First time buyers who use a Lifetime Isa are able to buy their home four years earlier than those who do not, research from Tembo has revealed.
The research, which analysed data of 3,894 first-time buyers, found the average age of Lisa home-buyers was 29, while those first-buyers purchasing a home without using a Lisa were 33.
Additionally, Tembo found around one in six first time buyers in the past year used a Lisa when purchasing their first home.
These buyers saved £16,261 on average in their Lisa at the point of purchase and these Isa funds accounted for an average of 37 per cent of the total deposit of £43,859.
The additional £27,598 was from other savings over and above the annual Lisa limit or from inheritance and gifts from family.
Tembo Money founder and CEO, Richard Dana, said: “The Lifetime Isa is a really effective way for many buyers to reduce the time it takes to purchase their first home.
“With minimal government support announced in the recent budget for homebuyers, the Lifetime Isa offers young people a great opportunity to access much needed additional funds to bolster their deposit.”
Tembo also discovered that household income levels for Lisa customers was £41,336, while, for those not using the Isa, household income was 60 per cent higher at £66,000.
A disparity was also found in deposits as first time buyers who did not use a Lisa had a deposit that was 42 per cent larger than those who did (£62,500 and £43,859 respectively).
There was also a difference in average property prices, which were 13 per cent higher for those not using a Lisa, at £247,000 compared to £217,863 for a Lisa customer.
Despite concerns around the upper house price limit of £450,000 for Lifetime Isas purchases, based on over 35,000 Tembo first time buyer customers over the past three years, just 1,140 were purchasing a home for more than the upper limit of £450,000.
This meant that 97 per cent of customers were buying an eligible home for a Lisa purchase.
tom.dunstan@ft.com
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