Help to Buy Scheme’s Impact on Social Mobility
A prominent think tank has found that the government’s Help to Buy initiative in England primarily benefited individuals with higher incomes, particularly in regions where property prices are lower. The report from the Institute for Fiscal Studies (IFS) highlights that the program’s effect on social mobility was limited, despite its original aim to assist first-time buyers lacking access to personal savings or financial support from family.
Structure of the Scheme
Launched in 2013 by the Conservative government, the Help to Buy program included two key components. The mortgage guarantee scheme allowed borrowers to secure mortgages with just a 5% deposit, while the equity loan scheme provided a 20% government-backed loan for new property developments. These measures were designed to reduce the upfront costs of homeownership and make housing more accessible.
Regional Variations and Scheme Status
Help to Buy equity loan programs are no longer open to new applicants in England and Scotland, with the Welsh scheme set to terminate in September. Northern Ireland has never had a comparable initiative. However, the mortgage guarantee scheme has been extended to the entire UK, offering continued support for homebuyers.
Report Findings
The IFS analysis revealed that the scheme’s influence on housing affordability was constrained. Even at its peak in 2014–15, when around one-fifth of first-time buyer transactions were supported, it only modestly improved access to homeownership. The study noted that higher earners saw the most significant benefits, as the scheme primarily targeted new build properties, which are less common in many areas.
Defenders’ Arguments
Advocates of the program argue that it played a crucial role in expanding housing supply and reducing barriers to entry. “Help to Buy was a major catalyst in doubling housing availability within a short period, generating tens of thousands of jobs and fostering affordable housing through private sector initiatives,” stated the Home Builders Federation. Shadow housing secretary James Cleverly praised the scheme for enabling “many thousands” to achieve homeownership.
“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 IFS.
Government Response
A spokesperson for the Department of Housing, Communities and Local Government acknowledged that the scheme was introduced and phased out by the prior administration. They emphasized that “an evaluation of the program is ongoing,” while noting the absence of immediate plans for a new iteration. Instead, the government highlighted a broader mortgage guarantee scheme as a tool to support young families and renters.
