Success with Lifetime ISA

LattoC · 16 January 2019 at 3:14PM

I'm wondering if anyone has successfuly purchased a house and been able to use the bonus from their LISA? Is it a difficult process/a lot of paperwork to access the money? Are there any extra costs or fees (i.e does your solictor charge you for accessing the LISA?)
Thanks :j

Alexland · 16 January 2019 at 7:24PM

Yes we have heard from several forum members that have used their LISAs to purchase property.

Provided you are making a qualifying property purchase your solicitor will make a penalty free withdrawal from the account supported by a first time buyer declaration from yourself. The LISA needs to have been open 12 months from the initial deposit and the LISA providers seem to want around one month's notice.

With the HTB ISA the solicitor cost was capped but with the LISA it is uncapped so basically whatever you negotiate. We have head from one forum member who was charged above the HTB ISA cap for using a LISA.

When selecting a solicitor ask them to quote including the cost of drawing from the LISA(s) it should add around £50+vat to the cost of their work. At their rate card that's probably around 30 mins extra work.

Alex

pink_pirlie · 18 January 2019 at 1:39PM

I think we were one of the first to use the LISA last year, literally the day after the first bonuses were paid.

HL who the money sat with in cash, were brilliant. They allowed us to draw down the money really quickly (24 hours I think) in time for exchange and couldn't have been more helpful. But we did have to send quite a bit of paperwork over the previous week by next day delivery to get all the approvals in place in time. But it was no more stressful than the rest of the buying process.
Just start the paperwork 30+ days beforehand as that is what the regs say the providers have to pay you within.

Our solicitor didn't charge us any extra, but it was the first time she was doing it.

Good luck!!!

pinknsparkly · 19 January 2019 at 5:51PM

Yes, we bought a house just before Christmas using a Lifetime ISA. The key things to be aware of are the time delay in the bonus being added to the account (this may vary depending on who your LISA is with, the Skipton cash LISA pays the bonus up to 2.5 months after you put the money in the account) and the time to withdraw the money (again, my only experience is with Skipton, who state that they require 30 days notice to send the money to the your solicitors).

Our solicitors didn't charge a fee at all and a work colleague who is currently in the process of buying will be charged £30 per LISA (so £60 as they're buying as a couple with a LISA each). I suspect the only reason ours didn't charge was because they'd never done one before....

To access the money you have to fill in a form (Skipton have one on their website, I imagine other providers would do too), send it to your solicitor who fills in their information and sends it to your LISA provider. Then watch your emails like a hawk - we got sent an email that had to be responded to in order to confirm the withdrawal but as it didn't say anything about Skipton or Lifetime ISA in the title, it got lost in my husband's email account. As a result, we did have a delay with the money from Skipton arriving with our solicitors (their "instant money transfer" took 24 hours), so I would suggest you get your solicitors to ask for the money a few days in advance of your completion date....!

Good luck!!!

eskbanker · 19 January 2019 at 8:32PM

pinknsparkly wrote: »

The key things to be aware of are the time delay in the bonus being added to the account (this may vary depending on who your LISA is with, the Skipton cash LISA pays the bonus up to 2.5 months after you put the money in the account)....

Since the expiry of the first-year bonus arrangements at the end of the previous tax year last April, the use of monthly claim periods from 6th of one month to 5th of the next, plus 14 days for the LISA provider to claim and 14 days for HMRC to pay, would suggest that the absolute maximum time from contribution to bonus receipt should be slightly less than two months. Those who recognise this can easily schedule their contributions to keep the bonus payment delay down to a month....

Do you have an example of a contribution made under the current arrangement (i.e. since last April) where the bonus didn't arrive until 2.5 months later?

pink_pirlie · 19 January 2019 at 10:28PM

pinknsparkly wrote: »

As a result, we did have a delay with the money from Skipton arriving with our solicitors (their "instant money transfer" took 24 hours), so I would suggest you get your solicitors to ask for the money a few days in advance of your completion date....!

It is also worth taking into account that your solicitor may not be happy to exchange until in receipt of the money.
Ours wouldn't.
So you'd want to get it a few days in advance of exchange, not completion.
If anything goes wrong with the exchange they send it back to be used in future I believe.

cjv · 21 January 2019 at 2:41AM

I am in the process at the moment, I have kept tabs on everything to try and make sure things go smoothly.

One thing to note so far with Skipton which may be of use to others is that on the declaration form it asks for a "completion date".

My solicitor entered correctly our expected date expecting the funds to be sent within 30 days of the declaration, we heard nothing for a few weeks. I rang Skipton and found out they were planning to release the funds a few days before my completion date (around 4 months from the original request).

I explained that we in fact need the majority of the funds for exchange of contracts. They were very helpful, sent me an email the next day which I was able to sign online which released the funds and they arrived with my solicitor within a few days.

Success with Lifetime ISA

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