Help to Buy Mostly Benefited Higher Earners, IFS Study Reveals

A new report by the Institute for Fiscal Studies (IFS) indicates that the government’s Help to Buy initiative in England primarily supported individuals with higher incomes, particularly in regions where property prices are lower. The policy, launched in 2013 by the Conservative administration, was designed to assist first-time buyers lacking financial backing from friends or family. However, the analysis suggests it had minimal influence on improving social mobility.

The scheme combined two components: a mortgage guarantee program and an equity loan program. The mortgage guarantee allowed loans with just 5% deposits, while the equity loan provided a 20% government-backed contribution for new-build homes, reducing the buyer’s required down payment. Although the equity loan component has been discontinued in England and Scotland, the Welsh version will cease in September. Northern Ireland never adopted a similar equity loan policy.

Despite the program’s peak in 2014–15, where nearly a fifth of first-time purchases were supported, the IFS found that it only marginally improved housing affordability. The report highlights that the scheme’s focus on new builds, which are less common in many areas, limited its reach. Furthermore, higher earners derived the most benefit, as the program increased the maximum prices affordable to those who could already afford more.

Regional Disparities in Scheme Impact

Higher-income individuals in less expensive regions gained the most from Help to Buy, according to the IFS. In contrast, buyers in London and the South East faced fewer opportunities, as homes in these areas were pricier and fewer were available under the scheme. The policy’s design, which prioritized new builds, meant it had limited effect on affordability for those relying on informal financial support.

“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.

Defenders argue the scheme significantly boosted homeownership and housing supply. The Home Builders Federation claimed it played a key role in doubling housing availability within a few years, generating jobs and expanding affordable housing options through private sector subsidies. James Cleverly, the shadow housing secretary, praised the policy for enabling thousands to achieve homeownership.

A spokesperson for the Department of Housing, Communities and Local Government noted that Help to Buy was both introduced and phased out by the previous administration. They emphasized an ongoing evaluation of the scheme and highlighted a new mortgage guarantee program aimed at supporting young families and renters. “While we have no current plans to restart Help to Buy, the updated support opens pathways for more people to own homes,” the statement added.