A single first-time buyer (FTB) would have to invest in a Lifetime ISA (LISA) for seven years and five months to reach a deposit of £45,000, Hargreaves Lansdown reveals.
The analysis shows that a single person would have to invest a total of £29,667 to reach the deposit target, with the government contributing £7,417 towards it.
Meanwhile, a couple could get there by investing for four years and a month, paying £32,667 and the government contributing £8,166.
The average FTB property costs £232,769, according to the latest Halifax house price data.
The top five locations for those paying into a Hargreaves Lansdown LISA in 2024 are South West, London, Bristol, South East London, East London and Reading.
Hargreaves Lansdown head of personal finance Sarah Coles says: “House prices are closing in on the record highs of 2022, leaving FTB with a mountain to climb in raising a deposit. In September this year, the average FTB property hit £232,769 – just £1,000 off their post-pandemic peak.”
“The fact that mortgage rates remain relatively high – with the average two-year rate at almost 5.4% – means monthly payments are also a horrible stretch unless they can build a reasonable down payment.”
She explains: “The LISA can make an enormous difference to FTB, particularly where house prices are higher.”
“If they chose to save rather than invest, the process would take longer. If you made 2% on a cash LISA, a single person paying in the maximum might need to save for eight years and four months and a couple for four years and four months.”
