A report from the Institute for Fiscal Studies has found that the UK Government’s Help to Buy scheme largely benefited higher earners, particularly in areas where property prices are lower.
Introduced in England in 2013, the scheme aimed to support first-time buyers who lacked financial help from family or friends. It did this through two main policies: a mortgage guarantee scheme that enabled buyers to secure mortgages with a 5% deposit, and an equity loan scheme that offered a Government-backed loan of up to 20% on new-build homes.
At its peak in 2014/15, Help to Buy supported around one in five first-time buyer purchases in England. However, the IFS concluded that it made only a limited difference to overall housing affordability and had minimal impact on social mobility.
One key issue identified was that the scheme applied only to new-build homes, which are relatively scarce in many regions. This limited its reach, particularly in high-cost areas such as London and the South East. As a result, buyers in cheaper regions, often with higher incomes, were more likely to benefit.
The report also found that income-based mortgage lending limits meant many participants were already close to their borrowing capacity. In some cases, buyers still relied on last-minute financial support from family, reducing the scheme’s effectiveness.
Critics argue that Help to Buy contributed to rising house prices by increasing purchasing power. Supporters, including Shadow housing secretary, James Cleverly, maintain it helped thousands onto the property ladder and supported housebuilding.
The equity loan scheme is now closed to new applicants in England and Scotland, with Wales due to follow. The mortgage guarantee scheme remains in place across the UK.
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