The National Audit Office today released a report on the Government's Help to Buy scheme, which aimed to help more people get on to the property ladder. Dr Jack Copley, an Early Career Fellow in the Institute of Advanced Study at the University of Warwick who researches global finance and the economy, discusses its conclusion that most of those who used the scheme could have bought a home without it.

He says: “In terms of helping those who are in most desperate need of housing, this report suggests that Help to Buy was a failure. However, resolving the housing crisis wasn’t the policy’s chief aim.

“It was introduced in the aftermath of the 2008 Global Financial Crisis, during which mortgage lending fell and house prices were barely rising. This presented a big problem for the British economy and government, because Britain’s economic model has been reliant on rising house prices since the 1990s. For homeowners, rising house prices increased their wealth, in a context of wage stagnation, allowing them to spend more money and therefore boost demand in the economy. London’s booming property market also attracted investment from abroad, which helped to offset Britain’s trade deficit with the rest of the world. Yet rising house prices have also made it harder for middle and lower income earners to access homes, especially given the lack of social housing.

“So the house price bubble is double-sided: it has helped to boost the British economy, but it also represents a crisis for a big part of the British population. Help to Buy was an attempt to kickstart house price growth and therefore keep this economic model alive.”

For more information contact:

Peter Thorley
Media Relations Manager (Warwick Medical School and Department of Physics)

Email: peter.thorley@warwick.ac.uk

Tel: +44 (0)24 761 50868

Mob: +44 (0) 7824 540863