Third of London FTB purchases exceed LISA price cap

More than a third of London first-time buyer purchases have exceeded the LISA price cap of £450,000 in 2026, according to data from reallymoving.

The share stood at about 26% when the Lifetime ISA launched in 2017. The rise of more than eight percentage points, reallymoving says, shows the growing gap between a cap that has not changed since launch and the cost of a first home in the capital.

The comparison site for home movers is urging the government to use the Autumn Budget to confirm the details and launch timetable of the proposed First Time Buyer ISA, which would replace the existing LISA. It also wants the new product to carry an updated property price cap that reflects current prices. First-time buyers who use a Lifetime ISA to buy a property currently receive a 25% government bonus on savings of up to £4,000 per tax year.

Across the UK, just over 8% of first-time buyer purchases have exceeded the LISA price cap so far in 2026, compared with almost 5% in 2017. London (34%), the South East (almost 11%) and the East of England (about 7%) have the highest proportions of purchases above the limit. Buyers in this position cannot use Lifetime ISA savings towards their purchase without incurring a withdrawal charge.

The firm’s analysis also tested what an updated cap might look like. Increasing the national £450,000 limit in line with UK house price inflation since 2017, based on the government’s UK House Price Index, would lift the LISA price cap to about £597,000. That is a rise of almost £147,000, or 33%.

Rob Houghton, founder and chief executive of reallymoving, said: “Despite relatively weak house price growth in London since 2017, the fact that more than a third of first-time buyer purchases in the capital now exceed the LISA price cap highlights the extent to which a single national cap disadvantages buyers in more expensive regions.

“The government must ensure the new First Time Buyer ISA reflects the housing market buyers are navigating today. We’re urging the Chancellor to confirm the details and the launch timeline in the Autumn Budget and commit to a higher price cap, with regular reviews going forward. The government should also consider a separate, higher cap for London, following the precedent set by the Help to Buy ISA, to reflect the higher prices faced by buyers in the capital.”