IFS: Help to Buy helped higher earners most in England

If you grew up hearing about Help to Buy, you’re not alone. A fresh analysis from the Institute for Fiscal Studies, published today (15 April 2026), finds the policy mostly benefited higher earners and made only a modest difference to overall affordability for first-time buyers. We’ll explain what that means in plain English and how today’s mortgage guarantee fits in. (ifs.org.uk)

Quick refresher so we’re on the same page. In 2013 there were two linked policies in England: a mortgage guarantee that encouraged lenders to offer 95% mortgages (so you could buy with a 5% deposit), and an equity loan for new-builds where government lent up to 20% of the price (40% in London for later years). Same brand, different mechanics. (ifs.org.uk)

At its peak in 2014–15, about one in five first-time buyer purchases in England used Help to Buy. That reach didn’t automatically translate into cheaper homes overall, the IFS says, because the gains for some buyers were offset by price pressures for others competing in the same market. In short: who benefited depended on income and local supply of new-builds. (ifs.org.uk)

Here’s the key learning point for students and first-time buyers: most people in the early 2010s were limited by how much they could borrow relative to their income, not by the size of their deposit. If a lender caps you at roughly 4.5 times your income, a 5% deposit option doesn’t raise that cap. That’s why the mortgage guarantee moved the dial less than many expected. (ifs.org.uk)

The equity loan helped more-but not for everyone. Because it reduced the main mortgage to 75% of the price, it eased those income limits a bit. Yet it only applied to new-builds, and new-builds weren’t common in many areas. Result: the biggest gains landed with higher earners and in places where prices were lower and qualifying new-builds were available. (ifs.org.uk)

On social mobility, the IFS is careful. It finds no strong evidence that Help to Buy boosted mobility: outcomes were driven more by your own income and where you lived than by parental background. That’s a useful reminder for citizenship classes-policy design matters, and so do local housing markets. (ifs.org.uk)

Supporters make a different case. The Home Builders Federation argues Help to Buy underpinned a rapid doubling of housing supply in the mid‑2010s and helped hundreds of thousands purchase new homes. That supply‑side story is part of why the policy remains politically important in housing debates. (committees.parliament.uk)

Where things stand now matters if you’re house‑hunting in 2026. The Help to Buy equity loan is closed to new applicants in England (applications ended on 31 October 2022), and Scotland’s scheme has also closed. Wales continues its shared‑equity version until September 2026. Northern Ireland never ran an equity‑loan Help to Buy; its main route is shared ownership via Co‑Ownership. (gov.uk)

What has replaced it across the UK is not a cash loan to you but a permanent Mortgage Guarantee Scheme, launched in July 2025. It helps lenders keep offering 91–95% loan‑to‑value mortgages by providing a government guarantee on part of their potential losses, and it applies UK‑wide. It can get you on the ladder with a 5% deposit, but it won’t change your income assessment. (gov.uk)

What this means for you if you’re saving: ask two questions. First, am I income‑constrained? If so, a 95% mortgage option may not raise the maximum I can borrow. Second, am I comfortable with the higher monthly costs that usually come with small‑deposit loans? The IFS’s worked example shows why: even with a 5% deposit on a £200,000 home, the income cap may still block you if your earnings don’t stretch far enough. (ifs.org.uk)

For classrooms and open evenings, here’s the takeaway we can teach together. Help to Buy changed who could buy, more than it changed what homes cost overall. Today’s permanent mortgage guarantee keeps a low‑deposit route open, but affordability still hinges on incomes and the homes actually for sale in your area. That’s the civic lesson: programmes need supply to match demand. (ifs.org.uk)