Martin Lewis Voices Disappointment as Budget Overlooks First-Time Buyer LISA Reform

Martin Lewis, the financial advocate known for founding Money Saving Expert, has expressed his 'disappointment' that his campaign to reform financial aid for first-time home buyers was left unaddressed in the Spring Budget announcement. On March 6, Chancellor Jeremy Hunt presented his financial plans, detailing several measures, including tax cuts and the elimination of certain tax breaks for second homeowners. However, significant anticipated reforms on property purchasing aids were not included.

Lack of Reforms for First-Time Buyers

Prior to the announcement, there were expectations that the property sector might see impactful reforms such as Stamp Duty cuts and new mortgage offers facilitating first-time buyers to secure homes with only a 1 percent deposit. An area of anticipated change that garnered particular attention was the Lifetime ISAs (LISAs), a saving scheme designed to assist first-time buyers in gathering funds for their initial home purchase.

LISAs offer a 25 percent government bonus on top of personal savings, with an annual maximum investment of £4,000 for individuals aged 18 to 39. Despite its benefits, the LISA has a critical limitation that imposes a penalty on first-time buyers if they purchase a property above the £450,000 price cap, a figure that has not been revised since 2017 despite significant increases in housing prices.

Martin Lewis has been an active voice in calling for an adjustment of this cap to reflect the reality of current house prices, which have risen considerably—a point that Chancellor Hunt recognized on Lewis's ITV show, even hinting at a considerate approach towards LISA reform.

Disappointment but Not Despair

Following the Chancellor's budget speech, Lewis communicated his discontent to his extensive online following, revealing the Chancellor's position on deferring the decision to reform LISAs based on unstable property price trends and budget constraints. Lewis relayed that while no changes were proposed at this time, Hunt did not rule out future reforms, expressing a desire for a comprehensive overhaul of the LISA system beyond just penalty removal.

Housing expert Kate Steere also shared her views post-budget, emphasizing the missed opportunity to ease the burdens for first-time buyers. She highlighted the discrepancy between the rise in average house prices since the LISA's inception and the unchanged property price cap, which results in penalties for those using the savings scheme.

disappointment, budget, LISA