Using Help to Buy funds

hazontheraz

I have read an article today about the cap on house value for using Lifetime ISA's and it got me thinking whether it would apply to my Help to Buy ISA. I may have been a bit naïve when initially setting up my Help to Buy ISA as I didn't realise that the limit on the property value was £250,000 for non-London property. Obviously as house prices are going up, the cap of £250,000 is becoming more difficult to make the most of my ISA with the average house price in the UK at around £290K. I am not currently in the process of buying a property but I was interested to see what the answer would be to the following: 

Is there any way around the £250,000 cap? 

Could I potentially purchase a property worth, say £275K, with an agreement with the seller that I would officially buy the property for £250K and make a payment of £25k to them separately so that I could utilise my ISA? I imagine there may be fraud, tax and anti-money laundering at play but just wanted to make sure as I can't seem to get the answer from elsewhere!  

diggingdude

No. Sadly you missed your chance when the Lisa was brought in and you were allowed to switch. Either find somewhere within the price or accept you won't be able to use it 

BobT36

If only! I'm in the same boat where I contributed to the Help to Buy ISA for years and filled it. I wasn't naive about the prices but didn't expect them to go so stupidly high! 

I E-mailed Christopher Pincher MP back in Feb 2022 and didn't get a response, and public.enquiries@hmtreasury.gov.uk back in July that year. The latter responded to me but pretty much just kept re-iterating:

"Since the scheme launched in 2015, 480,494 property completions have been supported through the scheme with a mean property value of £175,849 compared to an average first-time buyer house price of £228,627"

Absolute BS, even in the north, any decent family homes are WELL over that, (especially nowadays!). They were ignoring that going by their "average" that includes data back in 2015, it's completely ignoring the CURRENT price of houses which have gone up a LOT since then. 

They also just kept shilling the LISA and mentioning the £4k year limit, and ignoring the fact that it requires branching THREE tax years to actually fill it and get the £12k from a H2B transferred over... It also then prevents that money being used in an emergency (unlike H2B) without penalties. 

That's time me and my lass don't have! We can't wait 2+ years just to start looking.
I really don't get why they can't just up the H2B cap to match the LISA, for those who still have them.