Help to Buy mostly helped high earners, IFS says
Help to Buy Mostly Benefited Higher Earners, IFS Analysis Reveals
A government initiative designed to assist first-time homebuyers in England primarily supported individuals with higher incomes, according to a report by the Institute for Fiscal Studies (IFS). The scheme, launched in 2013 under the Conservative administration, was initially intended to ease financial barriers for buyers unable to rely on family or friends for deposits. However, the IFS found that its effects on housing affordability were minimal, particularly for lower-income groups.
The report highlights that the Help to Buy program included two main components: a mortgage guarantee scheme and an equity loan scheme. The former allowed access to mortgages with as little as 5% down payment, while the latter offered a 20% government-backed loan for new-build properties. This structure meant that buyers needed to contribute less of their own funds, but it also restricted the scheme’s reach to newer housing developments.
Regional Disparities in Scheme Impact
Despite its peak usage in 2014–15, when around one-fifth of first-time purchases in England were supported, the IFS argues that the program had limited influence on social mobility. Its focus on new-build properties, which are uncommon in most regions, meant that affordability improvements were largely confined to areas with lower home prices. As a result, those with higher earnings gained the most benefit from the scheme.
“Help to Buy policies can help first-time buyers get on the housing ladder, in theory, but can also push up house prices,” noted Bee Boileau, a research economist at the IFS. This critique aligns with concerns that the scheme inflated property costs by enabling more spending power among buyers. Critics argue that the program did not significantly reduce affordability for many, as it favored those already in a position to afford higher prices.
Regional Variations and Ongoing Reforms
Help to Buy equity loan schemes have now closed to new applicants in England and Scotland, with the Welsh version set to expire in September. Northern Ireland never adopted a similar equity loan model. In contrast, the mortgage guarantee component remains active across the entire UK. Other home-buying support programs exist in devolved nations, but the IFS’s findings suggest the original scheme’s effectiveness was constrained.
Supporters of the policy, such as the Home Builders Federation, contend that it played a key role in doubling housing supply within a few years of its launch. This expansion, they claim, created job opportunities and stimulated the production of affordable housing through cross-subsidy mechanisms. Shadow housing secretary James Cleverly also praised the initiative, stating it provided thousands with the chance to achieve homeownership.
A spokesperson for the Department of Housing, Communities and Local Government reiterated that the previous administration both introduced and discontinued the scheme. While no new Help to Buy program is planned, the department has launched a broader mortgage guarantee scheme aimed at helping young families and renters secure homes. The ongoing evaluation of the original initiative continues to shape discussions about its legacy and future potential.
