Autumn Budget 2026: First-time buyer ISA (FTBI)
Following consultation, the Government intends to introduce a new ISA to support first-time buyers from 6 April 2029. This will replace the lifetime ISA (LISA), although existing accounts may continue to operate as before until that date. LISAs will continue after that date; however, any new investments will need to be made into FTBIs.
A predecessor product, the help to buy ISA, may be transferred into an FTBI once these become available.
Contributions of up to £4,000 per annum will be permitted (as is currently the case for the LISA), with a 25% Government bonus available, subject to an overall maximum bonus of £20,000. The bonus will be calculated based on the balance at the end of the plan, although adjustments will be made to take account of investment growth and income earned during the saving period.
Despite criticism, the £450,000 property price cap will remain in place and will apply equally to existing LISAs and the new FTBI. One small relaxation is that the withdrawal charge where funds are withdrawn to purchase a property costing more than £450,000 will be reduced from 25% to 20% with effect from 29 October 2026, meaning investors will get their original investment back.
Government support for first-home borrowing
From April 2027, equity loans for first-time buyers will become available and are expected to assist around 70,000 purchasers. The scheme is aimed at those who would not otherwise be able to purchase their own home, and the maximum required deposit will be 2.5%.
The equity loans will cover up to 20% of the property’s value. Price caps on the value of properties purchased, together with income caps for borrowers will apply, with the limits varying by region.
The scheme is available only to households in England.
