First-time buyer reform could reshape conveyancing risk landscape
The Government’s consultation on replacing the Lifetime ISA with a new first-time buyer savings product by April 2028, and review of the £450,000 property price cap, could have significant legal and transactional implications for buyers and property professionals alike.
According to Beswicks Legal, the reform is a live conveyancing risk issue already affecting transactions on the ground.
Sophie Ellis, Conveyancing and Property Solicitor at Beswicks Legal, comments:
“We are increasingly seeing first-time buyers caught out by the £450,000 LISA cap late in the transaction process. When a purchase price exceeds the threshold, even marginally, buyers can face losing part of their government bonus, or reconsidering the purchase altogether. At that stage, it becomes a transaction risk, not only an issue of budgeting.”
While reform may be welcomed in principle, uncertainty during the consultation and transition period could create hesitation among buyers currently saving into LISAs.
“If the Government does move to a replacement product by 2028, clarity on transitional arrangements will be critical. Buyers making long-term savings decisions today need certainty about how their funds can be used in two or three years’ time.”
Policy mismatch adding confusion
Currently, first-time buyers can benefit from Stamp Duty relief on properties up to £500,000, yet LISA withdrawals remain capped at £450,000. According to Sophie, this misalignment adds unnecessary complexity to affordability planning.
“We now have a situation where a buyer may qualify as a first-time buyer for Stamp Duty purposes but still be penalised under the LISA rules. That inconsistency creates confusion and, in some cases, delays while buyers reassess their position.”
Advice for first-time buyers
Sophie advises buyers to:
• Check early in the process whether their intended purchase price is comfortably within LISA limits.
• Factor potential valuation changes into their calculations before exchange of contracts.
• Seek legal advice before making assumptions about how their LISA funds can be used.
“What’s important is preparation. Buyers should understand the legal and financial mechanics of their deposit before they make an offer, as small technicalities can have real financial consequences if overlooked.”
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