The IFS’s research found that people in the early 2010s were constrained by income-based limits on mortgage lending, so the loaned deposit had a “limited effect” on housing affordability for scheme participants who often got help from friends and family at the last minute.
“Help to Buy policies can help first-time buyers get on the housing ladder, in theory, but can also push up house prices,” said Bee Boileau, a research economist at IFS.
The IFS also said the scheme was less helpful to buyers in London and the South East, where homes are pricier, because fewer homes were available within the scheme. As such, higher earners in cheaper areas benefitted most.
However, defenders of Help to Buy said it helped many people onto the housing ladder and led to more homes being built.
“The scheme was a major factor in the doubling of housing supply that occurred in the few years following its introduction, creating tens of thousands of jobs and leading to a boom in the supply of affordable housing provided through private sector cross-subsidy,” the Home Builders Federation said.
Shadow housing secretary James Cleverly said the Conservative policy “gave many thousands of people the chance to realise the dream of homeownership”.
A spokesperson for the Department of Housing, Communities and Local Government said Help to Buy was both introduced and closed by the previous government, and that “an evaluation of the scheme is ongoing”.
“While we have no current plans to introduce a new Help to Buy scheme, we have launched a comprehensive mortgage guarantee scheme that will open the door to homeownership for more young families and hardworking renters,” the spokesperson said.