On 23 June the Government published a consultation on the implementation of the First-Time Buyer ISA (FTB ISA), further details of which can be found at www.gov.uk/government/consultations/first-time-buyer-isa-consultation. The consultation sets out why we are looking to replace the Lifetime ISA (LISA), citing evidence from HMRC’s own publicly available figures and research as well as from the Treasury Select Committee’s report on the LISA.

The consultation also confirmed that until the new product is offered it will be possible to open a LISA, and that existing LISA holders will continue to be able to use their accounts in line with the existing rules.

Individuals will be able to hold both the new FTB ISA and an existing LISA, but will only be able to save into one in the same tax year. To ensure that current holders of the LISA do not lose out, LISA holders will be able to use any funds in their existing LISA and those in the new FTB ISA for the same purchase.

The property price cap, bonus level and subscription limit of the new First Time Buyer ISA will be set at a future fiscal event. Regardless of where the property price cap is set, the FTB ISA, LISA and Help to Buy ISA cap will be aligned so that no account holders will lose out.

Data from the latest UK House Price Index shows that the average price paid by first-time buyers remains below the Lifetime ISA property price cap in all regions of the UK except London, where the average price paid is affected by some boroughs with very high property values. This does not exclude prospective purchasers, who are still able to use the LISA on homes within the price cap. The Treasury Select Committee has said that the property price cap of £450,000 on the LISA ensures that the support goes to people who need it most.