My buyer is using a Lifetime ISA. Will it delay my sale?
Published 17 September 2026 · 7 min read · By Evren Ergin
A buyer using a Lifetime ISA rarely delays a sale, as long as their conveyancer requests the money early and the agreed price is £450,000 or less. The rules only bite when the request is left late, the purchase price goes over the cap, or completion drifts beyond the time limits HMRC sets.
TL;DR
- •A Lifetime ISA can only be used towards a first home costing £450,000 or less, bought with a mortgage, at least 12 months after the buyer's first payment into the account.
- •The money goes straight to the buyer's conveyancer, and HMRC guidance gives the ISA provider up to 30 days to pay once it has the conveyancer's declaration.
- •The purchase must complete within 90 days of the conveyancer receiving the money, with extensions of 60 and then 30 days available while the sale is still progressing.
- •Ask when the buyer's conveyancer will request the funds, and do not agree any price change that takes the purchase above £450,000 without checking the buyer's plan still works.
Advertisement
If your agent has told you the buyer is a first-time buyer with a Lifetime ISA, you may be wondering whether government paperwork is about to slow everything down. In most sales it does not. The process is well worn, and the risks are specific enough to check in one conversation.
A Lifetime ISA, or LISA, is a savings account for people who open it between 18 and 39. Savers can pay in up to £4,000 a year and the government adds a 25% bonus, up to £1,000 a year. The money can be used without penalty to buy a first home, subject to the rules below.
What rules does my buyer have to meet to use their Lifetime ISA?
Lifetime ISA rules for buying a first home (GOV.UK and HMRC)
| Rule | What it says | Why it matters to you as the seller |
|---|---|---|
| Price cap | The property must cost £450,000 or less | A price above £450,000 means the buyer cannot use the ISA without a 25% withdrawal charge |
| 12-month rule | The purchase must be at least 12 months after the first payment into the ISA | A young account can force the buyer to wait or find the money elsewhere |
| Mortgage required | The buyer must be buying with a mortgage | A LISA buyer is never a cash buyer |
| Conveyancer | The ISA provider pays the money directly to the buyer's conveyancer or solicitor | The request has to be made by the buyer's legal team, which takes some time |
| Payment time | The provider should pay within 30 days of receiving the conveyancer's declaration | A late request can hold up exchange or completion |
| Completion window | Completion within 90 days of the conveyancer receiving the funds, then a 60-day and a final 30-day extension | After 180 days the money must go back, although the request can be made again |
Why could a Lifetime ISA slow my sale down?
The usual cause is timing at the front end. If the buyer's conveyancer only requests the money shortly before completion, the provider's payment time can push the date back. AJ Bell, one large provider, tells its customers to allow at least 10 working days for the money to arrive.
The back end has more slack than it looks. With both extensions, HMRC's conveyancer guidance allows 180 days from receipt of the funds. Rightmove reported on 31 July 2026 that the average move takes 154 days from sale agreed to completion, so most chains fit inside the window.
What's normal and what's a red flag?
| Normal | Worth a conversation |
|---|---|
| The buyer's conveyancer requests the funds once searches and the mortgage offer are in progress | Nobody on the buyer's side can say when the funds will be requested |
| The buyer holds a mortgage offer and a LISA for part of the deposit | The agreed price is above £450,000, or a renegotiation would take it there |
| A short extension is requested because the chain is slow | The buyer opened the ISA less than 12 months before the expected completion date |
| Both buyers use their own LISAs on a joint first-home purchase | One of the joint buyers has owned a home before |
What happens if my buyer pulls out after the money has been released?
If the purchase does not go ahead, HMRC's guidance says the conveyancer returns the money to the buyer's Lifetime ISA. Returned within the rules, it is not treated as a penalised withdrawal. That protects your buyer's savings, but it also means a LISA does not make the buyer more committed than any other buyer before exchange.
GOV.UK example: what the 25% withdrawal charge costs a saver who breaks the rules
| Step | Amount |
|---|---|
| Saver pays in | £800 |
| Government bonus at 25% | £200 |
| Pot | £1,000 |
| 25% withdrawal charge on the whole pot | £250 |
| Left for the saver | £750, which is £50 less than they paid in |
This is why a LISA buyer will resist any price above £450,000. For them it means losing the bonus and some of their own savings, so price talks near the cap need care.
What should I do if my buyer is using a Lifetime ISA?
1. Confirm the price is within the cap
Check that the agreed price is £450,000 or less, and that any renegotiation would keep it there.
2. Ask about the account's age
Ask your agent to confirm with the buyer that their first payment into the Lifetime ISA was more than 12 months before the expected completion date.
