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New Help to Buy ISA
I was listening to the Martin Lewis podcast and I might have misheard, but he seemed to say at one point that the new help to buy ISA which will replace the LISA, will only be avaialble as a cash savings product, and not as an investment wrapper/S&S ISA. Is that right or did I misunderstand that comment?
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The new product was announced as replacing the LISA specifically for first-time buyers, rather than those using it for retirement, and the former are more likely to be saving cash rather than investing, but there is a consultation process planned - I'm not aware of it actually having started yet though.
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Interesting unofficial reports today claiming the new "First Time Buyer ISA" may be launched in April 2028, contrary to "early 2026" which is what I perceived from the budget… this would mean 2 more years of contributions and bonuses before any potential halt… I guess there's a lot to consider with this one, hence buying more time to try and get it right, although I reiterate it's not from official sources…
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The budget statement was that 'early 2026' would be when the consultation about the new product would start, not its launch - there wasn't any date given for that.
Lifetime ISA Reform
The government will publish a consultation in early 2026 on the implementation of a new, simpler ISA product to support first time buyers to buy a home. Once available, this new product will be offered in place of the Lifetime ISA.
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It does irritate me when they keep using the term 'first time buyer'
Many people buying their first home don't qualify under the lifetime ISA/HTB isa/stamp duty rules e.g. they inherited a one fifth share of their aunt's country cottage in Romania which was sold by the estate and they got the proceeds worth £1,000. A home they could never live in due to location or there being multiple beneficiaries.
Should say first time owner - as people who inherited a share of a home even if they never even saw or lived in it which was sold by the estate so they only got cash are ineligible. But if someone inherited £1m in cash from an estate directly - they can still use the first time buyer schemes as they aren't means tested. It is just a nonsense!
The Irish equivalent scheme includes all first time purchasers - irrespective of whether they inherited a share of a property before. So it is for all first time buyers.
If the idea is you want to encourage young people to buy their own home they can live in - then why don't we have the same approach - and in future include all first time BUYERS!!
https://www.revenue.ie/en/property/help-to-buy-incentive/who-can-claim-htb.aspx
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This viewpoint should go into the consultation…
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Many people buying their first home don't qualify under the lifetime ISA/HTB isa/stamp duty rules e.g. they inherited a one fifth share of their aunt's country cottage in Romania which was sold by the estate and they got the proceeds worth £1,000. A home they could never live in due to location or there being multiple beneficiaries.
If sold by the estate then they might not have lost FTB status for the purposes of the government schemes anyway.
Do you have any stats that would quantify how much of an issue this really is?
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Personally I feel there is a point that it should at least be renamed to "first time owner" since inheriting of a property can and does happen unexpectedly and possibly disrupt future plans to "first time buy" a property of one's own choice, especially considering recent inflation and increased interest rates delaying affordability…
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As you say, it's potentially a valid point for discussion in a consultation, but personally I have no issue with taxpayer-funded schemes effectively excluding those who benefitted from inheritance lump sums! Obviously in the extreme, a very small inheritance that jeopardises a substantial HTB/LISA bonus could be argued to be unfair, but these schemes can never be entirely equitable to everyone.
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Even though inheritance should be considered a fortunate situation, it is after all subject to its own taxation rules and thresholds, so to have it interfere with one's own property acquiring (and living) plans isn't exactly a fair trade-off in my opinion.
To be honest I hadn't considered or researched this before, so I'm wondering if there is a way to have an inherited property (however large the stake / value) be liquidated without interfering with first time ownership status?
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My understanding is that the scenario mentioned, where the property is sold by the estate and proceeds distributed to multiple beneficiaries, doesn't compromise FTB status as defined by the government, but the devil will be in the detail. There may be other mechanisms, such as deeds of variation, but there's always potential for the juice not be worth the squeezing if having to spend money on such measures.
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