Help to Buy mostly helped high earners, IFS says
Help to Buy Mostly Helped High Earners, IFS Says
Report Highlights Uneven Impact on Housing Affordability
A government initiative in England aimed at supporting first-time homebuyers primarily benefited higher-income individuals, according to a report by the Institute for Fiscal Studies (IFS). The study found that the Help to Buy scheme, launched in 2013 by the Conservative administration, had a limited effect on social mobility and only marginally improved housing affordability for participants.
Policy Design and Regional Variations
The scheme was designed to assist buyers without family or friend financial support by offering partial deposit funding and expanding mortgage access. However, the IFS noted that its focus on new-build properties, which are less common in most regions, meant its advantages were concentrated in areas with lower property prices. Meanwhile, equity loan programs in England and Scotland have closed to new applicants, with the Welsh version set to end in September. Northern Ireland never adopted a similar policy.
Critics vs. Defenders
While supporters argue the scheme enabled many to enter the property market and spurred construction, critics claim it drove up house prices by allowing increased spending. The IFS report, conducted amid calls to revive the program, echoed earlier concerns from the government’s official watchdog. It emphasized that the scheme’s impact was minimal in regions like London and the Southeast, where housing costs are higher and fewer properties were available under the program.
Despite its peak in 2014–15, when about one-fifth of first-time buyer transactions in England were supported, the IFS concluded that the program did not significantly enhance affordability for many. Instead, it disproportionately aided those who could already afford more expensive homes, as higher earners reaped greater benefits from the scheme’s structure.
“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.
The Home Builders Federation defended the scheme, stating it was a major factor in doubling housing supply during its early years and creating tens of thousands of jobs. Shadow housing secretary James Cleverly added that the policy “gave many thousands of people the chance to realize the dream of homeownership.”
A spokesperson for the Department of Housing, Communities and Local Government mentioned that Help to Buy was introduced and phased out by the previous government, with an ongoing evaluation. “Although we currently have no plans to reinstate the scheme, we’ve launched a broader mortgage guarantee program targeting more young families and working renters,” the spokesperson added.
