For first-time buyers in the London residential property market, a key support scheme is increasingly losing its impact. According to recent analyses by comparison site reallymoving, more than a third of all first-time buyer transactions in the British capital now exceed the current price cap of the government Lifetime ISA (LISA) scheme. The statutory threshold remains unchanged at a purchase price of £450,000.
According to the findings of the analysis, purchases above this threshold accounted for 34 per cent of the entire first-time buyer segment in London in 2026. This figure marks a noticeable increase compared to earlier market phases: in 2017, the share of purchases above the scheme limit stood at 25.7 per cent.
Structural discrepancy between scheme threshold and price levels
The survey illustrates how ongoing capital growth in London residential property poses operational hurdles for aspiring homeowners. The Lifetime ISA scheme was designed to support savers purchasing their first property with a government bonus on their accumulated deposit. However, if the final purchase price of the property exceeds the £450,000 limit, the intended support advantage for house purchase is forfeited.
- —The share of first-time purchases above the £450,000 threshold rose from 25.7 per cent in 2017 to 34 per cent in 2026.
- —The statutory price cap remains frozen at £450,000, while London price levels have climbed steadily.
- —A growing proportion of first-time buyers can no longer use their accumulated scheme funds as intended for their purchase.
Implications for first-time buyers in the capital
As reported by industry portal PropertyWire based on figures from reallymoving, the increase of more than eight percentage points reflects growing pressure on market participants. While the price limit for accessing the bonus has remained static for years, entry-level prices across large parts of the London urban area have moved significantly higher.
For market participants, this trend means that first-time buyers must in practice either relocate to more peripheral locations or complete their property purchase without the anticipated support. The gap between market reality and scheme rules therefore continues to limit the effectiveness of state incentives in London's high-value segment.
