Martin Lewis warns UK households over buying houses in this price bracket

Speaking on Five Live, and BBC Sounds, Mr Lewis explained the pitfalls of a Lisa

Martin Lewis has warned people buying £450,000 houses they risk being penalised by the government - if they withdraw from a Lifetime ISA to help fund the purchase. BBC Sounds and ITV star Mr Lewis spoke out on his latest podcast episode with Adrian Chiles.

Speaking on Five Live, and BBC Sounds, Mr Lewis explained the pitfalls of a Lisa and said: "You can take the money out only for one of two reasons: number one, you are buying a first time property, you've never bought a property before, you've never owned a property before and that property has to be worth under £450,000.

"The second reason is you've hit age 60 and then you can take the money out and you get to keep the bonus." He added: "No one who has opened the ISA has hit age 60 yet because they haven't been around long enough. It's a savings account.

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"It's just a tax-free savings account, but the real key to it is the 25% state bonus. The problem with a lifetime ISA...the big one is if you take your money out for any other reason than to buy a first time qualifying property or at retirement effectively when you're age 60, you take a 25% penalty."

One prospective buyer emailed in to say: "I live in London and only apartments are affordable at the £450K cap. A decent apartment (e.g. energy-efficient, quiet neighbourhood) hovers around £450K. My concern is that when interest rates decrease (and prices increase), buying an apartment in London will be infeasible."

"House price in my area was capped at 250k, relatively useless. Seems like it's London and Everywhere else just like most things... Doesn't meet it's intended purpose," a second agreed as he replied to the Money Saving Expert founder.

And another typed: "Probably would have done had I not been as old as I am -59. But it does need some fixing re the cap."