Help to Buy mostly helped high earners, IFS says
Help to Buy Mostly Helped High Earners, IFS Says
Government Initiative’s Limited Reach
A prominent think tank has revealed that the Help to Buy program, designed to assist first-time home buyers in England, primarily benefited individuals with higher incomes, particularly in regions where property prices are more affordable. According to the Institute for Fiscal Studies (IFS), the scheme’s influence on social mobility was minimal, as outlined in its recent analysis.
Program Structure and Scope
Introduced in 2013 by the Conservative government, the Help to Buy initiative aimed to support buyers lacking financial assistance from friends or family. It combined two key components: a mortgage guarantee program that enabled access to mortgages with just 5% deposits and an equity loan scheme offering a 20% government-backed loan for new-build properties. The equity loan component has since ended for new applicants in England and Scotland, with Wales set to follow in September. Northern Ireland never had a similar equity loan program.
Regional Disparities and Affordability
Despite its peak in 2014–15, when about 20% of first-time buyer purchases in England were supported, the IFS found the scheme only modestly improved housing affordability. The report highlighted that its focus on new builds—scarce in many regions—meant higher-income individuals reaped the greatest benefits. As a result, it increased the maximum prices affordable for those already capable of paying more.
“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.
While critics argue the scheme inflated property costs, supporters claim it facilitated homeownership for thousands and spurred housing construction. The Home Builders Federation noted the program contributed to a significant rise in housing supply, generating tens of thousands of jobs and boosting affordable housing availability through private sector subsidies. Shadow housing secretary James Cleverly emphasized that the policy enabled “many thousands of people” to achieve homeownership.
A spokesperson for the Department of Housing, Communities and Local Government stated that the scheme was both launched and phased out by the prior administration, with an ongoing assessment. They added that although no new Help to Buy program is planned, a broader mortgage guarantee scheme is now in place to aid young families and renters in securing homes.