Help to Buy mostly helped high earners, IFS says

Help to Buy Mostly Benefited High Earners, IFS Finds

A 2013 government initiative in England, designed to aid first-time homebuyers, primarily supported higher-income individuals, according to a report by the Institute for Fiscal Studies (IFS). The study highlights that the scheme’s impact on social mobility was limited, despite its original goal of expanding access to homeownership for those without family financial support.

The IFS analysis focuses on the policies launched in 2013, which included a mortgage guarantee program and an equity loan scheme. The mortgage guarantee allowed lenders to offer mortgages with as little as 5% deposits, while the equity loan provided a government-backed 20% contribution for new build properties, reducing the buyer’s required down payment. However, these schemes are no longer open to new applicants in England and Scotland, with the Welsh version set to close in September.

Despite the scheme’s peak in 2014–15, where it supported around a fifth of first-time buyer transactions, the IFS argues it had a minimal effect on housing affordability. The think tank notes that the equity loan’s focus on new builds, which are less common in most regions, meant it primarily assisted those already in a position to afford higher prices. Critics claim the program increased demand, indirectly raising house prices.

“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.

Supporters of the scheme, such as the Home Builders Federation, emphasize its role in boosting housing supply. They credit it with contributing to a significant rise in home availability, which created thousands of jobs and spurred the growth of affordable housing through private sector subsidies. Shadow housing secretary James Cleverly added that the policy enabled “many thousands of people to realize the dream of homeownership.”

Meanwhile, the government’s Department of Housing, Communities and Local Government stated that the scheme was introduced and phased out by the previous administration. A spokesperson noted that while a new version is not planned, a broader mortgage guarantee program has been launched to support “more young families and hardworking renters.” The ongoing evaluation of Help to Buy underscores its mixed legacy across the UK’s devolved nations.