26th April 2026
The Institute for Fiscal Studies (IFS) has examined the UK’s Help to Buy schemes—primarily the equity loan scheme (2013–2023) and the mortgage guarantee scheme (2013–2016; reintroduced 2021). Their analysis shows that while these schemes were designed to improve affordability for first‑time buyers and stimulate housebuilding, their actual impact was uneven, limited, and often regressive.
The IFS concludes that Help to Buy did not significantly expand access to homeownership for the majority of non‑owners, and that the benefits accrued disproportionately to higher‑income households and developers, rather than to those most constrained by the housing market.
Background and Policy Intent
Help to Buy was introduced to:
Reduce deposit requirements
Relax borrowing constraints
Support first‑time buyers
Stimulate new housing supply
The equity loan scheme provided government loans of up to 20% of a new‑build home’s value, while the mortgage guarantee scheme encouraged lenders to offer 95% mortgages by underwriting part of the risk.
The political narrative framed these schemes as tools to “unlock aspiration” and “help a generation onto the housing ladder”. The IFS analysis tests whether these aims were achieved.
Key IFS Findings
Income, not deposits, was the main barrier to homeownership
The IFS finds that most non‑homeowners in the early 2010s were constrained by insufficient income, not by the size of their deposit.
Because lenders typically cap loans at 4.5× income, many households could not borrow enough to purchase even a modest home.
This means:
The mortgage guarantee scheme, which only reduced deposit requirements, had minimal impact on affordability.
The equity loan scheme had more potential because it reduced both deposit and income constraints—but only for a narrow group.
The equity loan scheme mainly benefited higher‑income households
The equity loan scheme:
Reduced the size of the mortgage needed
Lowered the deposit required
Applied only to new‑build homes
However, the IFS shows that the households who benefited most were:
Already close to being able to buy
In higher income brackets
Living in areas with a large supply of new‑builds
In many cases, the scheme accelerated home purchases rather than enabling them for those who otherwise could not buy.
Geography mattered more than deposits
Affordability varied dramatically by:
Local house prices
Local incomes
The availability of new‑builds
Deposit size—often the focus of political messaging—was far less important than these structural factors.
Limited impact on inequality
The IFS finds that Help to Buy:
Did not significantly reduce inequalities between those with and without parental support
Did not materially change the share of homes affordable to most non‑owners
Delivered small overall gains in affordability
The schemes therefore did not achieve their broader social objectives.
Price effects likely undermined affordability
The IFS analysis assumes no price effects for modelling purposes, but explicitly warns that:
“If we included price effects, we would expect them to undermine overall affordability gains.”
This is a crucial insight.
By increasing demand in a supply‑constrained market, Help to Buy likely pushed up house prices, especially for new‑builds. This means:
Buyers using the scheme may have paid inflated prices
Non‑users faced higher barriers to entry
Developers captured a significant share of the subsidy through higher margins
Policy Implications
Help to Buy was poorly targeted
The schemes did not focus on those most constrained by the housing market.
Better targeting—based on income, geography, or need—could have improved outcomes.
Demand‑side subsidies without supply reform are counterproductive
The IFS findings reinforce a long‑standing policy lesson:
Boosting demand without boosting supply raises prices.
Future interventions should prioritise supply, not subsidies
Options include:
Planning reform
Incentives for local authorities to build
Support for affordable and social housing
Measures to increase land availability
If demand‑side support is used, it must be tightly designed
Possible improvements:
Income‑tested support
Caps linked to local market conditions
Restrictions to prevent price inflation
Time‑limited interventions tied to supply expansion
Overall
The IFS analysis shows that Help to Buy delivered limited and uneven benefits, with the greatest gains going to higher‑income households and developers.
The schemes did little to address the structural drivers of unaffordability—low supply, high prices, and income constraints—and may have worsened affordability for those not using them.
Future policy must shift from subsidising demand to expanding supply and targeting support where it is most needed.
Short Op‑Ed: Arguments For and Against Help to Buy
In Favour
Supporters argue that Help to Buy:
Enabled hundreds of thousands of people to purchase homes earlier than they otherwise could
Supported the construction sector during periods of economic uncertainty
Increased the supply of new‑build homes
Reduced deposit barriers for first‑time buyers
Provided a politically popular route to homeownership
For many households, especially young professionals, the scheme offered a practical and immediate path onto the housing ladder.
Against
Critics argue that Help to Buy:
Inflated house prices, especially for new‑builds
Boosted developer profits more than buyer welfare
Failed to help those most locked out of homeownership
Increased demand without addressing supply constraints
Entrenched regional inequalities
Represented poor value for money
From this perspective, Help to Buy was a demand‑side subsidy that treated the symptoms, not the causes, of the UK’s housing crisis.
Read the full IFS analysis HERE
A Pdf of the report is also available - Pdf 48 Pages.