Buying A House: Using Skipton’s Lifetime ISA (LISA)
Since the launch of the Lifetime ISA over a year ago, I have championed how great they are for first time buyers and have told anyone who will listen that it’s one the best ways to save for a deposit for their first home.
We opened our Lifetime ISA with the Skipton in June 2017, basically as soon as it became available. Before that we were saving in a Halifax Help to Buy ISA which was giving us around 4% interest. There were a few key differences which made us decide to switch from using a Help to Buy ISA to a Lifetime ISA which were:
- You could only put £200 a month into a Help to Buy ISA, whereas a Lifetime ISA you could put up to £4000 in it at any time.
- The bonus on a Lifetime ISA was paid into the account after the first year of it being open and monthly after that, meaning you could earn interest on the bonus. The Help to Buy’s ISA only paid the bonus when it was withdrawn by a conveyancer.
- The Lifetime ISA can continue to be used to save for retirement after using some of the funds for a deposit whereas a Help to Buy ISA was only for purchasing a home.
When we opened the LISAs we decided not to transfer the funds straight away as the Skipton were paying less than 1% interest and instead ‘got the clock ticking’ on it being open for a year. One of the rules is the LISA must be open for one year before your conveyancer withdraws it. Just before the end of the financial year we transferred our Help to Buy funds meaning we were eligible to receive the bonus and all the money was there ready for the purchase of our first home.
We found our dream home at the end of April and put in an offer at the beginning of May. By mid May we had found a conveyancer and by mid June he had completed our searches and was ready to receive our deposit. Skipton claim it can take up to 30 days for the funds to be transferred from the LISA to your conveyancer but we found this to be a lot quicker and I believe you can get it even quicker if you press Skipton and are on the ball with it.
We didn’t realise at first that you need to send off two documents to the Skipton to request the funds which delayed things by a few days as it was a Friday when our conveyancer said he was ready for our funds, Monday before I sent off the documentation, and then due to me missing the Special Delivery cut off, Wednesday before he received it. It was then a further day before he sent it meaning get Skipton probably didn’t get the paperwork until over a week after our conveyancer first asked for us to transfer the deposit. Two key things to remember:
Lifetime ISAs are new and many conveyancers are unsure of what to do themselves, so familiarise yourself with what you need to do beforehand.
Get the paperwork filled in and ready WAY before you get to the deposit request stage so your conveyancer can simply send it off when he is ready (bearing in mind also the 30 days)
The two pieces of documentation you need filling out are located on Skipton’s website. One is a form you fill in to let them know your details (Investor Declaration) and how much you want to withdraw, and one is your conveyancer’s document with their bank details on and details of their firm. (Conveyancer Declaration) After around a week, I rang Skipton to chase and they could see that they’d received the forms, but without me having a completion date, there was not much that could be done. Imagine my surprise when I was contacted via email by one of their contact centre employees only a few days later.
It was a Saturday morning when I got the email which hugely surprised me as I thought there’s things would only happen Monday- Friday. I was sent a document confirming that I wanted to withdraw the sum from my LISA and asking me to use Adobe reader to sign it. Once signed, it saved automatically and was emailed to myself, Skipton and the conveyancer as confirmation that I authorised transfer of the funds and a date popped up for an agreed transfer date which was two days later. They informed me that although this was the agreed transfer date, it could take two further working days to show in the conveyancer’s account.
I was really impressed by this as I was assuming it would be another form in the post, followed by me having to post it back, adding more days onto an already long winded process. On the Monday I rang the conveyancer several times to find out if the funds were showing, but there was nothing. I remembered about the two days and gave it until Tuesday afternoon and when they still weren’t showing, I checked my online account and saw that the balance was still intact. I rang Skipton immediately who kept me on hold for quite some time before coming back, apologising and transferring the funds there and then. I actually received an automated email while I was still on the phone saying the funds had left my account, something I didn’t even know existed before this point and would have been looking out for if I’d had known. Two key learning points:
Don’t assume that because they agreed to move the money on a certain date, that they will. Continuously chase. I lost two days by giving them the benefit of the doubt.
You will receive an email as soon as the money is moved. It’s an automated email telling you a withdrawal has been made. This will give you the knowledge the money has actually been moved.
By the Wednesday, the conveyancer had my funds. It was 20 days after he had first asked me about them which is good considering Skipton do say ‘up to 30 days’, however I reckon we could have knocked another 7 days off that at least.
I’ve written our time line below to give you an idea of what to expect, but also how you can make changes to get your money to your solicitor even quicker:
9th May: Put in an offer
11th May: Found conveyancer, starts searches
20th June: Searches comes back.
29th June: Conveyancer emails me requesting deposit funds
4th July: Conveyancer receives paperwork from us
6th July: Skipton receive completed paperwork
14th July: Email received from Skipton asking to confirm transfer of funds
16th July: Date money to be transferred
17th July: Phone call to Skipton to find out why funds are still showing in MY account at 4pm
18th July: Conveyancer confirms funds are showing in his account
Hope this helps with your house buying process. If you have any further questions don’t hesitate to message me and I will help if I can!