I am a big fan of the Lifetime ISA. A 25 per cent boost from the government - up to a maximum of £1,000 per year - plus the interest rate offered by the provider, is a huge help towards saving for a first home.
Over the long-term, there's the opportunity to amass far more with a LISA than a Help to Buy ISA, which offered a maximum bonus of £3,000 and is no longer available to open.
Savers can open a LISA at 18 and save into it until they turn 50, so maxing out a LISA for each of the tax years within that time could lead to more than £30,000 in bonus payments.
I certainly hope I've made it onto the first rung of the property ladder before reaching my fifth decade, and don't need to, however.
There is a big problem with LISAs though, and I think it needs to be changed sharpish to give us first-time buyers a better chance in getting keys for our first home.
To withdraw Lifetime ISA savings without being hit with a 25 per cent fee, savers need to either be purchasing their first home, be aged 60 or over, or terminally ill, with less than 12 months to live.
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The "buying your first home" withdrawal then has a whole list of rules and limitations:
- The property must cost £450,000 or less
- The property must be bought at least 12 months after the saver made their first payment into the Lifetime ISA
- They must use a conveyancer or solicitor to act for them in the purchase
- They must buy with a mortgage.
Granted, there has been an improvement to the price cap rule with the LISA - with a Help to Buy ISA, there's a purchase price cap of up to £250,000 or up to £450,000 in London.
But house prices are incredibly high and in parts of the UK, the average house price is worryingly close to the LISA property price cap.
In London, the average first-time buyer property price was £425,000 in June 2023, according to Zoopla.
It was £240,000 on average across the UK, but even when I've travelled home to the north of England, lots of the housing developments being built don't seem to be cheap starter homes.
Rather, pricey three, four and five-bedroom new-builds are cropping up seemingly all over the countryside.
Not only are they unaffordable for young people, but they're impossible to purchase with a Lifetime ISA.
One such development in a sleepy Yorkshire village proudly boasts of the new "desirable collection" which will suit a "range" of buyers. On the very same page, the price reads "from £489,995".
When addressing housing demand, we clearly desperately need affordable homes to be built.
These expansive new-builds costing a fortune are of no use to the majority of first-time buyers. They're absolutely pointless for those buying alone too. That's not just because of the deposit they'd need; single buyers would need a seriously high income to get a mortgage.
So while these expensive properties continue to be built, I think Chancellor Jeremy Hunt needs to be realistic.
The kind of homes we need aren't being created, and even if we can somehow manage to get a mortgage for a pricey new-build, buyers are at risk of a 25 per cent penalty on their LISA savings.
I don't understand why the Chancellor is continuing to limit our options by enforcing the £450,000 property price cap on Lifetime ISA savers.
The Spring Budget in March would surely have been the perfect opportunity to offer a lifeline to first-time buyers.
We've already forked out astonishing amounts on rent while saving for our first home.
Then, having spent years and years saving up for that all-important mortgage deposit, LISA savers are only allowed to choose from what is becoming an increasingly limited pool of properties.
