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The Help to Buy equity loan scheme has netted the Government £1.74 billion, new data shows - though falling flat prices are likely to stunt returns in the future.

As of March this year, it has made a £1.24billion profit on loan repayments from the 214,000 people that have repaid their loans, thanks to house price increases.

It has also made £500million in interest payments on the loans, according to the annual report of Homes England, which manages repayments.

The Help to Buy equity loan scheme was introduced in 2013 to help people get on the property ladder and closed to new applications in 2023.

The Government would provide a loan comprising up to 20 per cent of a home's value, or 40 per cent in London, and the buyer would put in 5 per cent. The most they could borrow was £120,000 or £240,000 in London.

But when home buyers repaid, they would owe the Government 20 or 40 per cent of its value at that time, not the amount they initially borrowed.

If house prices increased, which they generally did, the Government would make a profit.

Help to Buy: The equity loan scheme helped buyers on to the property ladder in new-build homes such as these flats in London - as well as making a profit for the Treasury

The loans were interest-free for the first five years. After that, buyers could pay interest or remortgage to buy out the Government, but the loan had to be repaid if they sold the home.

The scheme was limited to first-time buyers only in 2021 and closed to new applicants in March 2023.

As of March, there were around 173,000 equity loans that hadn't been repaid.

Falling flat prices will hit Government gains

While Help to Buy provided a stepping stone into home ownership, it has been criticised for inflating house prices.

Because developers knew that many buyers could get a 20 per cent loan or more from the Government, it has been claimed that some raised their prices meaning that buyers overpaid for their homes.

As Help to Buy was restricted to new builds, some of those buyers could now be struggling to sell their homes due to the falling flat market and issues with leasehold apartments.

The typical flat flat fell in price by 5.3 per cent in the 12 months to March, from £199,186 to £188,643, Land Registry data shows.

And more recent statistics from PropertyData suggest the average flat owner sold for £39,509 less than what they had paid for their home in the past 12 months.

Homes England recognised this in its report, saying that 'The Help to Buy portfolio is particularly sensitive to market risk from changing house prices.'

It reported that its operating income totalled £672 million in 2025-26, a decrease of £184million or 21 per cent on the previous year.

It said there had been 'A £438million decrease in net fair value gains on financial assets measured at fair value through profit or loss'.

This was 'predominantly' driven by a reduction in the estimated value of properties on the Help to Buy equity loan books, it said.

It noted the fall of flat prices in London as a 'source of additional market risk'.

Homes England also recognised that, if house prices fell, Help to Buy users may find it more difficult to redeem their loans.

Flat owners could be unable to remortgage if house price falls meant they found themselves in negative equity, or had less than 5 per cent equity, after repaying the Government loan.

This could result in a higher income from interest for Homes England, as they would be forced to stick with the Help to Buy loan - but this would not match income from loan redemptions.

Will there be a new Help to Buy?

Despite its shortcomings, some property experts have called for a new version of Help to Buy to assist those buying their first home.

Housing Minister Matthew Pennycook has faced calls to revive the scheme and there have reportedly been 'discussions' on the topic in his department, but there are no firm plans under way.

Riz Malik, independent financial adviser at R3 Wealth, said this could provide a boost to the ailing property market.

He said: 'In the absence of a credible alternative, Help to Buy needs to be reinstated as soon as possible. Developers made money, but it appears the Government did as well.

'Given the state of the UK housing market at present, in the absence of any sizeable rate cuts, it can help provide some impetus to the market.'

Jamie Alexander, mortgage director at Alexander Southwell Mortgages, said a new version of Help to Buy could be expanded to include non-new homes.

He said: 'There is plenty of evidence it inflated new build prices, and the buyer carried the cost of that. If it comes back it needs to work differently.

'Opening it up to include second hand homes would spread demand more evenly, take some heat out of new build pricing, and give buyers a wider choice. The principle of a government equity loan is sound.'

A report earlier this year by think thank the Institute of Fiscal Studies said Help to Buy had a 'limited impact' on social mobility and mostly helped better-off buyers.