More than a third of first-time buyer purchases in London now exceed the Lifetime ISA’s £450,000 property price cap, according to new data from reallymoving, highlighting the growing affordability challenges facing buyers in the capital.
The comparison site’s research shows that 34% of London’s first-time buyer purchases exceeded the LISA cap in 2026, up from 25.7% when the product launched in 2017. The 8.3 percentage point increase underscores the widening gap between the unchanged cap and actual property prices.
Regional disparities widen
Nationally, 8.1% of first-time buyer purchases have exceeded the price cap in 2026, compared with 4.7% in 2017. After London, the South East recorded the second-highest proportion at 10.8%, followed by the East of England at 7.3%.
The Lifetime ISA allows first-time buyers to save for a mortgage deposit tax-free and provides a 25% government bonus. However, buyers purchasing properties above the £450,000 cap cannot use their LISA savings without incurring withdrawal charges.
Reallymoving’s analysis found that adjusting the cap in line with house price inflation since 2017, based on the Land Registry’s UK House Price Index, would increase it to approximately £597,000, representing a 33% rise of nearly £147,000.
Industry calls for reform
Rob Houghton, 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 company is urging the government to confirm details of the proposed First Time Buyer ISA, intended to replace the existing LISA product, in the Autumn Budget. Houghton suggested the government should consider a separate, higher cap for London, following the precedent set by the Help to Buy ISA.
The findings come as buy-to-let lending shows signs of growth and inflationary pressures continue to influence housing policy.
The data highlights ongoing challenges for first-time buyers in high-cost regions, where government support schemes have not kept pace with property price increases over the past nine years.
