• Bristol’s popularity rose 3% YoY, while Manchester saw a 14% increase in LISA-enabled house purchases.
  • 23% more first-time buyers chose to settle in Birmingham over the last year.
  • South East London makes the top ten LISA hotspots list for the second year in a row despite affordability concerns across the capital.
  • Over the last twelve months, Moneybox has seen a 38% increase in Lifetime ISA accounts opened.

March 22, 2024: Bristol is the UK’s first-time buyer Lifetime ISA hotspot for the fourth year in a row, according to new data from savings and investing app, Moneybox.

Using customer house purchase withdrawal data from the last twelve months, Moneybox, the leading provider of Lifetime ISAs in the UK, revealed that more people purchased first homes in the south west city than anywhere else in the country thanks to help from the government incentivised savings scheme.

First-time buyers in Bristol paid £302,939 on average for their property (-1.75% year-over-year), withdrawing on average £14,372 from their Moneybox LISA to put towards their deposit (+14% more YoY).

The second most popular city was Manchester, which saw a 14% increase in LISA house purchases. Those in the north west city paid an average of £260,989 for their new home (+3.65% YoY) and made a LISA withdrawal of £13,555 on average, 14% more than the previous year.

Birmingham’s popularity soared by 23% last year with buyers paying £254,985 on average for their first home and cashing out £13,307 from their LISAs for their deposit (+12% YoY).

Edinburgh came fourth on Moneybox’s list, followed by Glasgow which moved up from sixth place last year to round out the top five first-time buyer LISA hotspots in the UK.

Brian Byrnes, Head of Personal Finance at Moneybox, comments: “Over the last four years, Bristol, Manchester and Birmingham have consistently topped the table as the most popular places for first-time buyers to put down roots. 

“With excellent transport links, a vast and diverse employment market and vibrant social scene, these areas are increasingly drawing young buyers who may have previously chosen to move closer to the capital. 

“Bristol, for example, with highly-respected universities feeding into its burgeoning tech sector, is becoming an increasingly attractive place for young people to live and work. The city was also recently named as one of the top European tech hubs, attracting many young professionals to relocate.

“Manchester and Birmingham still offer great value for first-time buyers and investment in the Northern Powerhouse has created more job opportunities and resulted in better infrastructure which has also added to the appeal of places like Leeds and Sheffield.”

The Lifetime ISA was launched by the government in 2017 to encourage young people to get into the habit of saving towards their first home or for a more comfortable retirement.

Those aged 18-39 can pay in up to £4,000 each tax year and get a 25% government bonus on top of their savings, adding up to £1,000 of free money each tax year.

More than 170,000 first homes have been bought using the scheme to date and the product has never been more popular. Moneybox alone has seen a 38% increase in LISA accounts opened over the last 12 months.

Moneybox’s Byrnes adds: “Despite ongoing cost-of-living pressures in recent years, aspiring first-time buyers are showing impressive commitment and dedication towards achieving their goal of buying a home of their own. 

“Those who have bought in the last year even managed to save 10% more towards their deposit than previous cohorts. And, despite London being widely regarded as the least affordable city, many were able to make their dream a reality in the capital with South East London featuring in the top ten LISA hotspots, two years in a row.

“Affordability considerations will no doubt continue to drive first-time buyer behaviour in the coming years, as persistent cost-of-living challenges continue to put pressure on finances up and down the country. Perhaps for this reason, the Moneybox Lifetime ISA has never been so popular, with hundreds of thousands of young savers across the UK seeking its help to build a suitable deposit in the last year alone.”

Londoners paid on average £356,713 for their first homes (- 2% YoY) and made a withdrawal of £15,514 from their Moneybox LISAs to go towards their deposit. 

Unsurprisingly, buyers in the capital paid 39% more for their first homes than any other city on Moneybox’s list of LISA hotspots – 18% more than buyers in Bristol.

First-time buyers in Belfast paid the least to get their foot on the property ladder, paying £188,314 on average.

Under current Lifetime ISA product rules, savers must adhere to a £450,000 property price cap. If the value of the property they purchase exceeds this, they will incur a 25% government penalty fee. 

While the nationwide average paid for a property by a Moneybox LISA saver was £257,000 last year, if the price cap had risen in line with house price inflation, it would currently stand at £607,000.

This has led to several campaigns calling on the government to increase the price cap to ensure the product remains fit for purpose, particularly for those living in some of the most expensive parts of the country. 

Byrnes concludes: “The Lifetime ISA has been an absolute lifeline for a whole generation of young savers who have been able to buy their first home far sooner than would otherwise have been possible, thanks to the fantastic 25% government bonus the savings scheme offers.

“While we were disappointed the Chancellor did not introduce any measures to future-proof this fantastic product in the recent Spring Budget, we are encouraged that it remains on his agenda. In many ways it has never been more challenging to be a first-time buyer and raising a deposit remains one of the biggest hurdles many face on that journey. 

“We are committed to doing all we can to ensure the product is future-proofed so that it continues to meet the needs of the next generation of homeowners and provide a much-needed boost to aspiring first-time buyers across the country.”

 

City/Region Average property price paid Average LISA withdrawal amount YoY increase in Moneybox LISA savers buying in this region 2022 Rankings YoY change in property price paid by LISA homebuyers
1 Bristol £302,939 £14,372 2.66% Bristol  -1.75%
2 Manchester £260,989 £13,555 14.29% Manchester 3.65%
3 Birmingham £254,985 £13,307 23.07% Sheffield  0.42%
4 Edinburgh £244,455 £13,013 28.03% Birmingham -1.29%
5 Glasgow £200,421 £12,485 30.14% Edinburgh -1.58%
6 Belfast £188,314 £12,018 23.86% Glasgow -3.19%
7 Sheffield £210,114 £12,336 28.65% Belfast -0.28%
8 Reading £319,799 £14,359 29.65% South East London 0.19%
9 Leeds £244,871 £13,046 23.04% Reading -2.46%
10 South East London £344,040 £15,162 3.29% Chelmsford -2.81%

 

ENDS

Notes to editors:

Moneybox Lifetime ISA house purchases and withdrawal data from 01/03/2023-01/03/2024 and 01/03/2022-01/03/2023.

About Moneybox:

Moneybox is the award-winning app on a mission to help people build wealth with confidence so they can enjoy life, today and tomorrow. Launched in 2016 by co-founders Ben Stanway and Charlie Mortimer, the company has experienced rapid growth, and today has over £6bn in assets and a community of more than 1.3 million customers. Moneybox provides a range of great value products and services, across saving, investing, home-buying, and retirement as well as helpful tools and educational content, to help people manage and achieve their short, mid, and longer-term financial goals. Moneybox enables customers to set money aside in the way that suits them best using round-ups, regular deposits, or instant payments. In March 2022 Moneybox raised £35m in a Series D funding round, led by Fidelity International Strategic Ventures, existing investors Oxford Capital, CNP, Burda and Breega, plus new investor Polar Capital. This brings total funds raised by the digital wealth manager to £100+ million.