Help to Buy mostly helped high earners, IFS says
Help to Buy Scheme Benefited Higher Earners, IFS Study Reveals
Key Findings on Housing Affordability
The Institute for Fiscal Studies (IFS) has highlighted that the Help to Buy initiative, launched in England in 2013 by the Conservative administration, disproportionately aided individuals with higher incomes, particularly in regions where housing costs are lower. The report underscores that the program had a minimal effect on improving social mobility through homeownership.
Designed to assist first-time buyers lacking financial support from family or friends, the scheme combined two components: a mortgage guarantee program and an equity loan. The equity loan provided a government-backed 20% deposit for new build properties, easing the financial burden on buyers. However, this part of the program is no longer available for new applicants in England and Scotland, with Wales set to phase it out by September. Northern Ireland has not seen a comparable initiative.
Despite its peak in 2014–15, during which roughly one-fifth of first-time purchases in England were supported, the IFS argues that the scheme failed to meaningfully enhance affordability for many. It notes that new builds, which were the focus of the equity loan, were uncommon in most areas, limiting its reach. As a result, higher-income participants derived the most benefit, with the program effectively increasing the prices they could afford.
Debates Over Economic Impact
While critics claim the scheme drove up property prices by enabling more spending, supporters emphasize its role in expanding housing availability. The Home Builders Federation highlighted that the program contributed to a significant rise in housing supply, generating tens of thousands of jobs and boosting affordable housing through private sector partnerships.
“Help to Buy policies can help first-time buyers get on the housing ladder, in theory, but can also push up house prices,” remarked Bee Boileau, an IFS research economist.
James Cleverly, the shadow housing secretary, defended the policy as a catalyst for enabling homeownership for thousands. A spokesperson for the Department of Housing, Communities and Local Government noted that the scheme was both introduced and discontinued by the prior administration, with an ongoing evaluation. They also mentioned the launch of a new mortgage guarantee scheme, aimed at supporting young families and renters.
Regional Disparities and Scheme Evolution
The IFS research was prompted by calls to revive the loan scheme, revealing that its design, focused on new builds, left many struggling with affordability due to income-based mortgage limits. Participants often relied on last-minute help from friends or family, which the scheme did not sufficiently address. Meanwhile, the mortgage guarantee aspect has been extended to the entire UK, ensuring continued support for broader housing access.
