A government audit of the help-to-buy programme has calculated it provided £25bn of social value to the UK in the last financial year, according to an official review, despite previous criticisms that the scheme inflated house prices and was overly expensive.
The findings come as debate continues within government over whether Labour should introduce its own version of the scheme to support first-time buyers, particularly as local housing market conditions vary significantly across regions.
Scheme performance and reach
The report found that more than 387,000 people bought their own home through the programme, with over 328,000 being first-time buyers. Nearly half of customers said they could not have bought a home without the scheme’s support.
According to the review, the help-to-buy scheme “supported expanded home ownership, particularly in already affordable areas” and “delivered its core aim of supporting home ownership.” The report noted that for some buyers, it enabled earlier entry to the housing ladder, whilst for others it facilitated purchasing larger or more expensive properties.
Political considerations
Sources indicate that housing minister Matthew Pennycook and former housing secretary Steve Reed advocated for creating a new version of the scheme, but were overridden by chancellor Rachel Reeves, who prioritised boosting housing supply instead.
The original scheme was introduced by George Osborne in 2013, offering taxpayer-backed loans to reduce deposit requirements. A second version launched later that year covered part of lender losses on high loan-to-value mortgages. Both applied to homes worth up to £600,000 and by 2014-15 supported approximately one-fifth of first-time buyer purchases.
Criticisms and alternatives
Earlier this year, the Institute for Fiscal Studies found much of the benefit went to higher earners who would eventually have been able to buy a home anyway, particularly those outside London and south-east England. The scheme has also faced criticism for contributing to rising house prices, though the latest review did not assess this impact.
The Home Builders Federation has proposed a programme whereby developers would pay a fee to allow first-time buyers to purchase properties with a government-backed 20% equity loan. Reed is understood to have discussed such structures with housebuilders before leaving office, particularly focusing on buyers in areas where market conditions have recently cooled.
A government spokesperson said: “There are no current plans to introduce a new help-to-buy scheme. But it’s important to learn what went well and what went wrong with the previous scheme, which is why we undertook a robust evaluation, as is normal for all major programmes.”
Current housing policy
The government has prioritised new housebuilding, with Prime Minister Keir Starmer pledging to oversee 1.5m new homes during this parliament, though housing secretary Angela Rayner acknowledged this weekend that target would prove difficult to meet. Ministers have focused on stimulating supply, pledging £39bn for new social and affordable homes and undertaking planning reform to encourage development.
The review’s findings are likely to inform future policy decisions as the government balances demand-side support for buyers against supply-side measures to increase housing stock.
