Right now self-builders can use their Lifetime ISA (LISA) for land purchase if they have a mortgage. We believe this punishes those who can buy a cheaper land outright, but still need a mortgage for the build itself.
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Allowing self-builders use their LISA for building costs might help people financing their self-builds, which would be helpful in the housing crisis, especially in places with lower land prices.
A LISA can be used for both the building and land when buying an already built house, so it should be the same for self-builds too.