Thus, 22% of Help to Buy 1 users and 38% of Help to Buy 2 users were “additional” homeowners who could not have purchased a home without the support.
However, qualitative survey data showed that 46% of customers said they would not have been able to buy a home without the scheme. The remaining 54% said they could have purchased a suitable property without it, but used the support to buy a larger or higher-quality property.
Despite this, the evaluation concluded that Help to Buy achieved its main objectives of increasing homeownership and boosting housing supply.
The report found the scheme increased access to mortgage finance and supported higher levels of first-time buyer mortgage sales in England.
Chris Lee, former director of the Help to Buy scheme and CEO of Own Homes, said bringing back the scheme would be a mistake.
Giving brokers the winning edge
Sponsored by Rely
He commented: “The challenge now is not simply helping people access a new-build home. We have a much wider group of aspiring homebuyers who can afford the ongoing cost of homeownership but are locked out because they cannot build a large-enough deposit while paying high rents.
“Any Help to Buy 2.0 needs to learn from what worked, but it also needs to be more flexible and designed around the barriers buyers face today – the deposit. Simply recreating the old model risks spending significant public money without fixing the parts of the housing ladder that are currently broken.”
Mortgage financing
Customers said the Help to Buy equity loan helped them secure lower monthly repayments and more favourable mortgage rates, particularly under Help to Buy 1 when interest rates were lower.
However, some borrowers reported having fewer lender options because only certain banks would lend on Help to Buy properties.
Some 94% of customers paying interest said they were up to date with repayments, and administrative data showed the figure was slightly lower at 91%, suggesting some borrowers may not have realised they were in arrears.
Uneven impact on homeownership
While the scheme increased first-time buyer activity overall, its effect on homeownership varied across England.
The evaluation found little evidence of an increase in homeownership in areas that were already relatively unaffordable before Help to Buy was introduced.
Lenders and developers told researchers it was common for buyers to use Help to Buy to purchase bigger homes than they otherwise could have afforded, effectively “skipping a rung” on the housing ladder.
Regional differences were particularly pronounced. In London, only 31% of Help to Buy 1 customers could have afforded an average local first-time buyer property without the scheme.
Customer satisfaction mixed
More than seven in 10 customers said they were satisfied or very satisfied with their experience of Help to Buy, while 17% reported being dissatisfied.
The most common complaints related to customer service and the process of repaying the equity loan, which many respondents described as complex and stressful.
Customers also said Help to Buy helped them access more favourable mortgage terms, including lower monthly repayments and lower interest rates. Some borrowers reported having fewer lender options because not all banks offered Help to Buy mortgages, but still considered the scheme their most affordable route into homeownership.
The evaluation found that 77% of customers were financially better off as a result of purchasing through Help to Buy, while 23% were worse off.
However, 17% of respondents said their overall financial position had deteriorated after using the scheme. This figure rose among lower-income households, families with children and borrowers who had fallen into arrears on interest payments.
Overall, the review concluded that Help to Buy successfully increased housing supply and supported homeownership, but that many buyers could have purchased without it and the scheme’s benefits varied significantly depending on local affordability conditions.
House prices rose in less affordable areas
The evaluation found evidence that Help to Buy contributed to higher house prices, particularly in locations that were already relatively expensive.
Average new-build prices increased most sharply in neighbourhoods where first-time buyers faced the largest deposit requirements. In these areas, prices rose more than twice as much by the final year of the scheme as they did in more affordable areas.
The report also identified a modest “Help to Buy premium”, estimating that homes purchased through the scheme cost around 1% more on average than comparable new-build properties in the same area.
Housing supply reverted to pre-crisis levels
The evaluation said the scheme increased confidence among developers and contributed to a widespread recovery in new housing development.
Econometric analysis showed that around 15% of all new-build homes constructed in England between 2013 and 2023 were attributable to Help to Buy.
However, the report noted that much of this increase represented a recovery in housing delivery back towards pre-financial crisis levels.
Researchers found little evidence that changes made to the scheme in 2021, or its eventual closure in England in 2023, had a substantial impact on housing supply. They suggested this reflected improved developer confidence and a mortgage market offering more high-loan-to-value (LTV) products outside the scheme.
Closure linked to drop in first-time buyer sales
Although the end of Help to Buy had little effect on housing supply, the evaluation found some evidence that its closure reduced first-time buyer mortgage sales in England.
Researchers said this suggested the scheme was still supporting some households into homeownership, particularly as higher interest rates created additional affordability pressures.
