Lenders’ trade body UK Finance wants the government to use next month’s Budget to announce a new Help to Buy scheme and higher property purchase limits on Lifetime ISAs.
In its submission to the Treasury ahead of the Spring Budget it says it wants the Chancellor to:
· Amend the Lifetime ISA scheme: increase the annual cap that can be deposited (in line with inflation as a minimum) and amend the early access penalty to 20% rather than the current 25%. Remove the withdrawal penalty, provided the funds are re-deposited to the LISA within the financial year they are withdrawn; this will enable savers to use those funds for unexpected costs (for example, replacing a domestic appliance);
· Additionally, the limit on property purchase values should be increased in line with the annual House Price Index. For shared ownership purchases using a LISA, the cap should be aligned with the value/proportion of the property being purchased, as opposed to the total value of the property
· Make the first-time buyer stamp duty threshold of £425,000 permanent. Ensure that the Stamp Duty thresholds are reviewed annually in line with the House Price Index to enhance fairness across the housing market. Stamp duty for has been lifted to £425,000, from £300,000, but is currently due to be scrapped in a year’s time;
· Reintroduce a scheme such as Help to Buy (equity loan) for first time buyers, but in a more targeted way to account for regional variations in property value;
· Expand and accelerate the roll out of the First Homes scheme, and initiate a review of the consumer experience of Shared Ownership, using the work of Social Finance backed by Lloyds Banking Group and Leeds Building Society and a number of shared ownership providers as a blueprint.
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