Help to Buy mostly helped high earners, IFS says

Help to Buy Mostly Helped High Earners, IFS Says

A new analysis by the Institute for Fiscal Studies (IFS) reveals that the government’s Help to Buy initiative in England primarily benefited individuals with higher incomes, particularly in regions where property prices are lower. The report criticizes the scheme for having a limited effect on social mobility, despite its original goal of aiding first-time buyers unable to secure funds from family or friends.

Introduced in 2013 by the Conservative government, Help to Buy aimed to expand mortgage access by offering financial support for deposits. It included two key components: a mortgage guarantee scheme that allowed borrowing with as little as 5% down, and an equity loan program providing a 20% government-backed loan for new properties. The equity loan component, however, has since been halted for new applicants in England and Scotland, with Wales set to end its version in September.

“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.

While the scheme’s peak in 2014–15 saw about a fifth of first-time buyer transactions supported, the IFS argues it failed to significantly improve affordability. The study highlights that the program’s focus on new builds, which are uncommon in many areas, meant its benefits were concentrated among those who could already afford higher prices. Higher-income participants, according to the report, gained the most from the initiative.

The mortgage guarantee scheme has been made permanent across the UK, but critics note that the equity loan component was less effective in high-cost regions like London and the South East, where fewer homes were available under the program. This limited availability, the IFS suggests, meant the scheme disproportionately supported buyers in cheaper areas.

Defenders of Help to Buy argue that it played a crucial role in increasing housing supply, with the Home Builders Federation citing a doubling of home availability in the years after its launch. This expansion, they claim, created tens of thousands of jobs and spurred the growth of affordable housing through private sector subsidies. Shadow housing secretary James Cleverly also praised the policy, stating it “gave many thousands of people the chance to realise the dream of homeownership.”

A spokesperson for the Department of Housing, Communities and Local Government acknowledged that the previous administration both introduced and phased out the scheme, while noting an ongoing evaluation. “While we have no current plans to reintroduce Help to Buy, we have launched a comprehensive mortgage guarantee scheme to support more young families and renters,” the statement added.