to you or does this automatically get added onto the deposit.

My real question is. We already have the 10% required for a deposit so if I was in a position to could I max out the £4000 limit on both our LISAs and get that extra money returned to me via our solicitor once all fees have been paid?

The scheme rules are clear - the LISA money has to be used towards the purchase price of the property, not solicitor fees, stamp duty, etc, and certainly not returned to the purchaser in cash.

However, worth discussing with your solicitor to establish if they're prepared to bend the rules a little, as, anecdotally, some allow the money to go towards the overall bill payable to them at/after completion. Or ask the solicitor to renegotiate the payment schedule (e.g. a lower exchange deposit) so as to ensure that all of your LISA money is used while perhaps leaving some of your non-LISA savings available for other use.

nikosc

nikosc wrote: »

Hello,
I'm in the process of buying a new build (completion due in December) and my solicitor is unwilling to use my LISA as part of the exchange deposit. My LISA is with Skipton who require completion within 90 days of the solicitor requesting funds with the option to extend to 180 days.
This is what they have said on the matter:

I could take the money from the LISA, incur the penalty and top up with other savings but this would cost me over £3000 bonus. Is this right? I would've thought if it's significantly delayed they could just return the money to Skipton and reapply when there is a new estimated completion date.

Any advice is much appreciated. Thanks.

Following this up for anyone in the same position as me finding this through google (LISA to be used on new build property with no fixed completion date).

In the end we came up with two solutions:

1. The solicitor will claim the LISA from Skipton and held this on my behalf, proposing a smaller deposit to the developer (The agreed amount less the LISA total) and paid when notice of completion is served;
2. If this was not agreeable, the full LISA amount is claimed and used as part of the deposit, along with cash contribution totaling the agreed deposit. I will transfer the solicitor an additional 25% of the LISA total. The guidance on Skiptons website under "Using my LISA" (Sorry can't post links as a new user!) states: "If the purchase doesn’t proceed and the money is not returned (unless an extension has been agreed) the government withdrawal charge of 25% of the amount withdrawn will apply." If the purchase is completed within the time limits the 25% overpayment is returned to me, if it is delayed beyond Skipton's limit the money is returned to Skipton.

Luckily for me the developer was willing to accept a reduced deposit and everything was done on time.

[Deleted User]

Would you be able to change the ISA to a different type after a year or 2? For example, from a LISA to a cash/stocks and shares isa after a few years? And if so, would we still need to pay the penalty fee?