Help to Buy mostly helped higher earners, IFS finds

What the IFS found

Help to Buy made “only a limited difference” to housing affordability and mostly helped higher earners buying in cheaper areas, according to a new report from the Institute for Fiscal Studies. At its 2014-15 peak, the scheme was behind around one in five first-time buyer purchases in England.

The equity loan arm ran from 2013 to 2023 and issued roughly 390,000 loans worth about £25bn in total, lending buyers up to 20% of a new-build’s value (40% in London) to cut the amount they had to borrow themselves.

Why it mostly helped higher earners

The catch was in the design. Help to Buy relaxed the deposit you needed but not the income limits lenders apply — and for most people who don’t already own, income is the binding constraint. So the scheme “increased maximum affordable prices most among those who could already afford higher prices”, and the IFS found it seemed “neither to have entrenched inequalities… nor to have boosted social mobility”.

It had defenders. The Home Builders Federation called it “a major factor in the doubling of housing supply” in the years after launch, and former housing secretary James Cleverly said it “gave many thousands of people the chance to realise the dream of homeownership”.

What first-time buyers can use now

The equity loan is closed to new applicants, but three routes remain — and which one fits depends on your numbers.