LISA with bridging loan

Hello, I am trying to understand if a bridging loan would satisfy the criteria for utilizing money saved in a LISA account towards a first-time home purchase.
I am purchasing at auction and the property has a short lease and absent freeholder. No mainstream lender is going to lend against this. I have a significant amount saved up in my LISA that I would like to use towards the purchase of this property. As per the wording on the official guidance for LISA one of the eligibility criteria for the purchase states that "the property is purchased with a loan taken as a charge over the property (i.e. mortgage); ".
I have read through the conveyancer's guidance on LISAs and it is still unclear to me. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/691773/conveyancer__1___5_.pdf

Hi 
The guidance advises "Investors can make charge-free withdrawals from a Lifetime ISA if the funds are going towards the purchase price of their first residential property in the UK. This includes when the investor makes the purchase:
- on their own
- with another first time buyer
- with an individual who is not a first time buyer”
Please see guidance at: Lifetime ISA withdrawals for a first time residential purchase  
Thank you

Hi, Thanks for the reply but this isn't helpful. I'm specifically asking regarding the eligibility criteria. Based on the wording of the provided guidance a cash only purchase would not qualify. A mortgage can be one of several things. A traditional mortgage provided by a mainstream lender. A bridging loan or a personal loan or a personal mortgage if all of those use the property as a security. Would any of the options other than the mainstream lender loan meet the eligibility criteria for using the funds from the LISA towards the purchase? Thanks, A

Hi,
The guidance clearly states that the property must be purchased with a mortgage in order to qualify.
Other types of loan/finance are not allowed.
Thank you.

Hi, Thanks for your response. To the best of my ability and understanding a mortgage is any type of loan secured via placing a legal charge over the registered estate. When issuing a bridging loan, form CH1 is filled and submitted which charges the property by way of legal mortgage as security for the payment of the sums (regardless of the type of finance!). The same process would be followed for a personal loan that leverages the property as a security and a personal mortgage that does the same. The amendements that took effect recently (not adveetised in any guidance anywhere!) seem to further support this point, at least with regards to personal mortgage as the last amendment here https://www.legislation.gov.uk/uksi/2024/350/note/made stipulates that a personal mortgage if provided by a connected person is not a valid satisfying criterion for using the LISA. It would be helpful if someone would step up to provide clear guidance on this. I've called HMRC that redirected me to the Financial Ombudsman (who of course are not responsible for the interpretation of this) who directed me to Citizens Advice, who directed me back to HMRC. My LISA provided was also unable to help and pointed me to HMRC. Is your reply your personal interpretation or a legally binding interpretation of the regulations? If the latter would it be possible to point me to the legal definition of a mortgage as defined or understood by HMRC to understand what the criteria are? Many thanks, Achilleas

Hi,
We can only point you in the direction of the guidance (Lifetime ISA) in this forum, so that you can review it and make an informed decision.
We cannot provide you with a legal definition, only point you to the legislation, which you already have.  
A legal difinition would need to be provided by a profession such as a lawyer/solicitor etc.
Thank you.

Achilleas Athanasiou Fragkoulis I am interested to know whether you ever got a definite answer to your question?