Martin Lewis issues act now alert to anyone who owns a home worth less than £450,000

Martin Lewis
-Credit: (Image: (Image: ITVX))


Martin Lewis, the renowned financial guru from BBC Sounds and ITV, has issued a warning to UK residents considering purchasing properties valued at £450,000 amidst the ongoing Cost of Living crisis. He reached out to his Twitter and X followers, urging them to participate in a policy research survey regarding the Lifetime ISA.

Mr Lewis wrote: "Do you have (or have had) a Lifetime ISA? If so, especially if you worry about the £450,000 property cap please would you take a couple of minutes to answer our policy research survey."

The survey's purpose is detailed as follows: "We want to hear from people who have a Lifetime ISA or who had one in the past. We hope to use this information to support our campaigning on the Lifetime ISA. The answers you provide are anonymous and individual responses won't be shared."

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He reassured that the survey would be a quick process: "This short survey will take less than five minutes." In response to a social media user's concern about potential financial losses due to a partner already owning property, Mr Lewis clarified: "As a) You wont buy a flat, in which case yes you would or b) as you'd later buy together, in which case you can still use the LISA (as long as property is under threshold) and get the bonus," reports Birmingham Live.

Campaigners are pressing for changes to the government scheme for would-be first-time buyers that “fines” people if they use it to buy a home costing more than £450,000. After the post a person expressed worries about the London housing market, stating: "I live in London and only apartments are affordable at the £450K cap. A decent apartment (e.g. energy-efficient, quiet neighbourhood) hovers around £450K. My concern is that when interest rates decrease (and prices increase), buying an apartment in London will be infeasible."

Another posted: "House price in my area was capped at 250k, relatively useless. Seems like it's London and Everywhere else just like most things... Doesn't meet it's intended purpose." Another said: "Probably would have done had I not been as old as I am -59. But it does need some fixing re the cap."

Mr Lewis, the founder of MoneySavingExpert.com, is among those calling for an urgent revamp of the rules that apply to lifetime ISAs, which let people save for a first home or for their retirement. He previously said the scheme was, in its current form, “broken” because it unfairly takes money off some young people and they get back less than their investment.

Lifetime ISAs were launched in 2017. Savers can pay in up to £4,000 each year until they are aged 50 and the government will add a 25% bonus to people’s savings – added monthly – up to a maximum of £1,000 a year. That 25% bonus has proved very attractive – official data shows that 662,000 lifetime Isas had money paid into them in 2021-22. Today, the number of “live” accounts is probably between 700,000 and 800,000.

However, if a saver uses the scheme to buy their first home, the property must cost £450,000 or less – a cap that has stayed the same since April 2017, even though average UK house prices as measured by the Land Registry are up by about 33% since then.

If the cap had risen in line with this growth, it would now be about £600,000.