18 August 2026
Ahead of HM Treasury’s consultation on the First Time Buyer ISA closing tonight, please see the following comment from Sam Christopher, proposition director at Quilter:
“In little more than a decade, we have seen the Help to Buy ISA, the Lifetime ISA and now the proposed First Time Buyer ISA. In that time, aspiring homeowners have had to navigate huge affordability pressures, and the homebuying process was only made more challenging by the changing rules, conditions and stipulations within these products that have not always reflected the realities of the housing market. We are pleased that the government has recognised that the Lifetime ISA was a confused product in desperate need of simplification, but the success of the proposed First Time Buyer ISA will depend entirely on the detail and whether it delivers the simplicity, clarity and flexibility needed for a house purchase.
“The LISA attempted to serve two very different purposes in helping people save for a property and for retirement, but this complexity and the confusion it caused undermined its potential for success. A more clearly targeted product would avoid that confusion, but it must also retain the features that worked for savers.
“In particular, the government should preserve the principle of paying bonuses as contributions are made, rather than only at the point of purchase. This allows savers to benefit from growth on those bonus payments over time, helping them build larger deposits and making home ownership more achievable. At the same time, the punitive withdrawal penalty associated with the Lifetime ISA should not be repeated in this product. If someone’s circumstances change and the need access to their own savings, the government may reasonably recover any bonus paid, but savers should not lose part of their own savings in the process.
“The need for a house price cap should also be carefully considered. Property prices vary significantly across the country and fixed thresholds have a habit of quickly becoming outdated. Rather than limiting the value of the home someone can buy, a more sustainable approach would be to place sensible limits on the overall government bonus available through the product. This would keep costs manageable for the government while ensuring first time buyers are not penalised for purchasing homes above a prescribed value. Given the average first time buyer age has gradually increased, this would also reflect the fact that their circumstances and needs may be entirely different to someone who was once able to join the property ladder in an earlier phase of life.
“Constant changes and the introduction of new products risk undermining confidence and leaving people unsure whether a product will suit their needs. The government must provide certainty that the First Time Buyer ISA will be fit for purpose for a long time to come, and it should embark on a clear public awareness campaign to ensure that people understand how the product works and how it fits into their wider financial plans.”
