First-time buyers with LISAs buy their home four years earlier, Tembo finds

First-time buyers who use a lifetime ISA (LISA) to purchase their first property are on average four years younger than those who do not, research by Tembo has found.

In analysis of 3,894 customers who bought their first home between March 2023 and February 2024, Tembo revealed that the average age of buyers who used a LISA to buy their first home was 29, while those who bought without were 33.

Tembo’s data showed that overall, around one in six first-time buyers in the last year used a LISA when purchasing their first home, having saved £16,261 on average in their LISA.

The LISA funds account for an average of 37% of the total deposit of £43,859, while the additional £28,598 was from other savings over and above the annual LISA limit or from inheritance and gifts from family.

Household income levels for LISA customers was found to be £41,336, while for those not using a LISA, this was 60% higher at £66,000.

First-time buyers who are not using a LISA have a 42% larger total deposit, which many also include family gifts, with a total deposit size of £62,500, compared to £43,859 for LISA customers.

There was also a difference in average property prices, which were 13% higher for those not using a LISA at £247,000 compared to £217,863 for LISA customers.

Founder and chief executive officer at Tembo Money, Richard Dana, said: "The LISA 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 LISA offers young people a great opportunity to access much needed additional funds to bolster their deposit."

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