Higher-income households received the greatest benefit from the Help to Buy mortgage schemes introduced in 2013, according to research published by the Institute for Fiscal Studies (IFS).
The analysis found that the government-backed programmes, launched by the Conservative-Liberal Democrat coalition under then-Chancellor George Osborne, had limited impact on social mobility and primarily assisted buyers who would have eventually purchased property without intervention.
Scheme structure and uptake
Help to Buy comprised two separate schemes designed to facilitate home ownership during a period of accelerating house price growth. The first offered taxpayer-backed loans to reduce deposit requirements, whilst the second provided a mortgage guarantee scheme covering portions of lenders’ potential losses on high loan-to-value mortgages.
Both schemes applied to properties valued up to £600,000. By 2014-15, they supported approximately 20% of first-time buyer purchases in England.
Income distribution of benefits
Using survey data and local property prices, the IFS determined that higher earners living outside London and south-east England, where property prices were lower, benefited most from the schemes.
Bee Boileau, research economist at the IFS and co-author of the briefing, said: “Help to Buy policies can help first-time buyers get on the housing ladder, in theory, but can also push up house prices and require the government to assume the risk on loans that the private sector is not otherwise willing to make.”
The report noted that higher-income households “would normally be expected to be able to save for a minimum deposit quite quickly even without Help to Buy”, suggesting the schemes “accelerated their first home purchase by a few years rather than making the difference between becoming a homeowner or not in the longer term”.
Scheme effectiveness analysis
The mortgage guarantee scheme showed “limited effects on affordability”, as buyers remained constrained by maximum income multiples for borrowing. The loan scheme proved “more important for almost all households” in improving local property affordability, though its restriction to new-build properties left it “muted in effect”, according to the IFS.
The findings align with broader concerns about government housing initiatives. Similar to recent changes affecting the rental sector, policy interventions in the housing market continue to generate debate about their effectiveness and beneficiaries.
A 2022 House of Lords built environment committee report concluded that funds allocated to Help to Buy “would be better spent on increasing housing supply”. Critics argued the schemes inflated prices without addressing underlying supply constraints.
Current policy status
A version of the mortgage guarantee scheme was reintroduced in 2021 and made permanent by the Labour government in 2024, aimed at maintaining availability of 95% mortgages.
Former Conservative housing secretary James Cleverly defended the programmes, stating they “gave many thousands of people the chance to realise the dream of homeownership”, whilst criticising current housing policy under Labour.
The IFS noted that future governments seeking to address inequality through housing schemes could target lower-income households, though this approach would require taxpayers to assume greater financial risk. The research suggests that whilst property market dynamics vary across regions, government intervention schemes require careful targeting to achieve stated social mobility objectives.
