Help to Buy Mostly Benefited Higher Earners, IFS Finds

A recent analysis by the Institute for Fiscal Studies (IFS) suggests that the UK government’s Help to Buy initiative, launched in 2013, primarily supported individuals with higher incomes, particularly in regions where property prices were more affordable. The report highlights that the scheme had a “limited impact” on improving social mobility, despite its original aim to assist first-time buyers lacking financial support from friends or family.

The policy combined two main elements: a mortgage guarantee scheme and an equity loan program. The former enabled borrowers to secure mortgages with as little as a 5% deposit, while the latter offered a 20% government-backed loan for new-build properties. This reduced the upfront cost for buyers, but the IFS argues the program did not significantly enhance affordability for the broader population.

“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, which were released amid discussions about reviving the loan scheme, reveal that the program’s benefits were skewed toward those with greater financial means. Its research indicates that higher-income individuals saw the most substantial gains, as the scheme effectively raised the maximum prices people could afford—particularly for those already in a position to handle more expensive homes.

Meanwhile, the mortgage guarantee scheme has been extended nationwide, while the equity loan component is no longer open to new applicants in England and Scotland. The Welsh version will cease in September, and Northern Ireland has never had a similar equity loan scheme. Despite this, the IFS notes that the program’s focus on new builds, which are “relatively rare in most areas,” limited its reach in more expensive regions like London and the South East.

Defenders of the initiative argue that it played a key role in doubling the housing supply within a short period, generating jobs and boosting the availability of affordable homes through private sector partnerships. “The scheme gave many thousands of people the chance to realise the dream of homeownership,” stated James Cleverly, the shadow housing secretary.

A spokesperson for the Department of Housing, Communities and Local Government acknowledged that the previous administration both introduced and discontinued the program, with 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.