UK housing policy deepened inequality: IFS reveals Help to Buy's regressive wealth transfer to affluent households
Original framing: “Higher-income households benefited most from Help to Buy, thinktank finds” — The Guardian - World
Empirical studies on mortgage subsidies consistently show that demand-side interventions without supply-side reforms primarily inflate asset prices rather than increase access, as demonstrated by research from the Bank of England and IMF. The IFS's own data reveals that Help to Buy's impact on social mobility was statistically negligible, contradicting its stated objectives. Behavioral economics research further explains how middle-class households are more likely to exploit such schemes due to lower risk aversion and better access to financial advice.
The IFS analysis reveals how Help to Buy, far from being a failed social mobility tool, was a textbook example of neoliberal housing policy: a demand-side subsidy that inflated asset prices while entrenching wealth inequality.
This reflects a 40-year trend in which UK governments have prioritized financialization over affordability, from Thatcher's Right to Buy to Osborne's mortgage schemes, all while ignoring the structural causes of the housing crisis—restrictive planning laws, financial deregulation, and the commodification of land. The policy's beneficiaries were not just higher-income households but the financial sector itself, which securitized mortgages and extracted rents from state-backed schemes. Cross-culturally, alternatives like Singapore's public housing or Māori land trusts demonstrate that housing can be decoupled from speculative capital, yet these models are systematically excluded from UK policy discourse. The solution lies not in tweaking demand-side subsidies but in decommodifying housing through CLTs, rent controls, and land value taxation—policies that address the root causes of inequality while centering marginalized voices long erased from the housing debate.