Help to Buy mostly helped high earners, IFS says

Influential think tank finds flagship government scheme disproportionately benefited higher earners, raising questions about its effectiveness for first-time buyers. | Contesto: cronaca

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• Help to Buy mostly helped high earners, IFS says

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The Institute for Fiscal Studies (IFS) has concluded that the government's flagship Help to Buy scheme primarily assisted individuals with higher incomes, while providing significantly less benefit to those on lower earnings. The influential economic think tank's analysis, published today, directly challenges the program's stated aim of helping first-time buyers onto the property ladder, revealing a stark disparity in who ultimately gained from the equity loan initiative. Launched in 2013, Help to Buy was designed to stimulate the housing market and assist prospective homeowners who could afford mortgage repayments but struggled to save for a large deposit. The scheme allowed buyers to purchase a new-build property with a 5% deposit, supported by a government equity loan of up to 20% of the property's value. However, the IFS report indicates that the financial structure and the pricing of new-build homes meant the program's advantages were disproportionately captured by households with greater financial resources. The core of the criticism lies in the distribution of the scheme's substantial financial subsidy. The IFS analysis suggests that the effective 'discount' provided by the equity loan—which is interest-free for the first five years—was of greater relative value to those purchasing more expensive homes within the scheme's price caps. Furthermore, the requirement for a new-build property often meant buyers faced a premium compared to existing homes, a cost that lower-income households were less equipped to absorb, even with the government loan. Consequently, the average income of Help to Buy participants was substantially above that of the typical first-time buyer outside the scheme. This outcome has significant implications for housing policy and public spending. Critics argue that billions of pounds in taxpayer-backed support have effectively inflated the profits of developers and boosted the assets of already relatively affluent households, rather than fundamentally addressing the deposit barrier for the most stretched prospective buyers. The findings also raise concerns about the scheme's impact on housing market dynamics, potentially contributing to...

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Categoria: cronaca