Recent data shows a sharp rise in first-time buyers using a Lifetime ISA (LISA) to purchase their first home in the 2024/25 tax year — something I’m seeing more and more of in the mortgage market here in Newcastle and Northumberland
According to the latest figures, 82,750 people withdrew money from their LISA to buy their first property — that’s around 30,500 more than the previous tax year.
The average withdrawal also increased by £857, reaching £15,782.
A big driver for this was the rush from FTBs to complete before the stamp duty changes that took effect in April 2025.
But More Buyers Are Being Hit With LISA Withdrawal Penalties
While many use their LISA exactly as intended, a growing number are facing 25% withdrawal charges for accessing the money early.
You can withdraw from a LISA without penalty only if:
- You’re buying your first home (up to £450,000)
- You’re aged 60+
- You’re terminally ill
Any other reason triggers the 25% charge, which effectively means losing some of your own savings too.
In 2024/25, LISA withdrawal charges hit £102m, up from £75.3m the year before.
If You’re a First-Time Buyer, Speak to a Mortgage Advisor Before Withdrawing
If you’re unsure whether a LISA withdrawal is allowed — or if there are better ways to structure your deposit or mortgage application — getting proper advice can save you money.
There are often alternative options that avoid losing 25% of your savings.
If you’re a first-time buyer in Cramlington, North Tyneside or the surrounding areas and want to understand how your LISA fits into your mortgage plans, I can run through the best approach with you.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Source: uk.finance.yahoo.com
