Help to Buy mostly helped high earners, IFS says
Help to Buy Scheme’s Impact on Affordability and Social Mobility
The Institute for Fiscal Studies (IFS) has found that the UK’s 2013-launched Help to Buy initiative primarily benefited individuals with higher incomes in regions with lower property prices. The report highlights that the policy had a “limited effect” on improving housing affordability for lower-income buyers, despite its widespread use in supporting first-time homeowners.
Policy Overview and Regional Variations
Introduced by the Conservative government in 2013, the Help to Buy program included two main components: a mortgage guarantee scheme and an equity loan scheme. The former allowed mortgages with as little as 5% deposits, while the latter offered a government-backed 20% loan for new build properties. These measures aimed to reduce the financial burden on buyers, particularly those without family support.
However, the equity loan schemes have since been phased out in England and Scotland, with the Welsh program closing in September. Northern Ireland remains without a similar initiative. The mortgage guarantee scheme, on the other hand, has been extended nationwide, continuing to shape homeownership opportunities across the UK.
Analysis of Affordability and Social Mobility
The IFS report notes that while Help to Buy helped many access the housing market, its benefits were uneven. It found that higher earners in cheaper areas gained the most from the scheme, as it boosted maximum affordable prices for those already in a position to pay more. This suggests the policy may have reinforced existing disparities rather than addressing them.
During its peak in 2014–15, around 20% of first-time buyer transactions in England were supported by the program. Yet, the report argues that this had minimal impact on housing affordability. Critics emphasize that the scheme’s focus on new builds, which are “relatively rare in most areas,” limited its reach for broader social mobility goals.
Supporting Arguments and Continued Use
Defenders of the policy highlight its role in increasing housing supply. The Home Builders Federation claims it contributed to a doubling of home availability in the years following its launch, generating jobs and fostering affordable housing through private sector incentives. Shadow housing secretary James Cleverly also credits the scheme for enabling thousands to achieve homeownership.
A spokesperson for the Department of Housing, Communities and Local Government stated that Help to Buy was both introduced and ended by the previous administration, with an ongoing assessment of its effectiveness. They noted that while no new scheme is planned, a broader mortgage guarantee program now targets young families and renters, aiming to expand access to homeownership.
“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.
