Help to Buy Mostly Benefited High Earners, IFS Finds
Analysis Reveals Limited Impact on Social Mobility
A government initiative designed to assist first-time home buyers in England, the Help to Buy program primarily supported individuals with higher incomes in areas with lower property prices, according to a report by the Institute for Fiscal Studies (IFS). The scheme, launched in 2013 under the Conservative administration, was intended to bridge financial gaps for those without family or friends to fund deposits, while expanding access to mortgages. However, the IFS argues that its effect on social mobility has been minimal.
Help to Buy operated through two components: a mortgage guarantee program and an equity loan scheme. The former allowed mortgages with just 5% deposits, while the latter offered a 20% government-backed loan for new build properties, reducing the required down payment. Despite its success in helping thousands purchase homes, the IFS report suggests the policy did little to improve affordability for broader demographics. It noted that the scheme’s focus on new builds, which are uncommon in most regions, meant its benefits were concentrated in areas with less demand.
By 2014–15, nearly a fifth of first-time buyer transactions in England were supported by the program. Yet, the IFS found that the scheme’s impact on housing affordability was limited, as it primarily aided those who could already afford higher prices. “The program increased maximum affordable prices most among those who could already afford higher prices,” the report stated. This effect was amplified because many buyers relied on informal support from family at the last minute, which the scheme did not address.
“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 IFS’s findings align with past criticisms from the government’s official watchdog, which called attention to the scheme’s shortcomings. While some argue that Help to Buy spurred a housing boom and created thousands of jobs, others highlight its limited reach in regions like London and the South East, where fewer properties were available under the program. As a result, higher earners in cheaper areas saw the most benefit.
Defenders of the policy, including the Home Builders Federation, claim it played a crucial role in doubling housing supply within a few years of its launch. They also note its contribution to affordable housing through private sector cross-subsidy. Shadow housing secretary James Cleverly emphasized that the scheme “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 introduced and phased out by the previous administration, with an ongoing evaluation. They added that while no new scheme is planned, a comprehensive mortgage guarantee program is now in place to support more young families and renters.
