Summary
A government loan program called Help to Buy, started in England in 2013, mostly helped people with higher incomes buy homes in cheaper areas. A report from the Institute for Fiscal Studies (IFS) found the program had little effect on making homes more affordable or improving social mobility.
Key Facts
- Help to Buy was created to help first-time buyers get loans for home deposits and increase mortgage access.
- The program included a mortgage guarantee (helping with 5% deposit mortgages) and an equity loan giving 20% government-backed loans for new homes.
- By 2014–15, about 20% of first-time buyers in England used Help to Buy.
- The program mainly benefited higher-income buyers in areas with less expensive homes.
- Help to Buy had limited impact on housing affordability because it only applied to new build homes, which are rare in many areas.
- The equity loan part of Help to Buy closed to new applicants in England, Scotland, and soon in Wales; the mortgage guarantee scheme is now permanent across the UK.
- Critics say Help to Buy pushed up house prices, while supporters credit it with increasing home construction and helping people buy homes.
- The government is not currently planning to reintroduce Help to Buy but maintains a mortgage guarantee scheme.
