Help to Buy mostly helped high earners, IFS says
Help to Buy Mostly Benefited Higher Earners, IFS Study Reveals
Analysis of Government Housing Support Scheme Sparks Debate
A report by the Institute for Fiscal Studies (IFS) indicates that the Help to Buy initiative in England primarily aided individuals with higher incomes, particularly in regions where property prices are lower. The scheme, launched in 2013 under the Conservative administration, was designed to assist first-time buyers lacking access to personal funds, yet its impact on social mobility has been described as minimal.
Structure and Regional Variations
The policy combined two key components: a mortgage guarantee program and an equity loan mechanism. The former allowed mortgages with as little as 5% deposits, while the latter provided a 20% government-backed loan for new-build properties. However, equity loan programs are no longer open to new applicants in England and Scotland, with Wales set to phase them out by September. Northern Ireland has never had a similar scheme.
The mortgage guarantee scheme, on the other hand, has been extended to all UK regions. Alongside this, each devolved nation maintains its own home-buying programs and support measures. Despite its popularity, the IFS found that the scheme’s influence on housing affordability was limited, even at its peak in 2014–15, when it supported around a fifth of first-time buyer purchases in England.
“Help to Buy policies can help first-time buyers get on the housing ladder, in theory, but can also push up house prices,” said Bee Boileau, a research economist at the IFS. The study highlights that the scheme disproportionately benefited higher earners, as its effects amplified maximum affordable prices for those already capable of paying more.
Critics and Supporters Weigh In
While critics argue the scheme inflated property costs by enabling increased spending, supporters claim it enabled more people to enter the housing market and spurred construction growth. The Home Builders Federation emphasized that the program contributed to a significant rise in housing supply, creating tens of thousands of jobs and boosting affordable housing through private sector subsidies.
“The scheme was a major factor in the doubling of housing supply that occurred in the few years following its introduction, creating tens of thousands of jobs and leading to a boom in the supply of affordable housing provided through private sector cross-subsidy,” the Home Builders Federation stated.
Shadow housing secretary James Cleverly noted that the policy provided “many thousands of people the chance to realise the dream of homeownership.” A spokesperson for the Department of Housing, Communities and Local Government confirmed the scheme was introduced and discontinued by the prior government, with an ongoing evaluation. They added that “no current plans exist to launch a new Help to Buy initiative,” though a broader mortgage guarantee scheme aims to support young families and renters.