UK residents are being urged not to overlook a government-backed savings boost worth up to £1,000 a year, following the latest HMRC figures showing a slowdown in property transactions.
HMRC Figures Highlight Market Cooling
HMRC data revealed an estimated 98,450 residential property transactions in May, down 2% from April. Despite being 17% higher than the same month last year, experts note that the annual comparison is distorted by stamp duty changes in 2025. Sarah Coles, head of personal finance at AJ Bell, described the monthly drop as the second consecutive small decline, indicating a cooling market.
Lifetime ISA: A Golden Opportunity for Savers
Coles advised aspiring buyers to consider the Lifetime ISA (LISA), which offers a 25% government bonus on contributions up to £4,000 per year, equating to a maximum £1,000 annual boost. Eligible first-time buyers aged 18 to 39 can open a LISA and use the funds for a first home purchase or retirement. “If you're in this position, it's a golden opportunity to consider your savings,” Coles said. “Not only will building your savings potentially put you in a better position when you're buying, but having a robust safety net is essential.”
Market Outlook and Alternative Savings Options
While mortgage rates have fallen recently due to easing inflation concerns after the Middle East ceasefire, Coles warned of uncertainty. Falling mortgage approvals from the Bank of England and survey data from the Royal Institution of Chartered Surveyors indicate weakening buyer demand and agreed sales through spring. For those delaying purchases, she suggested high-paying savings accounts or investing through a Stocks and Shares ISA, or using a LISA to benefit from the 25% bonus.
Future of Lifetime ISA
The Lifetime ISA is set to be replaced by a new First Time Buyer ISA from 2028 under government plans announced last week. Currently, savers can contribute up to £4,000 per tax year and receive the bonus, provided the money is used for a first home or retirement. Coles emphasised that buyers in no rush can use this time to build a larger deposit and a financial safety net for moving costs.
