Almost half of Help to Buy customers would not have been able to purchase a home without the scheme, according to a major government evaluation of the initiative.
The independent evaluation published by the Ministry of Housing, Communities and Local Government found 46% of customers said they could not have bought a suitable property without Help to Buy.
A further 81% said the scheme enabled them to buy sooner, highlighting the role it played in overcoming some of the affordability barriers facing first-time buyers.
However, the findings also raise questions over how future government support should be targeted, with 54% of customers indicating they could have bought a suitable property without Help to Buy.
MORTGAGE ACCESS
Help to Buy operated in England between 2013 and 2023, providing buyers of new-build homes with a government equity loan alongside their deposit and mortgage.
The evaluation found the scheme increased home ownership and enabled buyers to access mortgages that would otherwise have been beyond their reach.
It also allowed some households to buy larger or more expensive properties than they otherwise would have purchased, with 41% saying Help to Buy enabled them to buy a bigger home.
The researchers estimated 77% of customers were financially better off under Help to Buy compared with what would have happened without the scheme.
DIFFERENT MARKET
But the evaluation cautioned against assuming the same model would deliver identical results today.
The mortgage market has changed substantially since Help to Buy was introduced in 2013, with high loan-to-value mortgages now more widely available.
Researchers said current conditions also include higher interest rates and inflation, meaning the affordability challenges facing prospective homeowners are different.
They concluded that any future intervention should consider the ongoing affordability of home ownership rather than concentrating solely on helping borrowers make the initial purchase.
FUTURE SUPPORT
The evaluation nevertheless concluded that Help to Buy delivered “very high” value for money, estimating £25.1bn of net present social value.
Around 15% of new homes built in England during the decade in which the scheme operated were estimated to be attributable to Help to Buy.
There were drawbacks, including evidence the scheme contributed to higher property prices in some less affordable and supply-constrained markets.
The report concludes: “In 2013 the Help to Buy scheme stimulated demand for homes in a depressed market, boosting developer confidence and increasing housing supply.
“Today, inflation is higher, interest rates are higher and there are more 95% mortgages available.
“The overarching insight from the econometric analysis is that there was significant variation in the impact of Help to Buy, both geographically and over time.
“In designing any future such scheme, being explicit about who and which areas are intended to benefit from a scheme will help design similar schemes in the best way, especially if a future scheme aims to support particular groups or particular areas rather than just operating at the macro, national level.”
