I have dutifully saved for a home using an Isa. Now I am being penalised £1k for buying

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But then I noticed the catch: all the money I had slowly funnelled away into the Lisa could only be used on a property worth £450,000 or less. This has been in place nationwide since April 2017 when the Lisa was first introduced. I was kicking myself.

In five years, the Treasury hadn’t thought it necessary to increase the £450,000 cap – despite the average first-time buyer property price increasing by 16pc in that time. According to figures from Hamptons, 9.4pc of that rise occurred in 2021, as buyers scrambled to navigate the recent price boom.

In the capital, the situation is even worse. The average first-time buyer price has soared from £411,000 in 2017 to £438,000 last year. If that kind of growth continues, first-time buyers saving with a Lisa will soon be frozen out of the London property market.

To top it all off, the Treasury will now penalise me 25pc to take my money out of the Lisa if I opt to buy a property above the £450,000 threshold. This means it will take money that I have saved off me, not just its top-up. I will have to pay back £5,000, including a penalty of £1,000 of my own savings. This seems a high price for wanting to buy a home with my partner.

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