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Can you use a Lifetime ISA to buy an apartment?

16 November 2021

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Question by Leah

Can you use a Lifetime ISA to buy an apartment?


Answered by Claire Sweet

Hi Leah,

Yes, You can use your Lifetime ISA (LISA) to buy an apartment as long as all the other conditions are all met :

  • The property costs £450,000 or less

  • You buy the property at least 12 months after you make your first payment into the Lifetime ISA

  • You use a conveyancer or solicitor to act for you in the purchase - the ISA provider will pay the funds directly to them

  • You’re buying with a mortgage

The key thing is that getting a mortgage for an apartment can be a little more tricky than buying a house, and there are some things you need to watch out for.

  • The apartment should be leasehold and not freehold

  • Avoid properties above businesses that could pose a fire risk (fast food / hair salons etc.)

  • The length of the lease remaining - some lenders need there to me a minimum number of years left (typically 80 years or more at start of mortgage or 20/30 years left after your mortgage term ends) which may limit your choice of lender or mean you need to have a shorter mortgage term (and higher monthly payments)

  • If there is a service fee each month, this plus the ground rent will be taken into account when calculating your mortgage affordability

Hope this helps - happy house hunting!

Claire

Answered by

Claire Sweet

Financial Adviser and Money Coach

I'm an award-winning Financial Adviser and Money Coach, featured in The Telegraph, Moneywise and Sheerluxe (and a regular guest on BBC Radio Kent, as an expert in my field).