First time buyer - HTB ISA x LISA issue

TheButcher6

Hi all, 

I'm hopeful that you can help me with some first time buyer advice...

I set up a HTB ISA which currently has £10,500 in & I'm looking to buy my first home. 

This is where the issue arises, the cap is set @ £250k for the cost of the house, this is untenable for location I wish to buy in, would likely be between (£300k-£375k).

Are there any work arounds here? I have looked into the LISA which would be a good time of year to be able to make 2 x £4k payments, but I've read you'd need to keep it in for at least 12 months otherwise face a 25% charge. I will be ideally looking to complete on a house in the next 3-6 months. 

Thanks in advance for any advice you can provide here.

PRAISETHESUN

https://www.moneysavingexpert.com/savings/lifetime-isas/

Best time to open a LISA is now and stick £1 into it while you decide what you want to do. Only the account needs to have been open for 12 months, the actual money doesn't need to stay in the account for the full 12 months. You are limited to £4k each financial year though, so you need to decide if you want to commit by April.

For LISAs, there is always a 25% penalty if you withdraw money for any purpose other than a first time property purchase or retirement. There are no workarounds - either you are eligible to use it, or you are not eligible and then you either wait until retirement or pay the penalty to withdraw.

If you are planning a purchase in the next 6 months then a LISA is not a good choice. It's a net loss of 6.25% of what you put in otherwise.


For H2B ISA there's no penalty for withdrawing, but you also won't be eligible for the government bonus if the property price is too high. The balance of the ISA will be what is available for you to use towards your purchase.

TheButcher6

Thought this was the case, thanks for your help!