Help to Buy was launched in 2013 by the Conservative-Lib Dem coalition government and involved two separate schemes: taxpayer-backed loans to reduce deposits and a mortgage guarantee scheme covering part of lenders' potential losses. Both schemes applied to homes worth up to £600,000.
The previous Help to Buy equity loan scheme ran from 2013 to 2023, offering loans for new-build house purchases of up to 20% of the sale value. Over its 10-year duration, the scheme handed out 390,000 loans totaling £25 billion.
A second Help to Buy mortgage guarantee scheme initially ran from 2013 to 2016, offering 105,000 mortgage guarantees totaling £15.8 billion. A version of this mortgage guarantee scheme was reintroduced in 2021 and made permanent by Labour last year.
By 2014-15, Help to Buy supported about a fifth of first-time buyer purchases, indicating significant market penetration during its early years.
The Institute for Fiscal Studies has said the previous Help to Buy schemes had a limited impact on social mobility. The IFS suggests much of the benefit of Help to Buy went to higher earners who would eventually have been able to buy a home anyway. The IFS claims the Help to Buy equity loan scheme had the biggest impact on high earners living in affluent areas.
The IFS analysis suggests the Help to Buy mortgage guarantee scheme had limited effects on affordability because buyers were still constrained by income multiples. The two Help to Buy schemes were most beneficial to people living in London and the South East and those among higher income percentiles. The IFS suggests the Help to Buy schemes accelerated first home purchases by a few years for higher-income households rather than making the difference between becoming a homeowner or not in the longer term.
The government is reportedly considering revising Help to Buy. Leading housebuilders are calling for a new equity loan scheme to revive demand for homes and boost the construction industry. Housebuilders say Brits face a first-time buying affordability crisis and claim extra government support would stimulate demand while helping people onto the property ladder.
A report by the House of Lords built environment committee in 2022 suggested that money spent on Help to Buy would be better spent on increasing housing supply.