Help to Buy mostly helped high earners, IFS says
Help to Buy Mostly Helped High Earners, IFS Says
Analysis of Housing Policy Impact
A major think tank has revealed that the government’s loan initiative for first-time home buyers in England primarily benefited individuals with higher incomes in regions where property prices are lower. The scheme, introduced in 2013 by the Conservative government, was designed to assist those unable to secure financial support from friends or family, offering deposits and expanding mortgage lending options.
The Institute for Fiscal Studies (IFS) report emphasizes that the program had “limited impact” on social mobility. While critics argue it increased house prices by enabling more spending, defenders claim it helped many access homeownership and spurred housebuilding. The IFS study specifically examines the 2013 policies, which included a mortgage guarantee scheme and an equity loan program.
The mortgage guarantee scheme allowed mortgages with as little as 5% deposits, while the equity loan offered a 20% government-backed loan for new-build properties. These equity loan schemes are now closed to new applicants in England and Scotland, with Wales set to end its version in September. Northern Ireland never had a similar program.
Despite its peak in 2014–15, when roughly a fifth of first-time buyer transactions were supported, the IFS concluded that the scheme only marginally improved housing affordability. The report highlights that higher-income individuals gained the most, as new-build properties were “relatively rare in most areas,” enabling those with greater financial capacity to benefit 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 IFS.
The mortgage guarantee scheme has since been extended across the entire UK, while other regional home-buying programs operate in devolved countries. The IFS’s research was conducted amid calls for the scheme’s revival and echoes earlier critiques from the government’s official watchdog.
Supporters of the program argue it doubled housing supply in the years following its launch, creating jobs and boosting affordable housing through private sector subsidies. Shadow housing secretary James Cleverly noted that the Conservative policy “gave many thousands of people the chance to realise the dream of homeownership.”
A spokesperson for the Department of Housing, Communities and Local Government stated that Help to Buy was both introduced and closed by the previous administration, with an ongoing evaluation of its effectiveness. “While we have no current plans to reintroduce a new scheme, we have launched a comprehensive mortgage guarantee program aimed at supporting more young families and hardworking renters,” the spokesperson added.
