Help to Buy mostly helped high earners, IFS says

Help to Buy Mostly Benefited Higher Earners, IFS Study Reveals

A major analysis by the Institute for Fiscal Studies (IFS) has found that the government’s Help to Buy initiative in England primarily supported 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 savings by providing financial support for deposits and expanding mortgage options.

The IFS report highlights that the policy’s effect on social mobility was “limited,” despite its goal of making homeownership more accessible. It specifically examines the 2013 policies, which included a mortgage guarantee program and an equity loan scheme. The former enabled mortgages with as little as 5% deposits, while the latter offered a 20% government-backed loan for new build properties, reducing the required down payment.

However, the equity loan component has since closed to new applicants in England and Scotland, with Wales set to follow in September. Northern Ireland never had a similar program. The mortgage guarantee scheme, on the other hand, remains active across the UK. Other home-buying initiatives also operate in devolved regions, offering varying levels of support.

At its peak in 2014–15, nearly 20% of first-time buyer transactions in England were aided by the scheme. Yet, the IFS concluded that “Help to Buy made only a limited impact on housing affordability.” The study argues that the program’s focus on new builds, which are less common in most areas, meant it disproportionately benefited those who could already afford higher prices.

Those with higher incomes gained the most from the scheme, as the IFS noted that “the more a buyer earned, the greater the assistance they received.” This suggests that the program helped elevate property prices rather than making homes more affordable for lower-income individuals. Critics point out that the availability of loans encouraged spending, indirectly driving up costs.

“Help to Buy policies can help first-time buyers get on the housing ladder, in theory, but can also push up house prices,” stated Bee Boileau, a research economist at the IFS.

Defenders of the scheme, such as the Home Builders Federation, credit it with “significantly increasing housing supply,” which contributed to a surge in affordable homes through private sector subsidies. They also note the policy helped “many thousands of people achieve homeownership.” Meanwhile, a spokesperson for the Department of Housing, Communities and Local Government emphasized that the scheme’s evaluation is ongoing, with no immediate plans to reintroduce it. They highlighted the new mortgage guarantee program as a continuation of its goals, aiming to support young families and renters.