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IFS Report: Help to Buy's Limited Affordability Impact
15 Apr
Summary
- Help to Buy focused on new builds, limiting broader affordability.
- Higher-income buyers benefited most from the scheme.
- Equity loan schemes have closed to new applicants in England and Scotland.
The UK's Help to Buy scheme, introduced in 2013, has been subject to scrutiny, with a recent IFS report highlighting its limited impact on housing affordability. The scheme, which included a mortgage guarantee and an equity loan for new builds, primarily aided those who could already afford higher prices, thus not achieving its goal of making homes accessible for many.
While the equity loan aspect is now closed to new applicants in England and Scotland, and will close in Wales in September, the mortgage guarantee scheme continues nationwide. The IFS research suggests that the restriction to new builds, which are less common in many areas, hampered the scheme's effectiveness. The report's findings echo previous criticisms from government watchdogs regarding the policy's unintended consequences.
