Many people were encouraged by the Government to set up Lifetime ISA (Individual Savings Account), a Government-backed scheme that would help people buying their first home. However, the scheme has a cap of £450,000.

According to the Zoopla, the average price for property in London stood at £681,427 in January 2022. In a place like Hornsey & Wood Green, the median house price is £625,000 (way above the national average of £250,000). This means that the Lifetime ISA is woefully inadequate for first time buyers in the capital city. What’s more, Londoners are spending more time renting in order to save for a house. Therefore, many first-time buyers are much older with growing families. This cap doesn’t match the reality of first-time buyers or the cost of living in 2022.

We know that home ownership is falling dramatically. Given the current cost of living crisis and stagnated wages, young people must be offered realistic and fair opportunities to buy their first property. The Government’s Lifetime ISA needs an urgent upgrade to match the housing market in 2022. That’s why I wrote to the Chancellor to express my concerns about the Government’s failure to uphold its promise to first-time buyers:

Dear Mr Sunak,

I am writing to you to express my concerns about the Lifetime ISA (Individual Savings Account) cap of £450,000. I am acutely aware that many in my constituency will have saved through the LISA scheme and now face the prospect of not being able to use their savings due to the rise in house prices in Hornsey & Wood Green and across London.

According to the Zoopla, the average price for property in London stood at £681,427 in January 2022. This is a rise of 0.53% in the last three months (since October 2021) and rise of 0.12% since 12 months ago. This means that the current Lifetime ISA cap of £450,000 is woefully inadequate for first time buyers in the capital city.

Since the creation of the Lifetime ISA in 2017, the average UK house price has soared by 22%. If the LISA limit had increased accordingly, it would now be £549,000. My constituents, like so many across the country, have spent the last 5 years meticulously saving in order to purchase their home and it is unacceptable that the Government’s own calculations have failed to keep up with the soaring costs of properties and inflation. This is not good enough and the scheme is failing to keep up with its promises.

I would urge you to look in to this issue as a matter of urgency to ensure those who are doing the right thing and saving for their first home are not unduly punished by the lack of change in the upper limit in the LISA scheme.

I would be grateful if you would investigate this matter and provide a response to the raised concerns.

I look forward to hearing from you.

Yours sincerely,


The Minister’s response was so disappointing and offered no solution to constituents in this situation:

Dear Catherine,


Thank you for your letter of 4 January to the Chancellor of the Exchequer on behalf of your constituents expressing your concerns about the Lifetime ISA (LISA). I am replying as the minister responsible for this policy area.

The Government’s aim is to provide the opportunity for first-time buyers to enter the market. However, I am sure you will appreciate the need to balance this aim with

ensuring sustainable public finances. As you will know, the LISA supports prospective first-time buyers by providing a generous government bonus of 25 per cent on up to £4,000 of savings each year, per eligible individual. These funds, including the government bonus, can be used to purchase a first home up to the value of £450,000.

First-time buyers who can purchase a home valued over £450,000 are likely to have an income significantly above that of the average household in the UK and are therefore more likely to be able to purchase a first home without the support of this scheme. Accordingly, the Government maintains that the £450,000 price cap is appropriate to support most first-time buyers across the UK, who on average purchase less expensive properties. The most recent Office for Budget Responsibility forecast stated that these bonus payments will have an exchequer cost of £3.7 billion between 2021 and 2027. The price cap ensures that this significant investment of public money is more precisely targeted towards households that may find it more difficult to get onto the property ladder.

The Government currently has no plans to raise the LISA property price cap. However, I would like to assure you that the Government keeps all aspects of savings tax policy under review and considers all representations received.

I would like to thank you and your constituents for taking the trouble to make me aware of these concerns.


Yours sincerely,



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