House buying next year

Martiallaw

I can’t seem to find a helpful suggestion to this.
My parents have recently sold their old property and have given me some money towards my first home.
I have always rented and am now looking to buy next year.
I have a help to buy ISA which is currently dormant/inactive and needs to be reopened before putting money into it. It currently holds £1.
The money that has been given is currently sitting in a savings account.
If I am looking to buy next year the most I can put into my ISA is £200/mo. (£2400/ye)
Is it worth putting some of the money into the ISA? Opening a LISA instead or just keeping the money in the savings account?

Any help would be greatly appreciated

Ramouth

I’m not 100% on this as I have a LISA to save a little extra for retirement rather than for a house and am not sure if the rules are different, but I believe the limit is £4000 a year and you can pay in as a lump sum so would think that would be a better option

C_N_

Opening a LISA seems the obvious choice, although it does have to be open for a year before you can open it, so as long as you weren't buying before July 2022 you will be fine there.

By that point you could have £8k in there plus £2k bonus, 4k deposit this tax year, another 4k next tax year) rather than £2400 plus £600 in H2B. And you have a high purchasing limit too of £450k outside London, as long as you were buying with a mortgage.

Martiallaw

I would be looking to purchase in June or earlier next year. So not sure if LISA is the best option then.

grumiofoundation

Martiallaw said:

I would be looking to purchase in June or earlier next year. So not sure if LISA is the best option then.

Purchase in June or make an offer in June? 

If the latter then you wont be completing before July so 12 month limit won't be an issue.

Either way might a well open a LISA with £1 today, and even if you don't want to commit £4000 this tax year you then have the option to pay in next tax year and get £1000 bonus if it becomes clear you won't buy before July.

You might as well start paying into HTB ISA *(can make penalty free withdrawals anyway from this so no downside). You can pay into help to buy ISA and lifetime ISA at the same time.

*assuming you haven't contributed to another cash ISA in this tax year.

Martiallaw

This feels to make the most sense, my tenancy is up in June so ideally would be around April-June time to buy.
I’ll reopen the HTB ISA and start paying into it, thank you