Help to Buy ISA Useless in London

BlueBlubbaWhale · 25/08/2023 20:47

But anyone starting out has to build up. Hardly anyone starts off exactly where they want to be in terms of size and/or location.

Luckydip1 · 25/08/2023 20:56

Agreed, useless in London.

blueshoes · 25/08/2023 20:58

Yes, useless in London. It is a trap.

MintJulia · 25/08/2023 20:58

So get started with a one bed, stay a few years and then move up to a scruffy two bed the same as everyone else does.

lljkk · 25/08/2023 21:01

other than the PM, who actually needs to live in Zones 1-2 ?

blueshoes · 25/08/2023 21:03

It is not worth starting small just to get a few extra thousand from the LISA if you can afford something more suitable above 450K. Instead you just end up tying up your capital in the LISA until pensionable age that you could put towards the house deposit now.

Moving twice by starting small rather than once by starting bigger (and over the 450K threshold) will eat up the extra odd 1,000 in interest in terms of stamp duty and moving costs, not to mention any capital appreciation over that time.

Emmaemmeline · 25/08/2023 21:06

Yep , useless
Luckily for me I’m old and live in the countryside
DS has taken the money out and invested it in premium bonds ( and is carrying on renting as he can’t afford to buy where they rent

Peony654 · 25/08/2023 21:09

I wouldn’t agree. We bought a big 2-bed flat in zone 3 south London for £275k few years ago. Isn’t worth a lot more now!

JemimaTiggywinkles · 25/08/2023 21:19

You could always do what people in (non-SE) poor areas wanting decent jobs have been told to do for decades. Ie, move somewhere else or just accept what you can get where you are.

Seriously though, using government money to further increase the already extortionate London house prices would be insane. Can you at least take about the capital you've paid in (ie not the extra 20%) if you're buying somewhere which is above the £450k?

Clymene · 25/08/2023 21:22

seastarina · 25/08/2023 20:43

The max property value is £450k. That’s great if you want a one bed in Zone 3. But for those who want a one bed more centrally or a bigger flat to start a family, it’s useless.

Most people can't buy a 2 flat in central London as their first property

Twiglets1 · 25/08/2023 21:27

Yes I feel your pain.

My daughter bought a flat in London last year & wanted to use her LISA as had been saving into it for years.

All she could get in zone 2 North London for 450k was a 1 bed flat with a communal garden. The LISA limits have not kept up with inflation at all.

BiscuitsandPuffin · 25/08/2023 21:30

The LISA is free money. Just use it for your retirement. I'm ineligible to use one to buy a house because I inherited (a 1/9 share of a northern) house when I was 12 that was immediately sold and my parents spent the money themselves. So I'm going to use mine for retirement. It's still free money. 🤷‍♀️

Tiredalwaystired · 25/08/2023 21:31

Then do what most people do and live a bit further out. Lots for that money in zone four or five and often with only a twenty to thirty minute commute in. Loads of great schools further out too, if you’re considering family.

Twiglets1 · 25/08/2023 21:35

How do people find the deposit for their first property if the money they have been putting into a LISA they decide to use for retirement instead?

Not to mention many people have a company pension scheme which is better than using a LISA for your pension.

Clymene · 25/08/2023 21:39

Twiglets1 · 25/08/2023 21:27

Yes I feel your pain.

My daughter bought a flat in London last year & wanted to use her LISA as had been saving into it for years.

All she could get in zone 2 North London for 450k was a 1 bed flat with a communal garden. The LISA limits have not kept up with inflation at all.

Heartbreaking

Twiglets1 · 25/08/2023 21:41

@BiscuitsandPuffin how can you use yours for a pension if you’re ineligible for a LISA?

Chalatte · 25/08/2023 21:42

This was a horrible waste for me
We put in a good chunk of our deposit into the h2b isa over a couple years and wanted to use it towards the house, but found that the houses below this range in London were hardly worth it. Then, I got a job which changed how much we could afford to borrow. So we gave up and withdrew our help to buy isa, and lost the % they take as penalty 😥

Don't do l it, just not worth it unless you are a single person buying a flat.

If you are a family chances are you will not find anything that fits or that your financial status will change enough to render the isa useless. I strongly recommend against it for London buyers!

bellac11 · 25/08/2023 21:44

So buy in zone 4, or gasp zone 5

Shudder....

KievLoverTwo · 25/08/2023 21:45

These sorts of schemes are not designed to help the common (wo)man, just their property developer mates, and to pay lip service re 'helping.'

Twiglets1 · 25/08/2023 21:47

Chalatte · 25/08/2023 21:42

This was a horrible waste for me
We put in a good chunk of our deposit into the h2b isa over a couple years and wanted to use it towards the house, but found that the houses below this range in London were hardly worth it. Then, I got a job which changed how much we could afford to borrow. So we gave up and withdrew our help to buy isa, and lost the % they take as penalty 😥

Don't do l it, just not worth it unless you are a single person buying a flat.

If you are a family chances are you will not find anything that fits or that your financial status will change enough to render the isa useless. I strongly recommend against it for London buyers!

Yes I agree. It’s a good scheme for many FTBs but not people intending to buy in London.

Blanketenvy · 25/08/2023 22:09

KievLoverTwo · 25/08/2023 21:45

These sorts of schemes are not designed to help the common (wo)man, just their property developer mates, and to pay lip service re 'helping.'

I'd imagine that most f2bs do not have the means to be buying 500k properties as their first home. Helpful for people on more of an average income in an average area.

blueshoes · 25/08/2023 22:14

Blanketenvy · 25/08/2023 22:09

I'd imagine that most f2bs do not have the means to be buying 500k properties as their first home. Helpful for people on more of an average income in an average area.

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In London, it is not unusual for a couple buying together to look at properties exceeding 500K. Parents may need to help with deposits.