Don’t be fooled: reviving the Help to Buy scheme won’t make housing more affordable in 2026

A review of Help to Buy, released on 15 September, found that the scheme increased access to home ownership, boosted housing supply, and provided significant value for money. Developers are already using the findings to call for a new scheme, but ministers should resist drawing the wrong lessons. 

Help to Buy was a government scheme that gave eligible buyers a low-interest loan which covered part of the value of their home. The loans were paid to the housebuilder via the buyer on completion of the house sale. When the home was later sold, the loan was paid back to government in such a way that accounted for an increase in the value of the home, meaning government benefited from an increase in value.  

There are several reasons why this worked particularly well in 2013. For housing developers, it stimulated demand for new-build properties. Of the buyers who used Help to Buy, the evaluation found that 46% would not have been able to buy a home without the scheme, although this means that over half would have bought a home anyway. Government benefitted from the loans sitting ‘off-balance sheet’ and low interest rates. 

The housing market today is very different from 2013. Help to Buy was introduced against a backdrop of ultra-low interest rates and a weak construction sector in the wake of the 2008 financial crisis. Today, interest rates are higher and likely to stay high, and, unlike the previous iteration, any government lending will be ‘on-balance sheet’. If interest rates were low, this would be less of an issue, but today, stubbornly high interest rates means that covering the difference becomes increasingly expensive for government, making it harder for government to keep within the fiscal rules without making changes to taxes or other spending. In addition, under the original scheme government returns were guaranteed by a strong growth in house prices, which is less guaranteed now.  

While demand and a faltering construction sector is a problem today, as it was in 2013, the bigger issue is affordability. Supply of new homes is key, but the evaluation found that Help to Buy did push up house prices. Subsidising buyers risks boosting purchasing power without fixing the shortage of genuinely affordable homes. Under the current fiscal constraints, government faces a clear spending choice. If there are billions to put into housing, government should ask whether that money would deliver more by building social and council homes, rather than subsidising private purchases. 

Read more:

• Andy Burnham’s council house revolution only works if we build homes fit to withstand the heat
• When it comes to Britain’s housing, we need to value the homes we have as much as the ones we build
• Council spending on housing homeless families in England at almost £3bn a year: ‘It’s crippling’

The review highlighted the high value for money of Help to Buy, with the report suggesting that “the scheme is estimated to have generated a net present social value of £25.1 billion”. This value for money is driven by land value uplift, which is the difference in value of residential land compared to agricultural or brownfield land, driven by house price growth. Under the current economic context, it is not sensible to assume the uninhibited house price growth in the years following 2013, and it’s also worth noting that increasing house prices is in opposition to government commitments on affordability. Investment in social and council housing also has high returns on investment, but without compromising affordability. Supporting people into social housing has an immediate impact on the welfare bill, not to mention the wider benefits that investing in social housing delivers.  

The lesson is to design policy for today’s housing crisis, not revive a scheme built for the aftermath of the financial crash. The prime minister has been explicit about wanting to boost council housing numbers, and the Treasury will have to answer valid questions about whether spending on a Help-to-Buy initiative to boost first-time buyers could be better spent boosting social housing numbers. Rather than stimulating demand among a group of buyers, over half of which are likely to be able to buy regardless, government should ensure any investment is directed towards those at the sharpest end of the housing crisis.  

Maya Singer Hobbs is a senior research fellow at IPPR

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