3. Ask when the funds will be requested
Ask your solicitor to find out from the buyer's conveyancer when the declaration will go to the ISA provider, and whether any of the exchange deposit depends on it.
4. Check the mortgage offer first
A LISA only works alongside a mortgage, so the buyer's formal mortgage offer is still the commitment that matters most.
5. Set a realistic completion date
Agree a date that leaves room for the provider's payment time rather than one that assumes the money arrives overnight.
6. Keep your own big moves in step
Hold irreversible spending, and the decision to come fully off the market, until the buyer's mortgage offer is issued.
A Lifetime ISA is a timing question, not a warning sign. Ask the right date early and it rarely becomes a problem.
Is the Lifetime ISA being replaced?
The government opened a consultation on 29 June 2026 on a new First Time Buyer ISA that would be offered in place of the Lifetime ISA. It says people can still open a LISA until the new account is available, and that existing LISA savings can be used alongside the new account for the same purchase.
The consultation says the property price cap will be confirmed at a future fiscal event. Until then, £450,000 is the figure that applies to your sale.
How do I keep control of the sale?
Treat a LISA buyer like any first-time buyer: often chain-free, often motivated, and bound by rules you can see in advance. Keep the price, the account age and the request date in view, and the rest follows the normal path.
Pricing correctly from the start also avoids a renegotiation near the cap. ValuQ gives UK homeowners free, side-by-side property valuations from competing local estate agents, so you can price on evidence and choose your agent on merit.
Can a buyer use a Lifetime ISA on a house over £450,000?
Not without penalty. The GOV.UK rules say the property must cost £450,000 or less. Taking the money out for a more expensive home counts as an unauthorised withdrawal and carries a 25% charge on the amount withdrawn.
How long does it take for Lifetime ISA money to reach the solicitor?
HMRC guidance gives the ISA provider up to 30 days after receiving the conveyancer's declaration. Providers often pay faster; AJ Bell tells its customers to allow at least 10 working days.
Can Lifetime ISA money be used for a cash purchase?
No. The GOV.UK rules require the buyer to be buying with a mortgage, so a buyer using a LISA will always have a lender involved.
What happens if completion takes longer than 90 days?
The buyer's conveyancer can ask for a 60-day extension and then a final 30-day extension while the purchase is still progressing. After 180 days the money goes back to the ISA, and it can be requested again to complete.
Is a buyer with a Lifetime ISA a good buyer to accept?
Often, yes. They are first-time buyers, so they have no property to sell. Judge them as you would any buyer, by their mortgage position and how quickly their solicitor moves.
Sources
- [1]GOV.UK, Lifetime ISA: withdrawing money and buying your first home · 2024-11-08 · https://www.gov.uk/lifetime-isa/withdrawing-money
- [2]HMRC, Lifetime ISA first time residential property purchase: conveyancer guidance · 2018-03-09 · https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/691773/conveyancer__1___5_.pdf
- [3]HM Treasury, First Time Buyer ISA: consultation · 2026-06-29 · https://www.gov.uk/government/consultations/first-time-buyer-isa-consultation/first-time-buyer-isa-consultation
- [4]AJ Bell, How do I use my Lifetime ISA to buy my first home? · 2026-09-17 · https://www.ajbell.co.uk/faq/how-do-i-use-my-lifetime-isa-buy-my-first-home
- [5]Property Industry Eye, Estate agents face longest wait on record to get paid (Rightmove) · 2026-07-31 · https://propertyindustryeye.com/estate-agents-face-longest-wait-on-record-to-get-paid/
Terms in this article
Plain-English definitions from the ValuQ property glossary.
First-time buyer
A first-time buyer is someone who has never owned a property, here or abroad.
Exchange deposit
The exchange deposit is the sum, traditionally 10% of the price, paid by the buyer at exchange as security for completing.
Completion date
The completion date is the contractual day the sale must complete, fixed at exchange and binding on both sides.
Mortgage offer
A mortgage offer is the lender's formal, binding commitment to lend, issued after full underwriting and valuation.
Renegotiation
Renegotiation is reopening the agreed price after the survey or searches reveal something the offer did not account for.
Sale agreed
Sale agreed means an offer has been accepted and the property is coming off active marketing while lawyers take over.
Cash buyer
A cash buyer can pay the full price without a mortgage.
Read next
Related insights
Rates are rising. Can my buyer's mortgage offer be pulled?
What are swap rates, and why do they push mortgage rates up?
House prices now falling in more than 1 in 4 areas of Britain
My buyer wants to wait until after the Budget. What should I do?
See every local agent on one screen.
Free for homeowners. Always. No cold calls. No data sales. No starting-line advantage for the fastest dialler in town.
Get your free anonymous valuationSellers and buyers never pay.