As most people are aware, the government set up a very generous scheme at the end of 2015 known as Help to Buy ISAs where young people who had never owned a house before (first-time buyers) could save for a house and be given a free 25% bonus on top of their savings when they became able to purchase of a property. A Lifetime ISA, or 'LISA' as they're regularly referred to, offers a very similar deal but with considerable differences which you should watch out for/take advantage of. Some people may be taking advantage of a LISA to save for later in life (over 60) however, we shall be focusing on the benefits of using a LISA to purchase a property as a first-time buyer for the purpose of this blog. If you wish you can always keep your LISA after purchasing your first property and continue to save for retirement.

Advantages:

• A LISA can be a cash account or stocks and shares account
• You are allowed to pay up to £4,000 into a LISA each year
• You are paid the 25% at the end of each tax year so that you can start earning interest on that bonus money. For example, if you save the maximum of £4,000 in your first year of having a LISA, you will receive a 25% bonus of £1,000. As soon as that's paid you will be earning interest on £5,000 and you can still put another £4,000 into the LISA again in the next year!
• If you and your partner are both first-time buyers, you can save in your individual LISA accounts and use them both when you purchase together

Watch out for:

• In order to qualify for a LISA you will need to be between 18 and 39 years old
• If you wish to use your Lifetime ISA money towards the purchase of a property, you will need to be a first-time buyer
• If you are a first-time buyer you must ensure that the LISA is open for at least 1 year before using it to purchase a property
• If you need to withdraw the money (and you are not purchasing a property, are over 60 years old or terminally ill) you will be subject to a 25% charge which means you'll get out less than you paid in
• The property you purchase must cost £450,000 or less

So where do the solicitors come in?

Just as you need a solicitor to complete any property transaction you will of course need one for buying your first home. Our firm has lots of experience in dealing with first-time buyers and will happily walk you through the process to ensure that you know what's happening at all times. If you have had a LISA open for a year and are now looking to purchase your first home you can instruct us to act for you in the purchase. When you request the LISA money from the bank, we will then be able to confirm that you are a first-time buyer and complete all the necessary paperwork for no additional charge to our usual fees.

If you are a first-time buyer who is looking to purchase in the next few years, make sure you give consideration to opening a LISA and make sure you get in touch with our friendly team to discuss your purchasing options.